HQJOC barely a better deal for taxpayers - Australian Defence Magazine

Taxpayers gained only marginally better value from building the ADF's Joint Operation Command HQ near Bungendore under a public private partnership instead of a traditional procurement deal, the Australian National Audit Office (ANAO) has found.

The ANAO said the former government approved the construction and operation of HQJOC by a private company on condition that it achieved superior value for money.

Defence had calculated the project to cost $515.64 million when it let the contract in June 2006.

The prime contractor costed the project at $514.7 million.

The audit office said this meant that when the decision was made to enter into a PPP arrangement the financial benefit,compared to direct procurement, was estimated at potential savings of $0.94 million over 30 years.

Interestingly, we learn that to calculate the value for money Defence needed to assess the costs of the two procurement models.

To do so it spent $15.7 million on a range of external advisors, according to the ANAO report.