Government schools paying double for "stimulus" work -- compared with Catholic schools



A COMPARISON of building costs in a Catholic and a government primary school reveals that the public school is paying twice the amount of fees to consultants as the private school.

The western Sydney primary schools Holy Family, in Emerton, and Lalor Park Public both received $2 million under the federal government's Building the Education Revolution program to build new halls.

A breakdown of costs provided by the Catholic Education Office for the Parramatta diocese shows the non-construction costs at Holy Family school total about $170,000 and include fees to the architect, who acts as project manager, consultants, such as structural and electrical engineers, surveyors, the council and certifiers.

The equivalent costs in the public sector total about $350,000 and include an incentive fee for the managing contractor to finish on time and on budget, on top of its project management fee, the state government's project management cost and "design documentation, field data and site management" worth about $240,000.

Program leader for the BER in the Parramatta diocese Bernard Ryall said the initial building budgets allocated less than 10 per cent of the project's value for fees, presuming a straightforward construction with no complications.

In an extensive refurbishment of 10 classrooms at St Bernadette's Primary in Lalor Park, worth $2m, the non-construction costs were $195,000 while at St Monica's Primary School in Richmond, northwest of Sydney, a 400sq m brick and metal-clad hall built with a $2.5m grant included non-construction costs of $182,000.

Mr Ryall said the key to the smooth running of the BER was determining from the beginning school needs and detailing site complications that would vary costs: "If you have that clarity at the outset, you get good value for money.

"It's when you have constant changes and need to rework plans that you incur additional fees." .

While the NSW Education Department appointed a managing contractor to oversee construction in a region, the CEO in Parramatta co-ordinates the work within its office structure, working with the eight architects engaged to custom-design buildings in its 54 primary schools and four high schools.

Catholic school principals are in the driving seat, working with the architect on the design of the building, with the Catholic Education Office providing support as required.

Holy Family principal Brenda Kennedy said the school hall being built under the BER was designed by the architect who designed the school, which opened in 2004.

"I like to think of it as an oasis in the middle of Mount Druitt," Sister Kennedy said.

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More revelations about huge "stimulus" waste

THE federal government's $16.2 billion education building stimulus package could have delivered thousands more school buildings had it not been for inflated costs including a series of secret fees paid to major construction companies.

The Australian can reveal managing contractors in NSW have been charging fees of between 12.5 and 16.5 per cent on projects - about 3 1/2 times amounts suggested by the federal government - adding as much as $500 million to the cost of the Building the Education Revolution rollout in NSW.

Managing contractors are further entitled to charge 5 per cent in "contingency fees", a 1.3 per cent fee for reporting to government and unspecified "design and price risk" fees.

A senior contracting source familiar with the fee arrangements, who spoke on condition of anonymity, told The Australian one of the seven major contractors in NSW, the Reed Group, had levied 20.93 per cent in fees on work done. "I was amazed to see such high fees," the source said. "I have not seen anything like this previously. I and many others working on this program are receiving nothing like this."

A spokesman for NSW Education Minister Verity Firth yesterday confirmed the 20.93 per cent figure, saying it included "site supervision, profit margin and incentive payments".

Federal Education Minister Julia Gillard has repeatedly insisted project costs for managing contractors were capped at 4 per cent. "In terms of project costs, the target there is 4 per cent, which is the amount that is used as a benchmark in commercial construction about project costs - so there we have it," she told 2GB broadcaster Ray Hadley on March 15.

Ms Firth's spokesman said the state was not in breach of the federal government's 4 per cent cap. "Project management fees are capped at 4 per cent. Site supervision, profit margin and incentive payments are not project management fees," the spokesman said. The spokesman declined to comment when asked why the government had earlier refused to list the secret fee structure.

NSW Education Department director-general Michael Coutts-Trotter said the approach was required to ensure the BER program was delivered on time, which was a condition of the federal government's funding. He said the managing contractor process was chosen to ensure the projects were delivered on time, safely and to the highest building standards.

A comprehensive investigation by The Australian reveals the secret fee structures, which have never before been publicly disclosed, are known as "Fee A" and "Fee B". Those fee structures, which go some way to explaining some of the huge variations between the cost of buildings under the BER and standard costs, have been used by the managing contractors and the state government since tenders were originally taken.

Despite requests for details of total fees to managing contractors, the NSW government had refused to disclose totals until presented with the "Fee A" and "Fee B" structure by The Australian.

Under the fee structure, managing contractors who employ outside builders to carry out the work are paid "Fee A", which averaged 11 per cent. Managing contractors who use in-house builders are paid "Fee B", which averaged 15 per cent. In addition managing contractors are entitled to an "incentive fee" of between 1 per cent and 3.25 per cent, which averaged about 1.5 per cent of all BER funding.

