The report before the committee presents the results of an examination carried out by my staff of the arrangements for the purchasing of tyres by the Garda Síochána in the three year period, 1998 to 2000. The examination took place in the aftermath of allegations in a newspaper report that members of the transport section of the Garda Síochána had received all-expenses-paid trips abroad from the main supplier of tyres to the force, Advance Pitstop. There were also subsequent allegations by a former employee of that company that the Garda Síochána had been overcharged for tyres and extras in that period. The Minister for Justice, Equality and Law Reform was so concerned about the allegations that investigations by the Department's internal audit unit and by Garda management were instigated.
I commenced an in-depth examination of the arrangements for the purchasing of tyres from the point of view of both financial control and value for money, having discussed the matter with the accounting officer, the Secretary General of the Department. In considering my report it would be useful to briefly refer to the way in which tyres historically were supplied to the Garda. Prior to 1992 all tyres for the Garda fleet were purchased directly from the manufacturers and were delivered to the transport section workshops in the Phoenix Park. From there tyres were distributed as required to Garda district headquarters throughout the country. Tyres for vehicles based in Dublin districts and national units were fitted in the workshops, while outside Dublin the fitting of tyres was arranged locally. It was a cumbersome and costly exercise, often resulting in vehicles being out of service while awaiting replacement tyres. In an effort to tackle this problem, the tyre suppliers were asked in early 1992 to deliver tyres direct to all district headquarters outside Dublin. It soon became clear that this revised arrangement was not overcoming the problems associated with the previous practice.
A tender competition was organised for the supply of tyres to Departments and offices, including the Garda Síochána in 1993 by the Government Supplies Agency. Four companies were approved by the GSA as authorised tyre suppliers, three tyre manufacturers and Advance Pitstop. That company had already been in negotiation with the Garda Síochána about provision of a supply and fit service for Garda vehicles. Based on the 1993 tender prices, the Garda Síochána concluded that the Advance Pitstop proposals offered an opportunity of getting better service with the prospect of cost savings. In February 1994 the Garda entered into a pilot arrangement with the company in which selected Garda districts purchased their tyres from local Advance Pitstop depots and had them fitted there. In July 1994 that arrangement was extended to almost all districts and units.
In 1997 the Government Supplies Agency organised a fresh tender competition for the supply of tyres to central government agencies. The competition was designed to select companies for inclusion on a list of suppliers from which agencies, including the Garda Síochána, would purchase tyres as required. In the event all seven companies who tendered were approved as suppliers. The prices to be paid for tyres were the net prices based on discount rates and price lists submitted with the tender documents. Prior notification of the dates of any price variation was to be given to the GSA and the purchasing agencies, together with revised supplier price lists.
The 1997 competition did not change the pattern of purchase of tyres by the Garda. Advance Pitstop had been the main supplier of tyres since 1994 and as that company was again on the approved list in 1997 the existing supply and fit arrangement continued. In June 1998 a comparison of suppliers' prices, which showed Advance Pitstop as the cheapest supplier across a range of tyres, was prepared within the transport section. Our review showed that many of the prices attributed to Advance Pitstop in the price comparison document were substantially lower than those actually being paid to the company at the time and were also lower than the tender prices submitted by the company. In that sense they were presenting a misleading picture of comparative costs. If the correct tender prices had been used in the comparison, other suppliers would have come out cheaper for most of the tyre types examined.
The arrangement with Advance Pitstop continued without review until the media revelations in February 2001. During the three years 1998 to 2000 the Garda Síochána spent at least £2.4 million on the supply and fitting of tyres and extras, of which £2.1 million related to purchases from Advance Pitstop. No price increases were notified by the company in the period. By applying the tender prices to the purchases in that period, the examination showed that the Garda Síochána had overpaid an estimated £180,000 for tyres and £28,000 for extras, such as valves. After the media reports, the company, at a meeting with the Garda in May 2001, issued credit notes to a net value of £102,000, representing the company's calculation of the correction of discount deviations from actual tender terms. It is my understanding that the Garda considered that any decision to pursue the company for the balance rests with the Government Supplies Agency as the contracting authority. There was almost certainly a further loss of economy because other, cheaper, suppliers of tyres had not been used. A proper evaluation of the prices offered would have shown this up. In this connection, just recently other supply and fit tyre providers have been awarded contracts for 724 Garda vehicles.
The comparison of the prices paid by the Garda Síochána with those paid by the Defence Forces for the same types of tyres under the tender arrangement is instructive. We were able to identify a number of tyre types bought by both the Garda and the Defence Forces at around the same dates in 2000. In almost all cases examined the prices the Defence Forces paid for individual tyre types were significantly lower than those paid by the Garda. This was a comparison of tyre prices only, so the differential is not due to extra fitting or balancing charges paid by the Garda.
The failure to note that invoices were being presented and paid at prices higher than the tender prices reflects badly on the system of financial control exercised by the Garda Síochána in this area. District officers with responsibility for certifying invoices for payment did not have access to information about the prices they should expect to pay, the specification of tyres which should be fitted to vehicles in their charge or any policy guidance on the provision of extras. In these circumstances it was virtually impossible for those officers to verify that the amount invoiced was in order. Even where information was available, such as in the transport section, the general practice appears to have been not to check the amount invoiced against the approved prices. Apart from the inadequacy of the control system and its financial implications, the report also analysed tyre usage on Garda vehicles to establish if it was reasonable. The conclusion reached was that the average mileage per set of tyres was too low.
Following reservations expressed by the Garda Síochána about this finding we have re-examined the issue in considerable detail and have revised our figures upwards to about 16,000 miles per tyre or an average of 20,000 miles per set. In the light of the revised figures, tyre consumption for the fleet can be regarded as acceptable and I want to put that clearly on the record. The Garda have pointed out that this performance compares well with that achieved by police forces in the UK. The Garda have also inquired into all of the vehicles that were supplied with the highest number of tyres in the period 1998 to 2000 and are generally satisfied that the tyre usage in those cases was justified. They have since taken issue with a few other points in the report, in particular the fitting of new valves when tyres are being replaced and I am happy to accept the point they make. I partly accept their views on the level of consumption of tyre extras. In this regard my office received a letter from Garda management at 1 p.m. yesterday containing these reservations. I will respond in detail to the points made in the letter in due course.
These are the main points at issue. I am sure Garda management or the accounting officer will outline any others. There are other issues recorded in the report, such as an unplanned but significant shift in the brand of tyres bought and the unsuitability of the tender competition. I have talked for a little longer than usual already and it might be more convenient to deal with these and other points in the course of the discussion. In conclusion, the examination had to be carried out in a way that did not cut across other investigations, including a criminal investigation, and this factor impacted on the range of personnel we were able to interview. I regret the inaccuracies in the report that I referred to but I stress to the committee that they do not invalidate the findings of the report when set against the objectives of the examination. There was a proven loss of economy in the purchase of tyres, the tendering and procurement procedures did not accord with best practice and there was poor control over payment for tyres.