Secret emails reveal how Transfield got Nauru contract

Emails obtained by Crikey show Immigration was so keen for Transfield to be given the contract to manage the Nauru offshore immigration detention centre back in 2012 that the department handed Transfield the proposal it had sent to rival company Serco.

In September, the Australian National Audit Office delivered a scathing report of the department’s handling of the contracts dating back to 2012, when the then-Labor government decided to reopen offshore detention centres to hold asylum seekers attempting to reach Australia by boat.

One particularly strange decision highlighted was Immigration setting aside a proposal from Serco for running garrison services on Nauru, and instead going with Transfield, which didn’t provide a proposal specifying the services to be delivered and a price (it ended up costing $351 million between 2012 and 2014 when Transfield actually tendered for the next contract). It all seemed to stem from an unsolicited email Transfield — now known as Broadspectrum — sent checking in on the whole process.

Crikey requested the original email sent by a Transfield employee to then-department secretary Martin Bowles and all replies and references to that email, but we received only the original email and one response.

The first email — sent from an unnamed employee because Broadspectrum asked the department to redact the name from the released documents — shows how all the trouble kicked off for Immigration back in August 2012.

Bowles’ reply a week later on August 31 indicated that much of the discussion around how Transfield would get the lucrative contract was done verbally, and included the proposal the department had developed but shelved from Serco just days after it told Serco it would not be proceeding with its proposal. The paper indicates that any proposed cost for running the services on Manus or Nauru would not be fixed — i.e. Transfield would not be penalised for cost overruns.

The department responded to ANAO’s concerns on breaking procurement rules stating that at the time of the reopening of Manus and Nauru it was operating in an environment that was “high-tempo, at the peak of national interest, and complicated through logistics and uncertainties involved in processing in foreign countries”, forcing the department to develop procurement policies that were “sufficiently agile” to cope with the demand.