A complaint has been sent to the NSW Ombudsman about City of Newcastle's tender process for the recently approved $25million waste processing facility at Summerhill.
The city's four independent councillors who voted against the project have also lodged a separate complaint with the Minister for Local Government.
But concerns were immediately raised about the project's business case and tender process.
Andreas Pichler, whose consultancy partnered with one of the unsuccessful tenderers Kingston Building Australia, confirmed he had requested the Ombudsman investigate the council's handling of the matter.
"We escalated this matter because we formed the view that the administrative conduct of City of Newcastle for this tender was neither transparent nor in compliance with public tendering procedures and City of Newcastle did not act fairly, impartially and open ended in the way the tender assessment was conducted, in particular reference to our proposal," he said.
"Based on the information, which we received during our tender debriefing and the information now disclosed through the media, we cannot find plausible reasons, which would justify the 'depreciation' of our fully enclosed facility option by around $7million, which is 50 per cent of our submitted tender price.
Given that the council apparently rejects the idea of an 'external, independent review' we have no other option but to launch an investigation."
A City of Newcastle spokesman said the council had not been formally advised of the complaint and was confident its tender process was sound.
"We understand this sub-contractor may be disappointed in missing out on building the region's largest organics recycling facility," he said.
"The calling of tenders was in accordance with the requirements of section 55 of the Local Government Act. "The process followed was in accordance with Part 7 of the Local Government (General) Regulation. The tender was accepted in accordance with clause 178 of the Regulations.
"Should an enquiry by the Ombudsman be made, we would be confident in demonstrating our compliance with the relevant legislation. An independent third-party technical review of tenders was carried out to ensure the legitimacy of the evaluation process."
In their letter to Local Government Minister Shelly Hancock councillors Kath Elliott, John Church, Allan Robinson and Andrea Rufo cited concerns about a lack of consultation, the project's viability and business case and the way tender process was conducted.
"We felt unable to make a considered and well informed decision and represent the best interests of ratepayers and the local community as required under the Act," the councillors wrote.
"To us it seems like the decision was railroaded through by the majority Labor block without caring about the needs of the ratepayer."
The council estimates the project will save ratepayers $24 million in operational costs and $32.5 million in state government levies.