The revelations come as Wayne Swan conceded some schools might have been rorted under the scheme. "It may be the case that, given we've got 9000 schools in Australia, in some cases it may have been rorted and that should be investigated and stamped out," the Treasurer said.

A spokesman for Ms Gillard said maximum project management fees of 4 per cent charged by managing contractors did not relate to other fees such as "site management" and other on-site costs. "While the states and territories are responsible for the implementation of BER projects, we want to make sure we're getting value for money which is why we have strict requirements in place in relation to project management costs," Ms Gillard said.

"The Department of Education, Employment and Workplace Relations is closely monitoring project progress in each state and territory through the submission of monthly reports. Should they find evidence of mismanagement or proof that the 4 per cent project management cap has been breached, then we will be following up these cases."

While the "Fee A" and "Fee B" structure explains part of the inflated costs, billions of dollars still remain unaccounted for.

Non-BER builders contacted by The Australian to conduct quotes on structures provided under the scheme have expressed dismay at the huge inflation in costs. Standard prefabricated double classrooms - known as "MDR Homebase" classrooms - are typically built and fully installed by manufacturers to specifications similar to those under the BER at a price of up to $500,000. Under the BER, the same structures are being costed at between $800,000 and $1m - 60 per cent higher than standard rates.

The Parents and Citizens Association of Eungai Primary School in northeastern NSW was so concerned about the price of its MDR Homebase it requested a breakdown of the fees involved from the NSW government three weeks ago. Despite a typical cost breakdown consisting of about one page of information, the P&C committee has still not received a response.

Covered outdoor learning areas, spanning 30m by 25m, typically cost between $170,000 and $250,000, including full installation, according to builders. NSW government figures show more than 40 COLAs under the BER have been costed at more than 800,000 in NSW alone. The huge fees are not isolated to NSW, with gouging identified across the nation.

The problem appears most pronounced in the eastern states where state governments have employed managing contractors to oversee the roll out.

Cairns builder Geoff Lewis said he had been negotiating with a major contractor to build a series of structures under the BER but left the scheme after he calculated the contractor was earning fees of up to 30 per cent on the projects. "I've been a builder and avoided doing any government work like the plague for 25 years with all the problems that come with it," Mr Lewis said. "With the economic downturn I stuck my nose in to see whether there was anything I could get my teeth into. "I have detailed spreadsheets and the major contractor is ripping 35 per cent out of every job."

Mr Lewis said once those fees were taken out, an $850,000 funding package left him with less than $550,000 to spend on the project. "I was gobsmacked but when I contacted them the managing contractor told me to `value engineer' the project, which is a very nice term for shrinking it to reduce building costs."

In Queensland fees soak up as much as 20 per cent of the $2.1 billion in taxpayer funds earmarked for state primary schools. Queensland Education Department director-general Julie Grantham said at least 80 per cent of the funds was being spent on buildings, furniture and equipment.

Her department's assistant director-general for infrastructure delivery and operations, Graham Atkins, said consultants' fees varied between sites.

Smaller builders claim the discrepancies between what major contractors have charged under the BER and what small builders typically charge have arisen because the managing contractors are unaccustomed to dealing with such small projects.

"These big players are used to managing huge individual contracts, often in the hundreds of millions of dollars, where these types of high fees are the norm," said one builder who previously did state government schools contracts and is now doing work under the BER.

"They have huge overheads for those projects but for building these small projects the fees on the ground are nothing like that."

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Lunatic Leftism in schools

Any intelligent teacher tries to get the kids on side but discipline is needed too

TEACHERS trying to restore order in their classrooms are being asked to ditch tough disciplinary measures for such tactics as standing on a green spot or pointing to a message on a wall.

Traditional methods for dealing with disruptive children, such as detention and loud reprimands, are being cast aside in favour of merely "hinting" at bad behaviour. The techniques are part of an Education Department program being tested at more than 100 state schools in disadvantaged areas.

Some of the methods, criticised by a family group as "pie in the sky", urge teachers to give up "power" and become "agents" of their students.

Strategies to improve class behaviour include involving students in deciding rules and discussing with them the impact of their misbehaviour.

But Australian Family Association spokesman John Morrissey, a part-time teacher, said the program sounded like a throwback to the 1970s. "A lot of this is pie in the sky stuff," he said. "If you don't have a tight ship being run at school, and some backup from home, it is very hard to achieve discipline."

Liberal education spokesman Martin Dixon said improving academic standards shouldn't mean turning classroom practice on its head.

But the scheme's facilitator, La Trobe University's Prof Ramon Lewis, said it was all about using gentle hints rather than being aggressive with unruly students. "You identify ways of letting kids know that someone's rights are being ignored without necessarily forcing them to do anything about it," he said. "So, basically, it's a skill of hinting. That can be a sign on the wall you can point to. "One teacher has got a green dot on the floor on which he actually stands to indicate that right now someone is not doing the right thing."

