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Analysis: The Stormont tender ruling

Last week saw yet another court ruling that public bodies requesting tenders are simply not getting it right.

This means wasted public money and a lack of work for contractors at a time when it is really needed.

Both the common law and EU legislation put certain obligations on public bodies choosing contractors. Should a public body breach those obligations a contractor which loses out can stop the works proceeding and/or claim for the profit he could have made on the project.

This has lead to delays in getting much needed projects started including hospitals and schools. It has also meant that the public has had to pay one contractor to carry out the work and another for not doing it.

Despite the implications of poor practice, public bodies do not appear to be learning lessons, as can be seen from last Thursday’s decision in the case of McLaughlin & Harvey Limited versus Department of Finance and Personnel. This matter was dealt with in the High Court of Northern Ireland. McLaughlin & Harvey, the Plaintiff, is a construction company that was not allowed onto a list of five contractors who would be able to tender for £800m worth of work.

McLaughlin & Harvey felt that the tender process adopted by the Central Procurement Directorate (CPD), which is part of the defendant, fell foul of the applicable rules - and the court agreed. CPD, which is the primary Centre of Procurement Expertise (CoPE) in Northern Ireland, had a duty to tell all tenderers what criteria they would take into account in assessing the contractor’s submissions and the relative importance or weighting of each. They did not do this.

CPD was established in 2002 to provide a centralised, professional procurement service to the Northern Irish public sector. It was to develop and establish the procurement policy framework and best practice for the public sector in Northern Ireland and in doing so help the public sector deliver better public services. Whilst the work of CPD has been worthwhile and beneficial in many respects, the number of successful challenges to procurement processes in Northern Ireland recently point to a failure to meet these worthy aims.

The three men, 13 tenders, two months and no notes conundrum that came to light during the court proceedings serves to underpin this observation.

CPD assessed the tenders in question using a team of highly placed officials, who worked solidly on the assessments for two months but yet failed to produce a single piece of paper between them, to show the court what they were doing. They also decided the marking scheme after the tenders were received. Although nothing was found to be suspicious in this case, the judge did highlight the risk that such practices allow for corruption. This is especially so when price only accounted for 30 per cent of the marks.

The court will shortly hear submissions on how McLaughlin & Harvey are to be compensated. They may receive damages in the millions. How such an unnecessary expense to the public purse is allowed to happen must be questioned.

Edward Quigg is a director of Quigg Golden. He is leading a series of free workshops on procurement issues in Dublin, London and Belfast in this autumn. edward@quigggolden.com