Millions of Euro Put at Risk by Failure to Properly Tender for State Projects-PAC Report

The State is still failing to get the best value for tax payers by not putting contracts to the value of millions of euro out to a proper competitive tender process, a report published by the Dáil Public Accounts (PAC) has found.

The report is highly critical of some Government agencies for failing to properly adhere to procurement guidelines which meant that in 2009 alone, €69 million worth of goods and services were awarded by means of non-competitive tendering. The Irish Prison Service continues to be the worst offender; it awarded 154 contracts to the value of €22 million without public competition during the same period.

Committee Chairman, Bernard Allen TD said;
“With the economic downturn, there is a huge competition in the market place for public contracts and great value for money can be achieved. By failing to put contracts out to public tender, the State is not exploiting this value and is wasting taxpayers’ money.

Week after week, this Committee hears from Government agencies who have made mistakes with their procurement and it seems that the public sector is sometimes seen as a soft touch by the providers of these goods and services. This scenario cannot be allowed to persist and the Committee has made a serious of recommendations aimed at tackling this issue and trimming the annual procurement bill.

The State on average spends approximately €16 billion annually in buying goods and services. This report highlights that in 2008 and 2009 almost €150 million worth of contracts was awarded by way of non-competitive procurement. The report also notes that the figure for overall State spending is likely to be far greater as the scope of this report does not include local authorities and wider State Agencies.

The report, as a case study, highlights the procurement activities of the Irish Prison Service. It shows that it awarded contracts worth €97 million to one company on the basis of an initial tender for work valued at only €2.37 million.

Some of the key recommendations contained in the report include;

The twenty-one new staff members due to be assigned to the National Procurement Service1 must have the necessary qualifications and skills.
Only in extreme circumstances should contracts be tendered for without competition and supportive documentation should be provided to verify the necessity.
The accounting officers in Government Departments should establish cross divisional teams within their organisation to fully evaluate procurement proposals.
Each Department needs to clearly outline the amount of goods and services it has procured without a competition. This is not currently the case.
The National Procurement Service should before 31st March each year report to the C&AG and the Dept of Finance on all draw down contracts established for public authorities.

Bernard Allen TD said;
“The Committee acknowledges that the newly established National Procurement Services (NPS) has helped to make some savings but more remains to be done. We find the role of the Department of Finance in this quite frustrating at times. While it draws up procurement guidelines it does nothing to ensure they are enforced and where breaches occur it does little to follow up.

Only last week for example, I took the Department to task over the procurement of a site and award for fit out of offices, both done in an unorthodox manner by FÁS,  however, the Department appears to have been treated this serious matter with indifference. This is simply not good enough.

All those involved in purchasing goods and services on behalf of the taxpayer must do more to make sure that better value is attained.”

The report will be forwarded to the Department of Finance for its consideration.

A full copy of the report is available on www.oireachtas.ie

ENDS

Daniel English
Oireachtas Communications Unit
01 618 4484
087 6949926

1. The National Procurement Service provides a central procurement service for central Government Departments and central Government Services.  This service involves the placing of contracts for a variety of goods, supplies. It was established in 2009.

Committee Membership:
Bernard Allen TD, Fine Gael, (Chairman)
Darragh O'Brien TD, Fianna Fáil, (Vice Chairman)
Michael D'Arcy TD, Fine Gael
Michael McGrath TD, Fianna Fáil
Sean Fleming TD, Fianna Fáil
Brendan Kenneally TD, Fianna Fáil
Niall Collins TD, Fianna Fáil
Olwyn Enright TD, Fine Gael
Pat Rabbitte TD, Labour Party
Jim O'Keeffe TD, Fine Gael
Róisín Shortall TD, Labour Party