Banned firm won federal contracts
Engineering, architecture and environmental consultant GHD has been added to the World Bank's list of debarred and cross-debarred firms for a year, after the bank's sanctions board found "several distinct types of fraud, on different subject matters, extending over the course of two years" in Indonesia during a $US18 million ($20 million) contract.
Ian Shepherd, GHD's chief executive, said the decision "relates to an incident isolated to this project, over a limited time frame (2007-08) and does not impact on any other projects undertaken by the companies".
The ban means GHD cannot win any World Bank projects, cannot work for a firm awarded World Bank contracts and cannot receive any proceeds from the bank until June 9, next year.
The June 10 sanctions board report found, and GHD did not contest, that the company fraudulently failed to disclose its agreement to pay a $US34,000 "marketing fee" to a subconsultant.
The company also agreed with the report's finding that GHD submitted invoices for reimbursement of $US210,000 in housing costs not actually incurred. GHD agreed that it used false supporting documentation to request reimbursement of $US150,000 in vehicle and transport expenses.
GHD has withdrawn from Indonesia and is thought to derive the bulk of its revenue from Australia.
The federal government's tender website shows contracts with many government departments, such as AusAid and the Department of Foreign Affairs and Trade.
Defence contracts are common, including contracts worth $5.7 million and $3.5 million for building construction and support and maintenance and repair services.
GHD also has roles in Victoria's biggest infrastructure projects: it is the lead technical adviser for the east-west road link, and is working on the Regional Rail Link,the Port of Hastings development and the state's desalination plant.
GHD argued before the sanctions board that it should receive lesser sanctions than the manager and subconsultant, "who were responsible for the misconduct and received negotiated debarments of three years each". But the sanctions board found the company was "at least as responsible for the fraudulent practices as the other two respondents".
Frequently Asked Questions about this Article…
The World Bank added engineering and consulting firm GHD to its debarred and cross-debarred list after its sanctions board found “several distinct types of fraud” on a US$18 million Indonesia contract. The findings included undisclosed payments and false or inflated expense claims related to the 2007–08 project.
GHD was banned for one year. During that period it cannot win World Bank projects, cannot work for firms awarded World Bank contracts, and cannot receive any proceeds from the Bank until June 9 next year (the sanctions board report is dated June 10).
The sanctions board found GHD failed to disclose an agreement to pay a US$34,000 “marketing fee” to a subconsultant, submitted invoices seeking reimbursement of US$210,000 in housing costs not actually incurred, and used false supporting documents to request reimbursement of US$150,000 in vehicle and transport expenses.
The ban applies to World Bank-related business and cross-debarment rules tied to World Bank contracts. The article shows GHD currently holds many federal contracts worth tens of millions with departments such as AusAid and DFAT, including defence contracts of about $5.7 million and $3.5 million, but it does not state that those federal contracts are automatically terminated by this World Bank ban.
GHD is thought to derive the bulk of its revenue from Australia and continues to play major roles in Victoria’s largest infrastructure projects, including acting as lead technical adviser on the east–west road link and working on the Regional Rail Link, the Port of Hastings development and the state desalination plant.
GHD agreed with the report’s factual findings, withdrew from Indonesia, and its chief executive Ian Shepherd said the decision related to an incident isolated to that project in 2007–08 and did not impact other projects undertaken by the company.
Yes. The sanctions board noted a manager and a subconsultant were responsible for misconduct and received negotiated debarments of three years each. GHD argued for lesser sanctions, but the board found the company was at least as responsible for the fraudulent practices and imposed a one-year debarment.
The article notes the federal government’s tender website lists many GHD contracts across departments such as AusAid and DFAT and shows defence contracts and other engagements. Everyday investors can review those tender listings to see the company’s current government contract exposure.
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