Prof Lewis, who has been researching classroom management for decades and has written several books, said discipline still had a place.

Some of his techniques are being used at north suburban schools, under an Education Department initiative called Achievement Improvement Zones, in a bid to lift literacy and numeracy levels and improve teachers' practices.

Acting Education Minister Maxine Morand said trials did not replace traditional classroom discipline. "Principals and teachers at Victorian government schools already have the power and autonomy to deal with students behaving inappropriately," she said.

An Education Department spokesman said Prof Lewis had more than 20 years' experience in training teachers in how to use positive reinforcement techniques to encourage good behaviour.

Broadmeadows Valley Primary School principal Andy Jones said Prof Lewis's program had been well received and had good results. "A lot of what he does is quite out there," he said. Prof Lewis's methods were also backed by youth psychologist Dr Michael Carr-Gregg and Parents Victoria, which said fresh ideas were needed to deal with difficult children.

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The latest battle with the navy's hugely expensive dud submarines

Will they ever work? It's no wonder that the navy can't enlist enough crew to man them all

MOST of Australia's strife-ridden Collins class submarines were fitted with dud generators when they were built, it was revealed yesterday. The Defence Department official responsible for rehabilitating the Collins class fleet, Kim Gillis, told a senate subcommittee the navy had discovered five of the six submarines were built with flawed Australian-made generators.

"The generators on HMAS Collins, the original ones, were manufactured in France; inspections of those indicate they're very solid and we're not expecting to have a failure of those," Mr Gillis said.

"The remainder of the Collins class submarines had their generators manufactured in Australia, and are susceptible to this particular failure. They weren't done properly when they were first manufactured."

Mr Gillis said the fault was confirmed during repairs to HMAS Farncomb, which was recalled to port last month after suffering generator failure, but had overhauled generators reinstalled yesterday. Mr Gillis stressed that the repair job had taken about a third of the predicted time.

It is believed the cost of modifying Australian-made generators is about $125,000, and each submarine has three.

The Collins class vessels, the largest conventionally powered submarines in the world, have become synonymous with controversy, underperformance and delay since the first of the fleet, HMAS Collins, was launched in 1996.

Last month it emerged that HMAS Rankin will be out of action for five years and HMAS Sheean for four years. It was also revealed that the government is demanding $5 million in compensation from the Australian Submarine Corporation over separate defects that have kept Collins incapacitated.

By the time Sheean and Rankin are relaunched, they will have overhauled generators. The two remaining subs, Waller and Dechaineux will be nursed along with the substandard generators until their next scheduled maintenance stop.

Mr Gillis told the committee that by having three generators, there was less likelihood of failure. He said the government would have little chance of gaining compensation from the manufacturer of the generators, which drew a hostile response from the subcommittee chairman, the Labor MP Arch Bevis. "If we're in the habit of handing out money to Australian businesses, or American businesses, or anyone else, we should sure as hell be in the business of making sure that what they provide is what we pay for."

The Defence Department also admitted yesterday flaws had been found in European helicopters that will replace Australia's fleet. It was revealed last month that a German military report had pinpointed serious deficiencies in the MRH-90 helicopters; Australia has ordered 46 of them. Major-General Tony Fraser said there were problems with the chopper's floor being too thin.

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Reefgate: More Greenie dishonesty about coral reefs -- including secret data again (of course)

Following is a letter from Walter Starck [wstarck@gmail.com] to an academic journal about a recent article they published which violates many canons of science. Walter Starck is one of the pioneers in the scientific investigation of coral reefs.

The article Starck criticises advocates banning fishermen from as much of Australia's Great Barrier reef as possible and gives as one of the reasons: "Given the major threat posed by climate change, the expanded network of marine reserves provides a critical and cost-effective contribution to enhancing the resilience of the Great Barrier Reef"

Re: McCook, L.J., et al. 2010. "Marine Reserves Special Feature: Adaptive management of the Great Barrier Reef". PNAS 2010: 0909335107v1-200909335.

The above referenced study presents a number of concerns:

The most serious concern is a major conflict of interest involving all of the 21 authors. It should be noted that the lead author is employed by the Great Barrier Reef Marine Park Authority (GBRMPA) and all of the 20 additional authors are either employed by them or are recipients of substantial funding from them.

It is incongruous in the extreme that all these employees and repeated recipients of generous GBRMPA funding, could, “…declare no conflict of interest.” when they are in fact assessing the benefits of their own work and that of the organisation which supports them.

Combined with the rather unrestrained positive spin on the benefits and cost effectiveness achieved by GBRMPA management, the appearance of this report is that of a promotion piece which the most productive and respected beneficiaries of their research funding have been invited to endorse.

In such case, it would have been very difficult for them to decline or to offer much objection to the claims made. At the same time, their names and status would provide credibility and deterrence of criticism while greatly increasing the prospect of acceptance for publication in a prestigious journal such as PNAS.

