Victor Scarcebrook, a senior lawyer in PTV’s governance and legal division, gave evidence that he regretted his failure to pursue a colleague’s concern that project officers Barry Wells and Albert Ooi may have been improperly awarding lucrative contracts to businesses they effectively controlled.

The two officers’ alleged corrupt conduct between 2006 and 2013 is being investigated by the Independent Broad-based Anti-corruption Commission in its first public hearing. The men allegedly awarded $25 million in government contracts to family businesses and personally profited to the tune of about $3 million.

Mr Scarcebrook said he advised Julian Perrin, the officer who alerted him to the family links in a conversation in about 2009, that it was unlikely there was a conflict of interest.

"That was my view and that was the advice that I gave Mr Perrin," he said. "Certainly knowing the circumstances now of that situation, I would have approached this very differently."

Two other department witnesses also gave evidence at the hearing. Sheena Clarke, a junior colleague of Mr Wells and Mr Ooi, was also allegedly tipped off by civil engineer Greg Morrissy in 2008 or 2009 that the officers' sons had won work installing bus stops in regional Victoria, but failed to act.

Ms Clarke told the hearing the conversation with Mr Morrissy took place at a noisy construction site and she never heard him say those words.

The investigation has heard Mr Wells' stepson, Justin Wells, and Mr Ooi's son-in-law, Michael De La Torre, continued to win department contracts for some time, even though the quality of their work was shoddy. Mr Ooi's son Andrew Ooi also worked as a contractor for the department under the false name Andrew Yi.

The investigation will resume on Monday when Mr Wells is due to give evidence.