Home Affairs Minister Peter Dutton and his department are under increasing pressure over the tender. Bidding was opened for the security contract in 2017, but fell through in June that year after the PNG government pulled out. Little is publicly known about it, but Paladin is believed to have been part of the bid that would have won on that occasion. The collapse of the tender left Home Affairs facing the dangerous and embarrassing prospect of having no security provider in place for the closure of the detention centre and the transition of people into the East Lorengau Transit Centre, Hillside Haus and the West Lorengau camp. Previous security contractor Broadspectrum (formerly Transfield Services) had announced in April 2016 its intention to stop working on Manus Island when its contract expired towards the end of 2017. The company’s final contract was worth $2 billion across several years. A campaign by refugee advocates targeting the company’s shareholders about the ethics of its Manus Island work was influential in Broadspectrum’s decision.

This opened up opportunities for a smaller operator such as Paladin. However, it only had six days to cost and submit its bid to Home Affairs after receiving the official tender documents from the department in late August. Sources with previous experience in applying for and winning large government tenders say this time frame for such a large and unpredictable job made it impossible for taxpayers to receive value for money. At the time, Australia was in the process of preparing to close the detention centre and moving refugees to other facilities. Buildings at the East Lorengau Refugee Transit Centre and West Lorengau Haus on Manus Island. Photo:Â Australian Department of Immigration and Border Protection Almost a month later, on September 21, 2017, Paladin received a letter of intent from Home Affairs, meaning the department took three times as long to assess the bid as the company had to prepare it.

Little is known about the tender process that ended up with Paladin winning the lucrative contracts, other than it was conducted as a “limited” process. This usually means one or very few bidders were approached to apply. Under the government’s procurement rules, a limited tender is usually justified when advanced technology is involved and only one supplier is capable of delivering it. Limited tenders can also be used when the value of a contact is less than $80,000 or the time frame is short, thereby bringing an “urgency” provision into play. In the Paladin case, it would seem the urgency provision was used as a justification for running a restricted tender process. Home Affairs has repeatedly declined to say if other companies were invited to bid or whether it just approached Paladin. The Australian Financial Review last week revealed that Home Affairs had recently extended Paladin’s contract, giving it a further $109 million, despite allegations by a former company executive of questionable payments and misleading conduct during the tender process. Little is known about Paladin and a small number of subsidiary companies. The group’s two key figures, founder Craig Thrupp and his business partner, Ian Stewart, keep a low profile but are believed to have been involved in security work at Manus Island since at least 2013.

Home Affairs Minister Peter Dutton last week sought to distance himself from the tender process that selected Paladin, saying senior officials in his department were responsible for it. Mr Dutton has refused to release a cost breakdown of the contracts with Paladin on the basis it would “cause damage to Australia’s international relations with PNG”. The AFR has reported the department tried to exclude Paladin from Freedom of Information laws, while allowing it to sit outside the usual government procurement guidelines. Loading Home Affairs declined to answer questions about why Paladin only had six days to get its bid in, or about a prior security contract arrangement involving the PNG government that fell through in mid-2017. Instead, it said in a statement: “The procurement of Paladin Holdings PTE Ltd met the Commonwealth Procurement Guidelines.”