Senate Foreign Affairs, Defence and Trade Legislation Committee, , 1:29:37 to 1:38:04
Discussion regarding the ADF health services contract, recovery of incorrect payments from Bupa, and the medical fitness of serving personnel.
Topics: Health, Procurement
Speakers: David Pocock, Natasha Fox, Meghan Quinn, Sonia Bennett, Unknown Speaker, Mark Hammond, Raff Ciccone
All right. Uh Senator PCO I'll come to you. I know you've got to committee so I'll come.
>> Thank you very much chair. Thanks for your time this morning. I've got some questions about defense's contract with
>> u ber the health provider.
>> Yes.
I'll just get a witness that may be able to answer.
>> Who's the official coming up to the
>> Uh, we'll have Chief of Personnel, Lieutenant General Fox, and the Surgeon General of the Australian Defense Force.
thank you. I I understand the defense has awarded uh following an open tender process the next ADF health services contract beyond June 27 to existing provider BER. Is that is that correct?
>> Uh, Senator General Fox, Lieutenant General Fox, Chief of Personnel. Uh we are currently in an open tender process and are currently in negotiations uh with a preferred provider. So it's not yet been awarded. The operative date for that contract will be 1st of July 2027 or end of June 2027.
>> Okay. Um on the current contract, has defense now recovered the full 7.12 million in incorrectly paid performance
>> uh Senator Rear Admiral Sonia Bennett, Surgeon General uh of the Australian Defense Force. Um I can confirm that there are range of recovery payments under the contract that have occurred over the last few years. The 7.9 million was one. Uh, I would just need some time to to see there's still also a num a couple of outstanding recovery payments underway. So, I could take that on notice and confirm to you what has been recovered and and what has not yet?
>> Okay, that would that would be good. Um, and so you think there still could be payments that need to be recovered?
>> Uh, a small amount, Senator. So the the vast majority uh of payments for recovery have occurred over the last 12
>> and in going
>> to a to to an amount that is beyond the 7.9 million. So from memory uh I'm thinking approximately 40 million
>> 40 million needed to be recovered. And in going through this um tender process, what waiting is being given to um the incumbent booper's performance part of the tender evaluation um
>> uh Senator because we are still in negotiations uh and we are not yet confirmed outcomes of those negotiations. They're actually currently underway as I speak. Um, uh, I could take that on notice.
>> Okay. Uh, but more generally, do you take into account performance when you're going through a uh, contracting process? Um, things like ADF member satisfaction, uh, outcomes, complaints, all those sorts of things.
>> Yes, senator. that we take into account past performance of contracts uh or contractors in relation to a raft of measures to assess uh suitability for future contracts.
>> Do you do you look at um the broader corporate and regulatory record of of companies or is that beyond the scope of
what defense looks at? We uh look at those um measures in terms of uh their relevant company and their performance and their financial viability as examples. And I could talk to I could bring the uh commercial um relevant expert to the table who assists us in those negotiations and what we look at.
But uh so senator we we do operate under the commonwalth procurement rules which do require us to look at
>> very loosely
>> uh we do we do comply with the procurement rules um and we are audited on that as part of NAO's audit program and take seriously our obligations under those the frameworks uh the government provide through the department of finance. uh in those procurement uh rule framework rules there is a requirement for us to look at the fit and proper activities the governance uh the legal veracity anything to do with regulatory procedures etc and so that is taken into account in all our contract and procurement processes
>> um so um in terms of the common procurement rules um what is uh defense's definition of an Australian company
>> so we we we comply ly with the updated uh definition of an Australian company. So the procurement rules were changed uh I can't remember the exact timing certainly in the last 12 months to redefine to to provide a definition for an Australian company to expand it beyond uh just a business number uh location uh and so we comply uh with that change in the procurement rules um from the time in which it was included.
Why is it then at at previous estimates when asking about procurement, I've been told by defense that a sovereign Australian company is any company that sells anything to any of our allies. >> That's very different to the the CPRs.
>> So I I can't I'd have to look at the specific question that you uh put previously. um the there has been a change in the procurement arrangements for us in terms of procurement within Australia and the Australian change that was largely so that we uh the government can track across government spending what's going to Australian companies because an ABN uh is is one aspect but it's not the full captured aspect of it.
>> Thank you. But but so defense does comply with the Commonwealth Procurement
Rules. Yes, we're required to under the PGPA act obligations and that is the expectation of all officers undertaking
I've been told that under the the current uh contract with uh ber there are a high percentage of units not for example, one battalion in the NT had some 35% of ADF on on some form of medical restriction. Um, perhaps on notice, can you provide a summary of how many serving personnel are medically unfit or on some form of medical restriction that would impact uh
>> Uh, Senator, um, I can answer that now. Uh in fact we have over 75% of the ADF are actually in a deployable um uh medical or military employment classification. We have some that are temporarily downgraded and those temporarily downgraded um in a military employment classification might be for an injury that has an ongoing rehabilitation requirement but it's only a temporary downgrade. So over 75% are in um military employable capability or classifications.
>> What's the breakdown of the other 25%.
>> Uh the there's over just over 13% temporarily um uh in a military employment classification which is uh classification three and then classification four uh for around just over one four% and we have a number of people who are on a transition pathway. Um, and that's uh just over 1%.
>> Thank you. Um, how am I gonna time more?
>> Okay, it's about right.