Tuesday, 5 November 2019

Questions (145)

Mattie McGrath

Question:

145. Deputy Mattie McGrath asked the Minister for Finance the details of contracts of €25,000 or more that have been awarded by his Department or bodies under his aegis that were found to be non-compliant with procurement guidelines in 2017, 2018 and to date in 2019; and if he will make a statement on the matter. [45064/19]

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Written answers (Question to Finance)

The National Public Procurement Policy Framework sets out the procurement procedures to be followed by government departments and state bodies under national and EU rules. In addition, the Department of Finance has its own internal policy and guidance documents to assist staff to comply with all regulations in regard to procurement.

In accordance with Department of Finance Circular 40/02, Departments are required, on an annual basis, to return a report to the Comptroller and Auditor General, in respect of contracts awarded above the €25,000 threshold (exclusive of VAT) that were awarded without a competitive process.

The following table provides all instances of contracts, greater than €25,000, awarded without a competitive process.

Department/Agency

Year(s)

Contractor

Details

Department of Finance

2017-2019

Eurotext

(€28,110 net) This company was engaged for the provision of translation services for the Apple state aid case based on CSSO advice to ensure the necessary quality for such a specialist and technical case. The Department has now entered into a formal agreement with Eurotext to provide translation services on state aid cases only.

For all other foreign translations the Department has completed a tender process using an Office of Government Procurement Framework.

Department of Finance

2018

Individual

(€26,543 net) In 2016, the Government decided to arrange for a review of a certain aspect of Ireland’s tax code by an independent expert to be appointed by the Minister for Finance. It was decided to engage the expert without a competitive tender given his appointment was made pursuant to a Government decision.

There are 17 bodies under the aegis of my Department, 12 of which have not awarded a contract of €25,000 or more that has been found to be non-compliant in any of the given years. These are the Office of the Comptroller and Auditor General, the Credit Review Office, the Credit Union Advisory Committee, the Credit Union Restructuring Board, the Disabled Drivers Medical Board of Appeal, Home Building Finance Ireland, the Investor Compensation Company DAC, the Irish Bank Resolution Corporation, the Irish Financial Services Appeals Tribunal, the Irish Fiscal Advisory Council, the National Treasury Management Agency and the Strategic Banking Corporation of Ireland.

It was not possible for the Central Bank of Ireland to respond to this information request in the time available and therefore I will make arrangements to provide a response in line with Standing Orders.

The remaining 4 bodies have provided the following details:

Body

Details of Contracts of €25,000 or more that have been awarded that were found to be non-compliant with procurement guidelines in the 2017, 2018 and to date in 2019

Financial Services and Pensions Ombudsman

The FSPO ensured that there was an appropriate focus on good practice in procurement and purchasing and that procedures were in place to ensure compliance with all relevant guidelines. The FSPO complied with the guidelines with the exception of the following supply arrangements: 2017Pre-existing contract for ICT support and maintenance was continued pending the completion of an ICT strategy that in turn will involve the procurement of ICT support services - €203,279. One instance with expenditure of €191,972 where temporary agency staff were relied upon to service current demands at a time when the longer term organisational structure was still evolving, and recruitment for established positions had not yet taken place. The use of agency staff had been discontinued prior to year-end. 2018One supply arrangement to the value of €221,284 where a pre-existing contract for ICT support and maintenance was continued pending the completion of an ICT strategy that in turn will involve the procurement of ICT support services. One instance with expenditure of €43,609 where the physical office environment required immediate reconfiguration following changes to the organisationalstructure and the services of the existing general maintenance contractor were employed. 2019One supply arrangement to the value of €145,856 where a pre-existing contract for ICT support and maintenance was continued pending the completion of an ICT strategy that in turn will involve the procurement of ICT support services. One instance with expenditure of €74,949.27 where the physical office environment required immediate reconfiguration following changes to the organisational structure and the services of the existing general maintenance contractor were employed.

National Assets Management Agency (NAMA)

NAMA publishes, on a quarterly basis, details of its awarded contracts over €25k on its website in accordance with the FOI Publication Scheme as issued by the Minister for Public Expenditure and Reform. Please refer to the NAMA website (https://www.nama.ie/freedom-of-information/publication-scheme) which details the relevant contracts covering the dates requested up to end-September 2019. NAMA will publish any remaining contracts for quarter four 2019 in January 2020. I am advised that NAMA has procured its contracts in accordance with its procurement policies, details of these policies and relevant authorised derogations from procurement guidelines are contained in its Annual Report under Statement on Internal Control (Procurement). Details are on www.nama.ie/publications/annual-reports/Please note that the use of derogations under NAMA’s procurement policies does not amount to non-compliant procurement.

Office of the Revenue Commissioners

2017:The Appropriation Account for 2017 states that the report on procurements in 2017 without competitive tendering amounted to €1,676,644. However, none of these were classed as non-compliant with procurement guidelines by the Office of Comptroller and Auditor General. 2018:Details of procurement determined by the Office of Comptroller and Auditor General as non-compliant with procurement guidelines in 2018 are set out below:

€527,000 relating to long standing contracts for telephonist services. Revenue has phased out the use of external telephonists with the outstanding contracts having been ceased with effect from September 30th, 2019.

The following items were all originally tendered for, but the contracts were rolled over pending new tendering processes:

€2.141 million relating to security contracts. The delay in running mini competitions under a new Office of Government Procurement (OGP) framework arose due to the time required to assess requirements on a national basis across multiple locations. New contracts were put in place in December 2018.

€1.037 million relating to warehousing contracts. A tender competition was held in 2018 by the OGP for a contract to manage the State Warehouse. The OGP tendering process was unsuccessful in appointing a supplier and a new tender competition, run by Revenue, was successfully concluded and a new contract was in place on May 1st, 2019.

€765,000 relating to various services including, inter alia, mobile telephony and fuel cards. Revenue is liaising with OGP with a view to utilising new and existing OGP frameworks and conducting procurement processes where necessary.

2019:

The following relate to expenditure in 2019 for rollover contracts identified by the Office of Comptroller and Auditor General in the 2018 report as non-compliant with procurement guidelines. These are the only contracts that can be currently identified as non-compliant for 2019. The definitive 2019 position can only be determined in the New Year following review by the Office of Comptroller and Auditor General.

€207K relates to telephonist services. The contracts were terminated on September 30th.

€285K relates to the State Warehouse contracted which was replaced on May 1st.

€649K relates to various services including mobile telephony and fuel cards running on old contracts (€584k and €65k respectively).

Tax Appeals Commission

2017: Nil 2018: A contract to the value of €33,000 for software and hardware for a voice recognition and dictation system was non-compliant because it was entered into without there first being a competitive process; this took place because there was no comparable product in the market of which the Tax Appeals Commission had previous experience and practical knowledge. The Commission has provided details of this exceptional contract in the annual return in respect of Circular 40/2002 to the Office of the Comptroller and Auditor General and the Department of Public Expenditure and Reform. 2019: Nil