The Department of Defence will not be following the NSW Government’s lead and bailing out local subcontractors left out of pocket from a major defence contract a HMAS Albatross.
Around 30 local subcontractors are owed close to $5 million on the $138 million maintenance and training facilities for the navy’s new Seahawk Romeo helicopters at Nowra air station after contractor Hewatt’s went into voluntary administration.
But any hopes the local subbies might get support from the federal government has been dashed following a statement from Defence.
A spokesperson for Defence Minister Marise Payne said any proposition the Commonwealth should also pay the debts apparently accrued by Hewatt’s would be suggesting that the Australian taxpayer pay twice for the same work, which would not be fair to Australian taxpayers.
Read more:Subbies stuck in middle of war of words
The NSW Government recently agreed to pay subcontractors who experienced a similar situation while working on the Pacific Highway on the North Coast, which Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell, who has led an inquiry into the Nowra project, believes sets a precedent the federal government should follow.
“Defence contracted Lendlease to undertake works at HMAS Albatross, which in turn sub-contracted Hewatt for the project,” Minister Payne’s spokesperson said.
“Defence has paid Lendlease for that work, and Lendlease has publicly stated that it has paid Hewatt all monies owing.”
Asking Australian taxpayers to pay twice for the same work, would not be fair to Australian taxpayers.Defence
Defence has previously stated “it undertakes rigorous financial assessments of all prime contractors it engages”.
“Defence expects its prime contractors to exercise the same degree of rigor in their assessments of their own subcontractors,” the statement 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. 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.”