All capital works programs which cost more than $2 million dollars have to be reported to the Public Works Committee and if they are more than $15 million in scope then they must be referred to the committee. But just what is the Public Works Committee and how does it work?

Defence at the present time does not have any projects before the committee, but with major works programs such as the Moorebank Units Relocation or Single Living and Environment Precinct 2 already approved and well underway, and others on the horizon, it is important to understand how the system works and what it does to protect taxpayer’s investments in Defence infrastructure.

What is the Public Works Committee?

The Public Works Committee, or to give it its full title, the Parliamentary Standing Committee on Public Works, is one of the oldest investigative committees of the federal parliament, having been first established in 1913, and currently established under the Public Works Committee Act of 1969.

It examines capital works proposed by Commonwealth Departments (including Defence) and statutory authorities which are directly funded from the federal budget, and for the works of non-competitive statutory authorities and calls to account planning decisions and capital expenditure.

The Committee reports to both the House of Representatives and the Senate on whether any public works to it are deemed to be expedient and whether, in its opinion, the work should proceed. Work cannot proceed until parliamentary approval has been granted, including any clearing, demolition work or preliminary earthworks prior to any proposed construction activities.

These proposed public works can be anywhere in Australia or its external territories, including foreign countries if this work is linked to an Australian diplomatic mission. Two exceptions to this are any works funded by the Norfolk Island Administration, or works which are declared by the Governor General to be exempt.The Public Works Committee is a joint committee consisting of nine members, which includes six members of the House of Representatives and three members of the Senate. By convention, the elected Chairman is a Government Member of the House of Representatives and the Deputy Chair is a non-Government Senator.

Terms of reference

When a capital works project is referred to the Public Works Committee it is scrutinised to ensure that meets a pre-determined set of criteria, which includes the need, scope, cost, purpose and value for money.

The Committee will determine the stated purpose of the proposed work and whether it is suitable for its intended purpose. It then looks to determine if it is a cost-effective solution and if the resultant work is intended to raise revenue, whether it will fit the purpose. The current and prospective public value of any work is also determined.

During the course of its enquiry, the Committee will seek public comment on the proposed work and hold a public hearing with the agency proposing such work and any other relevant body and will also receive a confidential briefing from the proposing agency with regard to the projects costs and may also undertake a site inspection.

The Committee has the powers under the act to recommend any alterations to the original proposal it sees fit before it reports to both Houses of Parliament on whether it considers the work should proceed.

When does a works program have to be reported or referred?

Under the Act, all proposed public works undertaken by, on or behalf of the Commonwealth must be referred to the Public Works Committee if the estimated cost exceeds the threshold amount, which is currently set at $15 million. Any project below the threshold may also be referred to the Committee under the provisions of the Act, but in practice this provision is rarely exercised.

In addition, if the proposed work is between $2-15 million, the Committee must be notified prior to the commencement of any work. This is termed ‘medium work’ and is reported to the Committee as a matter of course. It does not go through the rigorous referral process.

In addition to projects directly funded by the Commonwealth, the Committee scrutinises works financed through lease initiatives if he Commonwealth or one of its agencies is to become the user or owner, for example if the Commonwealth is leasing accommodation which is being upgraded or fitted out.

The definition of what constitutes Public Works also extends to Public Private Partnerships (PPP), even if the Commonwealth will not ultimately take ownership. However the considerations of works carried out under a PPP requires a two-stage process, whereby the referral occurs after an Expression of Interest has been issued but before a Request For Tender has been released. Once a preferred tenderer is selected but before any contracts are entered into a report is issued to the committee to confirm that the workscope has not significantly changed.

What is the process?

Basically there are six steps in the referral process: Referral of the proposed works to the Committee in the first instance; Public Consultation; Site Inspection (where necessary); Public Hearing; The presentation and tabling of the draft report to both Houses of Parliament; and finally, the granting of approval by the House of Representatives and the Senate.

No work may be undertaken prior to approval being granted by both Houses. This is via a resolution that ‘It is expedient to carry out the work’, and known as the ‘expediency motion.’

Referrals can be made through either House, or through the Executive Council and are co-ordinated by Finance. Works may also be referred by order of the Governor General when both Houses are adjourned for any long than a month but, in practice, this is rarely done.

The Act also bestows the Public Works Committee with the powers to review its reports is there have been considerable scope or cost changes to a particular project.

For Defence Capital works, the referral is normally made by the Special Minister of State during the Parliamentary sitting period and co-ordinated by the Department of Finance and Deregulation. The Director General Capital Facilities Infrastructure is the principal point of contact for all infrastructure-related PWC matters and is the Defence lead witness at infrastructure-related PWC enquiries.

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