There’s a saying, “If you pay peanuts, you’ll get monkeys”. Shoalhaven City Council would do well to remember that when awarding contracts and tenders.
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The sorry saga with Subloos, the company awarded the contract for waste removal – not to be confused with kerbside rubbish collection, which is done by Sita – began in 2010 when council signed it up for the task, taking over from Shoalhaven Recycling.
The very next year the Transport Workers Union was ringing alarm bells about the Far North Queensland company. In May 2011, it wrote to then Shoalhaven Mayor Paul Green, telling him the company had not being paying staff their superannuation entitlements and alleging it had serious occupational health and safety issues at the waste depots.
From the TWU’s perspective, the contract had been awarded on a lowest cost basis.
Almost five years later those initial concerns have come to an awful conclusion with Subloos going into administration and workers left without jobs and uncertain whether their entitlements will be paid.
The workers have told the Register they have been raising concerns with council about conditions and payment irregularities for the past four years. Council, in turn, claims it is unaware of any such complaints.
Worryingly, one councillor, Andrew Guile, has warned that the commercial failure of Subloos may be a result of poor council process awarding tenders, something he claimed has degenerated over time.
Cr Guile recalled asking many questions about the company which at the time he regarded as an “outlier” with a very low price. While not blaming council for the Subloos collapse, he has called for better diligence when awarding contracts.
Shoalhaven City Council is not the only local government caught up in the Subloos collapse. In Queensland, the Moreten Bay Regional Council was forced to dump Subloos and pay recycling staff out of its own coffers after a blockade was mounted on the company’s operation at Clontarf. Again, issues over health and safety were cited.
Councils have a tricky job getting the best deal for ratepayers but it should not be tempted to blithely accept the lowest tender if it is not convinced the job will be done properly and safely.
As the Queensland council has learned to its cost, a cheap deal one year can result in a very expensive patch-up down the track and an interruption to services, which ratepayers expect to be delivered.