Peter O’Neill says he would welcome an investigation by Australian authorities, as Labor cites ‘significant concerns’ with the contract

The Papua New Guinea prime minister, Peter O’Neill, has requested a full briefing on the Paladin affair and said he would “welcome any investigation by Australian authorities”.

O’Neill, speaking to local media overnight, said PNG had nothing to do with awarding the Paladin contract and gave no input to the Australian government’s decision.

“We welcome any investigation by Australian authorities in the manner in which the issued Paladin contract was awarded to an inexperienced and unknown company, but that is a matter for the Australian government,” O’Neill said, according to the Post-Courier.

“We will request a full briefing on this matter from our Immigration Department who handles all operational issues with Australia.”

Meanwhile, Labor has referred the $423m of contracts controversially awarded to Paladin companies for security in Papua New Guinea to the auditor general, citing “significant concerns” with the companies.

After home affairs testimony in Senate estimates on Tuesday revealed the “urgent circumstances” that gave rise to the closed tender process, Labor’s immigration spokesman, Shayne Neumann, has written to the auditor general requesting an audit.

Neumann said an urgent investigation was warranted given “the level of expenditure associated with these contracts, the government’s poor track record, and the concerning reports and allegations related to the entities involved”.

Home affairs denies it was 'desperate' when $423m Paladin contract awarded Read more

Neumann noted that the department had approached Paladin Solutions Group “directly” and “Paladin Solutions Group only” offering a contract for provision of garrison support and welfare services in Papua New Guinea.

That contract came after services totalling $89m were provided under letters of intent signed in September 2017.

The contract was allowed under special measures provisions in commonwealth procurement rules, which departmental secretary Michael Pezzullo said was necessary because the PNG government revoked its offer to provide the services and major companies were not interested in tendering.

Neumann noted Pezzullo’s evidence that his “very strong preference would have been to have a long lead time, an open tender, a global search, assisted by specialised consultants and advisers”.

“Despite this preference, a subsequent contract worth $333m awarded to Paladin Holdings Pte Ltd was signed on 28 February 2018 with no other providers considered – despite reports today indicating that other companies, such as Toll Holdings, were considering bidding,” Neumann wrote.

Neumann cited the Australian National Audit Office’s 2017 report concluding that the department had “fallen well short of effective contract management practice” in garrison support and welfare services in Nauru and PNG.

He said the report was a “damning indictment” on the department that found contracts “were established in circumstances of great haste”, the department “did not put in place effective mechanisms to manage the contracts” and contract variations totalling more than $1bn were made “without a documented assessment of value for money”.

“Labor is acutely aware of the current government’s abysmal management of Australian-funded regional processing centres and their failure to negotiate other third-country resettlement options, leaving vulnerable people languishing in indefinite detention.”

Paladin companies had little experience in providing garrison and security services in immigration detention, and the contracts have become more controversial after a series of reports in the Australian Financial Review about the firm, which until recently listed one of its business premises as a beach shack on Kangaroo Island.

Asylum seekers say Paladin 'doing nothing' for its $423m Manus Island deal Read more

Refugees on Manus Island told Guardian Australia the security contractor was “doing nothing” on the ground, while Greens senator Nick McKim has noted he was on Manus Island at the time of the closure of the detention centre, and services were not being provided.

Hundreds of detainees on Manus Island remained in the closed facility without food, water or medical supplies for more than a fortnight.

In a statement, the home affairs department said the Paladin Group was “a global company which has delivered security and related services to a broad range of government and private sector clients across the Asia-Pacific region since 2007” and had been operating in PNG through a local entity, Paladin Solutions PNG Ltd.