Agencies fail to put €75m in projects out to tender

OVER €75 million was paid for goods and services last year under contracts that were not put out to competitive tender.

At least 469 contracts with an average value of almost €160,000 were not put out to tender, despite rules saying that any contract worth over €25,000 should be open to competition unless there are exceptional circumstances.

The true numbers are believed to be higher, as the C&AG & found 21 non-competitive contracts with a total value of €4.4m that had not been declared by various departments.

In addition, the Department of Social Protection did not highlight a €58m contract it gave An Post to act as an agency for cashing welfare payments. The contract did not go out to tender.

Of the 34 government departments and offices audited, the C&AG found that seven did not have a procedure in place to have non-competitive contracts independently reviewed prior to their award, six did not keep a register of such contracts and three had registers that were out of date.

One example is the National Library of Ireland, which awarded a contract to a researcher to help with an exhibition and book on the library’s “treasures”. The contract was awarded a day after the researcher submitted their proposal, it was evaluated by only one member of staff and there was no documentary evidence of how it was evaluated.

Three other proposals were submitted by other researchers but there was no evidence they were evaluated. The total cost of producing the book and ancillary costs was €131,000, but it had to be pulled from the shelves shortly after it went on public sale in April 2009 because of “errors and other defects”.

Disciplinary action was taken against two members of staff as a result and the library told the C&AG it had since tightened its procurement procedures.

The Department of Defence and the Irish Prison Service claimed the most number of exceptions to normal tender requirements, spending €15.1m on 62 contracts and €14m on 124 contracts respectively.

Exceptional circumstances usually arise when goods or services are required urgently or where there is only one known suitable supplier.

In one example, defence spent €6.4m repatriating personnel and equipment from Chad after concluding there was only one service provider in Chad that could do the job.

The C&AG noted that despite the establishment of the National Procurement Service, aimed at streamlining procurement across government departments and offices, spending on non-competitive contracts increased by over €6m from 2009 to 2010.

He said there was a need for improved monitoring, review, reporting and explanation of contracts that are not put out to tender.