PSV ISSUE CLOSED

One of the earliest issues the CMPA reviewed on behalf of a member was the failure of VicRoads off-shoot Sprayline to advise of a PSV specifications change when requesting sealing aggregate rates.

The CMPA member won the tender to supply but subsequently discovered the change in PSV specification – a situation that essentially rendered them unable to supply the materials.

The CMPA also sought advice from a trade practices policy expert who indicated that according to the Trade Practices Act silence in negotiations can be misleading if the silence fails to disclose an important element of the contract.

Sprayline as a government owned business is subject to the Fair Trading Act and it was suggested that the provisions of the TPA would carry to cases under this Act. As such, it was advised that Sprayline has the responsibility to clearly advise suppliers of its requirements and to remain silent on requirements would be misleading.

After considerable representation by the CMPA the matter has now been finalised to the satisfaction of the member affected. The following is a summary of the activity undertaken by the CMPA in its dealings with Sprayline and VicRoads to ensure member’s concerns are raised and addressed in a authoritative manner by all parties concerned.

The Following Story was compiled by Chairperson of the Policy & Special Issues Committee, Mr Bruce McClure on Behalf of the CMPA.

One of the main reasons for the formation of the CMPA was to provide the small Quarry owners, the small privately operated quarries with a voice. The Polished Stone Value (PSV) issue highlights the need for an organization that is prepared to support and to go into bat for quarry people who are being treated unfairly, who cannot get an answer to a legitimate question or who are simply being ignored.

The PSV was the first major issue that the CMPA has tackled. Although the final result may not have been as good as we may have liked, the issue is of significance in that it has made organizations like VicRoads and SprayLine realize that their actions are being examined and that industry members will hold them accountable for actions that are deemed blatantly unfair or restrictive. Small owners operators now have a voice.

A CMPA member who had been requested to provide prices for the supply of sealing aggregate to SprayLine in North Eastern Victoria initiated the PSV issue. The quarry owner was not advised of a change in PSV from 48 to 52 at the time of providing rates and no copy of the relevant specification was sent to him.  SprayLine subsequently won the sealing contract from VicRoads and advised the CMPA member that his rates had been included in their successful tender. Late the following month the CMPA member was sent a letter from SprayLine advising him that the aggregate supplied had to conform with a PSV of 52. Our member was unable to supply the aggregate to SprayLine due to his inability to produce a product to a PSV of 52 in the timeframe required. He had a considerable quantity of material meeting a PSV of 48 available, which he had been producing for many years and had been supplying to the various sealing contractors in the North Eastern Area.  This change of PSV obviously resulted in the CMPA member suffering a loss of income.  Our member did not receive any official reason for this PSV change and hence, sought CMPA help in seeking these answers. It should be noted that our member shortly after he was advised that his material had to conform with a PSV of 52, did receive a copy of a letter from a SprayLine Officer to a VicRoads Officer in the North Eastern Region which the CMPA believes may give some indication as to why the PSV was changed. This letter contained a number of paragraphs that raise concerns to the CMPA. These are as follows.

“I confirm your telephone call of …… regarding the use of aggregate with PSV 52.  Your instruction was: no quarry will be accepted with less than PSV 52 for this contract. I wish to advise that at least four quarries will now be excluded. These are Pioneer Kilmore, Mawsons Lake Cooper, Violet Town Quarries, Boral Culcairn. 

I refer to the compulsory tender meeting at your office on ….. and a reply to a question regarding PSV. The answer given was, “The PSV was intended to exclude aggregate from one quarry only in the south and all the other quarries would not be affected” This quote is from notes taken at that meeting.

This is currently not the case and I attach a letter from ……

It is my understanding that texture depth has a much greater influence on skidding vehicle accidents than the PSV value of the aggregate; that slick, full surfaces, where there is no macro texture to contain and drain water, are the most serious concerns of adhesion of tyres. You recognize this fact in Tables 408.104 and 408.105, and 408.106 in Contract 4886 and have clearly required only PSV of 48.”

The above are the main paragraphs of interest.

The CMPA decided to contact SprayLine and VicRoads to ascertain why the value had been changed and for what reasons.

SprayLine was contacted regarding this issue and asked why no tender documents and specification are sent to their suppliers when they are requested to supply prices, if SprayLine knew why the PSV had been changed, and when did SprayLine first become aware that the value had been changed by VicRoads. SprayLine in response stated that it is not their practice to issue copies of the tender documents to potential suppliers. Furthermore, SprayLine stated that it requests prices for delivery to various locations with the implied understanding that the aggregate complies with VicRoads Standard Specifications. SprayLine then stated that it is the supplier’s responsibility to ensure that it is informed and up to date with the requirements of a particular job and price accordingly. With respect to the two other questions, SprayLine stated that they had not been given any reasons for the PSV change and that they had first become aware of the change in PSV after seeking associated rates from suppliers who alerted them to the change. 