In addition, PNAS, “Authors must acknowledge all funding sources supporting the work.” There appears to be no such disclosure in this study.

PNAS must also, “…make materials, data, and associated protocols available to readers.”

McCook et al. state that, “Another important observation emerging from this review is the extent of relevant data that are not published or readily accessible. A full picture of the effects and effectiveness of zoning on the GBR has required extensive use of gray literature, previously unpublished data, and collation of separate data sources.”

GBRMPA has been the sponsor of most of the research cited and, through the permit system, they exercise control over the terms of all other research conducted there. They are also a major publisher of GBR literature, both scientific and non-technical. The extent to which relevant data is not published or readily accessible is their direct responsibility. As the data referred to for this review has obviously been assembled, why has it not been made available?

The major claim of a doubling of fish on protected reefs appears to rest on a single example. This is inconsistent with abundant other evidence including that which is presented in the report itself. Only one reef area of the 8 featured in the report showed a 2-fold increase and that area had the lowest level to begin and lowest difference between fished and unfished reefs.

In 5 of the 8 areas featured in the report the protected reefs actually showed a decline in coral trout numbers. On fished reefs, three areas showed increases in biomass while 5 showed declines. This is hardly the “extraordinary” 2-fold increase in protected areas being bannered.

McCook et al. state, "The economic value of a healthy GBR to Australia is enormous, currently estimated to be about A$5.5 billion annually...." "Relative to the revenue generated by reef tourism, current expenditure on protection is minor." "Tourism accounts for the vast majority of reef-based income and employment. ...income from tourism is estimated to be about 36 times greater than commercial fishing."

These claims are highly misleading. The economic value cited includes the total value for all tourism in the region when half of all tourists do not even visit the reef. For those who do, the reef component of the large majority is a one day, one time participation in a reef tour and the value of reef tours is similar to the value of commercial fishing.

If one also considers the economic value of recreational fishing, retail fish sales and seafood meals in restaurants, the total value of fishing is closer to twice that of reef tours. In addition, the reef tour industry regularly uses only about 2 dozen out of the 2500 reefs of the GBR and, on those which are used, the actual area visited would only be about 1% of the area of even those reefs.

Unfished reefs to optimize scenic value for tourism could easily coexist with an order of magnitude greater fishing effort, and no detriment at all to tourism. The attribution of total tourism value to the reef is no more justifiable than attributing it to the similar numbers who visit the rainforest or who eat seafood meals while visiting the region.

Such claims have been repeatedly made by GBRMPA and would, if used by a business, constitute violations of advertising and corporate law. To see it done repeatedly and included in a report in a leading scientific journal is a sad indictment of GBRMPA sponsored science as well as basic honesty.

Babcock et al., 2010 (in another study published in PNAS on the same day as McCook et al.) also examined the ecological effects of marine protected areas. However, this report is much more widely based geographically and longer term. Although the observed effects were generally positive, they were decidedly less large, rapid, extensive, and uniformly positive than those reported for the GBR. All of them also involved areas subject to much greater fishing pressure than the GBR.

One might reasonably expect that increased protection for the least impacted areas would result in a less marked beneficial effect rather than the much more widespread rapid and dramatic benefits claimed by McCook et al. For example, Babcock et al., “…found that the time to initial detection of direct effects on target species … was 5.13 ± 1.9 years….”

Note that this was the time to initial detection, not the even longer time required to reach a doubling of population. When compared to the much greater effects claimed for the GBR over two years, the latter do indeed appear to be “extraordinary”.

Various key claims are contradicted by other more extensive work by the same researchers with no acknowledgement or discussion of this.

In reading over McCook et al., some 40 such discrepancies were noted and more detailed examination would surely reveal more. However, without going further it should be clear that PNAS has been badly used. The serious and obvious conflict of interest alone can neither be ignored nor credibly explained away. If not addressed, it makes a farce of the declaration of no conflict. It alone must surely be more than sufficient grounds to retract this study. Although doing this may be unpleasant it would be far less damaging than to try to examine and defend all of the sad and disreputable details.

Coming at a time when public credibility in science is being seriously eroded by ongoing revelations of malpractice in what the public was assured was inrrefutable fact and settled science regarding climate change, these “extraordinary” (their own description) claims regarding the GBR are well positioned to become a “Reefgate”. This is especially so in that a key claim in this report and widely made elsewhere, is that a major benefit of protected areas on reefs is the increased resilience they provide against climate change.

Although controversy regarding the management of the GBR may appear of minor public interest from a U.S. perspective, it will be national news here in Australia and PNAS could find itself very much involved in a most difficult to defend position should prompt and decisive action not be taken.

A public release on all this will be made here in the near future. Whatever the decision of PNAS, it would be better made sooner than later.