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HUNTER businesses are angry that Lake Macquarie City Council has moved to hire a private company to conduct a tender process for hiring trucks and other machinery.
Businesses say the move could cost ratepayers money.
The council says it is a trial.
Business people expressed their opposition at a meeting at the council’s work depot last night.
The council said it cost it ‘‘more than $30,000 to run a major tender, including contract management’’.
‘‘It is anticipated that by using the services of Procurement Australia, the cost to council should remain similar,’’ a statement said.
Cr Daniel Wallace said he was concerned that the council was giving businesses no option but to pay a 2.2per cent fee to Procurement Australia on every job the businesses did for the council.
‘‘It’s a case of if you don’t pay, you don’t get to play,’’ he said. ‘‘Unions are not allowed to do this type of thing.’’
He said Woolworths and Coles ‘‘play these types of games with farmers’’.
Cr Wallace said some tenderers might absorb the 2.2per cent fee, rather than pass it on to the council in the prices they charged.
He said that might put downward pressure on council costs, but could lead companies to take shortcuts on safety and rest breaks to make savings.
He said companies that did pass on the fees to the council might become less competitive.
A council statement said the trial would allow it to ‘‘determine how it can introduce improved procurement skills and knowledge’’.
The council confirmed that Procurement Australia had ‘‘requested contractors to sign a confidentiality agreement’’.
It said the primary purpose was for participants to declare any conflict of interest.
Used with PermissionDAMON CRONSHAWNewcastle Herald
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