Following the CMPA correspondence with SprayLine VicRoads was contacted and asked a number of questions on the PSV value change. These included the following:

• When did VicRoads decide to change the PSV from 48 to 52?
• Why did the change take place and what is the basis of the change?
• Why were the specific locations for use of a PSV of 52 chosen and why only in VicRoads North Eastern Region?
• Why was SprayLine Surfacing Services not advised of the change in the PSV value?
• Why was there no consultation by VicRoads with Industry and in particular the quarries in VicRoads North Eastern Region, regarding the PSV change? What is VicRoads policy on notifying Contractors of changes in specifications for important issues such as PSV values?

The following answers to the above questions were received from VicRoads:

• VicRoads has not changed the PSV requirements in its standard specification for sealing aggregate, it is still 48.
• VicRoads will sometimes specify a higher PSV in areas where high pavement stress is expected. The recent contracts advertised in North Eastern Region had significant areas that were assessed as requiring the higher PSV and it was applied to the whole contract in an attempt to simplify the administration and delivery process.
• SprayLine Surfacing Services received the same contract documentation as other contractors that contained details of the PSV requirements.
• VicRoads consults with Industry when there are proposed changes to standard specifications. This is usually achieved in consultation with Industry Associations.
• Where any requirements for a contract are different to the standard specifications this is clearly stated in the documentation provided to all contractors.

It should be noted that the CMPA was actually formed after the above problems with the change in PSV affected our member.

Following the above letter from VicRoads, the CMPA sent another letter to VicRoads seeking clarification of a number of points. These included the following, which have been summarized:

• What is meant by high pavement stress and the relationship to PSV
• Why was the requirement for higher PSV for various areas dropped from the following years sealing contract in the North Eastern Region when many of the roads being treated were within the same areas treated the previous year with the higher required PSV value.
• Why did VicRoads not have formal discussions with Industry Associations on such an important issue as changes to the PSV?
• Did the documentation sent to SprayLine by VicRoads clearly indicate the PSV change? It should be noted that SprayLine has indicated that they first become aware of changes to the PSV value when alerted to the changes by suppliers.

VicRoads responded to the latest CMPA letter by organizing a meeting between the Director Regional Services and representatives from the CMPA to discuss the issues raised by the CMPA.

Following the meeting between VicRoads and the CMPA representatives, VicRoads wrote back to the CMPA and stated the following, which is quoted from the Director Regional Services letter.

“I have had the issues associated with the matter investigated and established that nothing improper has occurred. Consequently I do not plan on taking any further action regarding this issue.”

The CMPA again contacted VicRoads and stated that the association was not convinced that the PSV issue has been satisfactorily investigated. In this letter we also included the fact that a letter had come into the CMPA’s hands which inferred that the main reason why the PSV value was increased 52 was “to exclude aggregate from one quarry only in the south and all other quarries would not be affected”.

VicRoads contacted the CMPA and stated “officers from North Eastern Region have advised that when the question of PSV was raised they advised that it had been set for safety reasons.” VicRoads then went on to say, “as advised in my previous letter, VicRoads internal investigation established that nothing improper has occurred.  Unless you can provide any further information, which I would be pleased to consider, there is no further action intended on this matter.”

The CMPA subsequently sent a further letter to VicRoads stating that the association is still not convinced that the PSV issue has been satisfactorily investigated. A copy of the letter from the SprayLine Officer to the VicRoads Officer that was mentioned earlier in this report was also sent to VicRoads on this occasion.

VicRoads responded to the above CMPA letter as follows. “The letter attached to your correspondence was considered during VicRoads internal investigation of this matter. The letter from  …..…(the then Director Regional Services) dated 29 March 2001 clearly states VicRoads position on this matter. Unless you can provide further information on this issue, I don’t propose to take any further action.”

It was clear at this stage that the CMPA was not going to be able to take this issue further without possibly considering a Legal Case against VicRoads by our member for recovery of lost income etc over this issue. The possibility of taking this issue further was discussed with our member but he decided not to take that avenue.

He has made it quite clear that what he really wanted all along was an answer to his question, why had the PSV value been changed? Why was he not notified of this a lot earlier of this change? He is happy that the issue has been pursued as far as it has, that the CMPA has now come of age as an organization that can provide assistance to the small quarry owners operators on such issues.

What has been mentioned above has all been taken from documents and letters used by the CMPA to pursue the PSV issue. The complete and non-abridged documentation is available for all members to pursue and you are quite welcome to do so.  

 In the future we may see a similar issues arise. However, provided CMPA members are prepared to raise theses issues and have some documentation available, the CMPA can at least ask questions with some voice and authority to the relevant people.

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