The Federal Government did not run an open tender process for $423 million worth of contracts for security Manus Island.

Questions are being asked after it was revealed that the Home Affairs Department offered a “limited tender” for two contracts that were both won by the Paladin group.

Fairfax media reports say paladin even received a $109 million increase in its funding despite allegations of deception, lying during the tender process and questionable payments.

Paladin has one entity registered to a beach shack on Kangaroo Island, and another located at a post box in Singapore.

The company is being sued by its former chief executive for breach of contract, and its founder Craig Thrupp is no longer able to enter PNG.

Paladin director Kisokau Powaseu was recently detained in Port Moresby over charges of misappropriating funds and money laundering.

The company itself has been described as “thinly capitalised and inexperienced”, leading many to wonder how it was chosen as apparently the only bidder for the massive contracts.

Home Affairs was sent looking for a new service provider for Manus Island after Broadspectrum (previously Transfield Services) announced it wanted to cease work at the offshore centre in mid-2016.

Despite having at least a year to find a new contractor, it appears that an approach to Paladin was made two months before the Broadspectrum contract ran out.

Home Affairs reportedly handed an advance payment of around $10 million to Paladin, because the company did not have the money to begin the contract.

Rough calculations suggest Paladin is paid about $20.8 million a month by the government to provide security, meaning taxpayers are slugged about $1,600 for each refugee, each day on Manus, not including food and welfare services.

The Paladin contracts should be scrutinised at Senate estimates hearings next week.