THE consumer watchdog is prosecuting three builders that have been handed a $58 million slice of taxpayer-funded Building the Education Revolution work, accusing them of "price-fixing and misleading or deceptive conduct" in tendering for other earlier government construction projects.
The construction firms - T.F. Woollam & Son Pty Ltd, J.M. Kelly (Project Builders) Pty Ltd and Carmichael Builders Pty Ltd - deny the accusations and are defending the case in the Federal Court in Brisbane.
The trio shares building work totalling $58m at 41 Queensland primary schools, funded through the federal government's $16.2 billion BER scheme.
The Australian Competition & Consumer Commission action was launched last September, after the companies were granted BER contracts through Queensland's Department of Public Works.
J.M. Kelly project director John Murphy said yesterday the Queensland departments of public works and education had put the company "on notice" once they became aware of the ACCC's action.
"We were certainly put on notice about certain items," Mr Murphy said.
"That is confidential. There is a presumption of innocence while this is before the courts.
"I feel under the circumstances, we were dealt with fairly. Obviously, we are defending the action brought by the ACCC."
The competition watchdog has alleged that, between 2004 and 2007, the three companies were involved in "cover pricing" by colluding on government tenders. The allegations relate to the upgrade of Rockhampton airport, work for Queensland Rail, and the construction of a school on the Gold Coast.
The case is listed for a Federal Court hearing in July.
Queensland Public Works Minister Robert Schwarten said yesterday the contractors were innocent until proven guilty, and his department was not in a position legally to exclude them from government work.
But Mr Schwarten revealed the director-general of the Department of Public Works had advised the companies they "will not be included on the same tender lists", meaning they could no longer bid against each other.
"We have indicated to these companies that should any untoward or illegal practices which resulted in the taxpayer not receiving value for money be discovered, then clearly the contractors concerned would be dealt with," the minister said.
Mr Schwarten said the contractors had to abide by ethical contract conditions to pre-qualify for government work.
"Should the ACCC investigation reveal shortcomings in this regard the director-general . . . has advised the contractors that action will be taken," he said.
Mr Schwarten failed to answer questions from The Australian about whether the work went to tender and how much money the contractors would pocket in management fees.
He said an "analysis of contracts" indicated the government was getting "value for money".
Federal and state education department documents show that J.M. Kelly has been awarded 16 BER projects worth $23m; T.F. Woollam 12 projects worth $20m; and Carmichael Builders Pty Ltd 13 projects worth $15m.
Mr Murphy refused to reveal J.M. Kelly's management fees yesterday, but said they were less than the 6 per cent being paid to eight construction giants managing $840m of BER work in Queensland.
"It's commercial-in-confidence within the industry," Mr Murphy said. "Woolworths don't publish how much money they're making on a bag of peas, and it's the same thing."
Mr Murphy said five of his company's BER projects had not been put to tender, but had been certified by Education Queensland's independent quantity surveyors.
"In some cases the price got adjusted due to fluctuations in the scope of the work," he said.
Carmichael Builders and T.F. Woollam did not return calls yesterday.
A spokesman for federal Education Minister Julia Gillard refused to comment, saying it was an issue for the Queensland government.
