Shoalhaven subcontractors’ missing millions Lendlease's responsibility - Defence

Construction of the $138 million maintenance and training facilities for the navy’s new Seahawk Romeo helicopters at HMAS Albatross.
Construction of the $138 million maintenance and training facilities for the navy’s new Seahawk Romeo helicopters at HMAS Albatross.

The Department of Defence says Lendlease is responsible for the outstanding $5 million owed to local subcontractors for the $138 million maintenance and training facilities for the navy’s new Seahawk Romeo helicopters at HMAS Albatross.

Up to 30 local subcontractors are out of pocket close to $5 million after Canberra company Hewatt’s Earthmoving, which had subcontracted to Lendlease as the civil subcontractor for the earthmoving works on the job, went into voluntary administration during the multi-million dollar defence project at the Nowra naval base.

Subcontractors have been fighting for more than four years to recoup the funds they were owed when Hewatt’s went belly up.

Defence says it has “no responsibility”.

A Defence spokesperson said the organisation's contractual arrangement was with Lendlease and that contract defined Defence’s obligations and responsibilities.  

“Defence is not party to the contractual arrangements between subcontractors and the sub-subcontractors and suppliers,” the spokesperson  said.

“This includes payment terms, validity or otherwise of statutory declarations, and knowledge of the extent to which the obligations of either party, under those arrangements, have or have not been fulfilled.”

The spokesperson said following the insolvency of Hewatt in 2014, Lendlease re-tendered the works and directly engaged a number of Hewatt’s subcontractors to complete the works.

“Defence undertakes rigorous financial assessments of all prime contractors it engages,” the spokesperson said.

“Defence expects its prime contractors to exercise the same degree of rigour in their assessments of their own subcontractors.”

The AIR 6000 Phase 8 MH-60R Seahawk Romeo Facilities Project provided facilities to support the acquisition into service of the MH-60R Seahawk Romeo helicopters.

The project was approved by government in December 2012 and parliament in May 2013 with a budget of $189 million.

The approved scope of works included facilities works at HMAS Albatross, HMAS Stirling and Twofold Bay.

Construction started in late 2013, and works at HMAS Albatross were completed in December 2014.

Defence engaged Lendlease Building Pty Ltd (Lendlease) as the head contractor through a competitive tender process.  

Lendlease subsequently engaged subcontractors including Hewatt Pty Ltd (Hewatt) to perform the works.  Hewatt was engaged as the civil subcontractor.

“Lendlease conducted an open tender process, evaluated all tenders, and assessed Hewatt as the most suitable tenderer,” the Defence spokesperson said.

“The process applied by Lendlease included an assessment of the financial viability of all tenderers under competitive conditions.

“Under the head contract arrangement, the contractual relationship pertaining to Hewatt is divorced from the Commonwealth.”

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