Team Employment & Training Network Pty Ltd v Secretary Department of Employment Workplace Relations & Small Business

REASONS FOR JUDGMENT 1 The applicant is a provider of employment related services including training. 2 In July 1999 the Department of Employment, Workplace Relations and Small Business ("the Department") issued Tendering Conditions, Application Requirements and a Draft Contract for the Employment Services Request for Tender 1999. The documentation, in section 1.1 of the General Information and Service Requirements for the Employment Service Request for Tender 1999, and in the draft contract Appendix 7, states that it is the Commonwealth of Australia which is the body calling for tenders and which will be the contracting party in respect of any contracts let in consequence of the tender process. The documentation and the draft contract state that the Commonwealth is "acting through and represented by" the Department. 3 The applicant lodged a tender dated 28 July 1999, receipt of which was acknowledged by the Department by letter dated 13 August 1999. 4 On 3 December 1999 the applicant was advised by the Department that its tender to provide intensive assistance in the Brisbane area was rejected as a non-conforming tender. The tender price submitted by the applicant was less than the minimum fee for the provision of intensive assistance at a level prescribed by the contract requirements. Compliance with the minimum bid provision was a requirement of section 1.7.2 of the conditions of tender. 5 On 15 December 1999 the applicant filed an application for an order for review. The respondents to the application are the Secretary of the Department, as first respondent, the Employment Services Regulatory Authority ("ESRA") as the second respondent, and the Commonwealth of Australia as third respondent. Significantly, the applicant sought relief against each respondent in the alternative. 6 The application states : "Application to review the decision of the First or Second or Third Respondent that : 1. There be included in the tender conditions for the Employment Services Request for Tender 1999 clause 1.7.2. 2. The tender by the applicant for the provision of Intensive Assistance Services pursuant to the Employment Services request for Tender 1999 was a non-conforming tender by reason of non-compliance with clause 1.7.2 of the Tendering Conditions. 3. Contracts for the provision of such Intensive Assistance Services be entered into for the regions of Brisbane and Moreton with persons other than the applicant. The applicant is aggrieved by the said decisions because: 4. The applicant's tender for the said Intensive Assistance services has been ruled a non-conforming tender. 5. The applicant has lost the opportunity to obtain contracts for the provision of such services. The grounds of the application are: 6. In respect of the decision referred to in paragraph 1 hereof, the decision was an improper exercise of power in that it required tenderers to undertake to contravene s.75AU of the Trade Practices Act 1974 in order to be regarded as a conforming tenderer. 7. In respect of the decisions referred to in paragraphs 2 and 3 - - (a) the decisions were improper exercises of power in that the tender by the applicant was ruled to be a non-conforming tender because the applicant did not undertake to contravene s.75AU of the Trade Practices Act 1974; or alternatively (b) the decisions involved an error of law in that the decision-maker wrongly construed the Conditions of Tender as obliging the applicant to calculate the minimum price level for the provision of Intensive Assistance Services by reference to a percentage figure nominated by the respondents as the percentage price increase which would result from the implementation of the Goods and Services Tax legislation. The applicant claims: (1) A declaration that clause 1.7.2 of the said Tendering Conditions is invalid. (2) An order that the applicant's tender for Intensive Assistance Services be treated as a conforming tender and considered in accordance with the Conditions of Tender." 7 On 15 December 1999 the applicant sought interlocutory relief as follows : "1. That until the trial of this action or earlier order, the respondents be restrained from entering into any contract for the provision of Intensive Assistance Services with tenderers other than the applicant pursuant to the Employment Services Request for Tender 1999 in respect of the regions for which the applicant tendered to provide Intensive Assistance Services, namely the Brisbane and Moreton regions. 2. Such further order as to the Court seems just. 3. That the costs of this application be costs in the proceedings." 8 The tender condition relating to bidding for intensive assistance was contained in section 1.10.7.5. It provided : "You may bid to provide Intensive Assistance services to all eligible clients and/or a specific group or groups of clients (specialist bid). In bidding to provide Intensive Assistance services for all eligible clients or to submit a specialist bid, you must submit two unit prices per bid range: one for level A clients and one for level B clients (see appendix 3 of the Service Requirements book for details categories). You will need to state the number of job seekers you are able to help at each site at any point in time (this is your contracted capacity). Details of minimum prices for level A ($4,628) and for level B ($9,150) are specified in sections 4.6.3 and 4.6.4 of the Service Requirements book." 9 The tender conditions in section 1.10.7.8 dealt with price components. It stated in part : "At the time of the release of this RFT, the New Tax System Bills are still before Parliament. It is intended that the New Tax System legislation will come into effect quite early in the second Employment Services contract period. Based on advice provided by the Treasury, tenderers need to build into their tender prices for all Job Network services the effects of the Government's tax reform measures - including the abolition of a range of indirect taxes and the introduction of a GST. You are strongly encouraged to seek professional advice on how the taxation reform package may affect your circumstances. The prices that you tender for all Job Network services should be inclusive of the GST. You will also need to show your calculation of the percentage impact of the Government's tax reforms on your prices. In calculating these prices, you may wish to consider the Government's modelling of the price effects of its tax reforms. The Government estimates that, on the assumption that cost and price effects are fully passed on, the price impact on the broader industry sector 'Other Business Services' - which includes employment services - is expected to be an increase of 6.4 per cent. It is therefore expected that tenderers will not simply seek to add the 10 per cent GST to their prices but rather will calculate the cost savings to their operations that will come about through the removal of embedded Wholesale Sales Tax and state-based taxes. ... ..... For the period of the contract until the Government's tax reforms are implemented you will be paid pre-GST prices. To calculate these pre-GST prices, DEWRSB will use your estimate of the percentage impact of the Government's tax reforms and apply that percentage to your tendered post-GST price. All fixed prices in this tender are expressed as post-GST prices. Appendix 6 provides a comparison of pre-GST and post-GST fixed prices. ..." 10 Appendix 6 stated : "The following table lists the fixed price payments to be provided to Job Network members under the terms of this tender. Pre-GST and post-GST prices are shown. Post-GST prices will come into effect on implementation of the proposed New Tax system legislation. The adjustments are based on Government modelling that estimates the price impact of the proposed tax reforms on the industry sector 'Other Business Services' - which includes employment services - to be an increase of 6.4 per cent. Reference in Service Payment Pre-GST price Post-GST price this RFT Service Requirements, section 4.6.4 Intensive Intensive Assistance minimum $3350 $3564 Assistance competitive price (up-front service $6600 $7022 fee and primary interim outcome payment): - Funding level A - Funding level B Service Intensive Intensive Assistance fixed final $1000 $1064 Requirements, Assistance outcome fee: $2000 $2128 Section 4.6.4 - Funding level A - Funding level B