Ministers Pakula and Neville say Health Department, not their own, was in charge of hotels

Ms Neville said Emergency Management Commissioner Andrew Crisp first mentioned private security to her in a meeting about the hotel quarantine program.

Ms Neville, Mr Crisp and Chief Commissioner Graham Ashton had a regular meeting scheduled for 2pm on March 27, just after National Cabinet decided to quarantine international arrivals.

Ms Neville said she told them about the hotel quarantine and that the Department of Jobs would be standing it up, but "they were a bit ahead of me in terms of the level of knowledge that they had".

She said she remembers Mr Crisp first mentioned private security while Mr Ashton talk about the Australian Defence Force.

"I believe that private security was raised by Commissioner Crisp, I'm pretty confident the ADF issues were raised by Mr Ashton," she said.

Mr Crisp doesn't remember what was spoken about, but told the inquiry he doesn't think it was him that first talked about private security.

Ms Neville said she took the mention of private security by Commissioner Crisp that "a decision had been made at some point that private security was the front line" before their meeting.

Ms Neville said it was provided to her as a bit of factual information, and no decisions were made in that meeting.

"It was clear to me that both DJPR (Department of Jobs, Precincts and Regions) were standing this up and it was clear to me and I think to both commissioners that a decision had already been taken about the front line of enforcement at the hotels," she said.

Earlier, Mr Pakula said it was normal for the government to consult unions ahead of awarding contracts to ensure companies pay decent wages.

Two of the contracted security firms, Wilson Security and MSS Security, were preferred by Trades Hall.

Unified Security was not, yet it became the main contractor for the quarantine program and was offered $28.6 million for work across 13 Melbourne hotels.

One senior Jobs Department staff member told a colleague they should tell Trades Hall that Unified was a "dream" to work with and employed "loads of Jobs Victoria clients", a government program designed to help the unemployed find work, while Wilson had been difficult.

But within the first few days of the hotel program, Unified was already subcontracting its work.

Counsel assisting the inquiry Rachel Ellyard asked Mr Pakula to respond to the evidence.

"It's difficult for me to comment on it, Ms Ellyard, I can't speak as to why the representations that appear to have been made to the Hall were not followed through for want of a better description," Mr Pakula responded.

"I really don't know."

Mr Pakula said in that "very hectic period" at the end of March, in which authorities had 36 hours to stand up hotel quarantine, "engagements were entered into" in which the primary focus was to find companies that could "effectively stand up a workforce in a short period of time".

That was the rationale, he said, for the employment of Unified Security.

Jobs Department staff have been forced to admit in the inquiry that Wilson Security was not difficult.

Mr Pakula also told the inquiry he had not become aware of the concerns his departmental staff had about the hotel quarantine program until after an inquiry into it was established.

Mr Pakula's departmental staff, who were given the task of finding private security firms for hotel quarantine, were wary on day one of the crisis of dealing with a 'cowboy industry', saying they didn't want 'rogue guards' prowling the corridors of hotels.

Mr Pakula said he has since found out about concerns around whether or not police should have had a presence at the hotels and whether returned travellers detained in their rooms should have been allowed outside for some fresh air.

The $3 million inquiry, led by former judge Jennifer Coate, is investigating how virus outbreaks among staff and private security guards at two Melbourne quarantine hotels – the Rydges on Swanston and Stamford Plaza – seeded Victoria's catastrophic second coronavirus wave.

Mr Pakula has said that to the best of his recollection, he first learned about the hotel quarantine program on the afternoon of March 27 in a phone call from Department of Jobs, Precincts and Regions Secretary Simon Phemister.

National Cabinet made the decision to quarantine international arrivals to Australia that day and it was announced by Prime Minister Scott Morrison and Premier Daniel Andrews.

The Minister said he understood from his phone call with Mr Phemister that his department would be in charge of the hotel quarantine program.

However, control quickly shifted to the Department of Health and Human Services.

Mr Pakula was represented on Wednesday by three lawyers, including David Collins, QC.

Police and Emergency Services Minister Lisa Neville has legal representation from top silk Sue McNicol, QC.