Cambridgeshire County Council has twice violated public procurement law, including one in connection with a winter sandblasting contract, external audit finds
The two cases identified by BDO auditors concerned a winter sandblasting contract awarded in 2015 and recourse to consultancy services in 2016.
In the audit report, published before the audit and accounts committee of the departmental council tomorrow (November 25), he said: contracts that we have examined.
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“The legal opinion received confirms that there was a breach of EU public procurement law with respect to two of the contracts we reviewed, which left the board open to challenge judicial.”
In the first case identified by the audit, the winter sandblasting contract, the report explained that it was understood that four potential suppliers had been approached by the county council and that no formal tendering process had been followed, in violation of the board’s own rules of contractual procedure.
The report says two vendors were unable to provide quotes and the remaining two vendors provided quotes for how much it would cost per year, for a seven-year contract.
Econ, which ultimately won the contract, cited Â£ 809,770 per year, and the second supplier, not named in the report, cited Â£ 909,177 per year.
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The audit report indicated that based on the figures cited, the total cost of the seven-year contract would be between Â£ 5.668million and Â£ 6.364million.
A document was then drafted by agents detailing the quotes and the approach taken to obtaining them, which recommended that the contract be awarded to Econ.
The report was reviewed at a meeting in March 2015, where no concerns were reportedly raised, and in May 2015, officers wrote to Econ to inform the company that they would be offered the contract. . The contract was signed in July, with services starting in November 2015.
The audit report identified that this process did not follow the County Council’s own contractual procedural rules and that due to the overall cost it exceeded at the time the EU threshold above which the right Community procurement policy applied.
The report said that because of this, the contract should have been published in the European Union’s Open Journal and “put on competition”.
The audit report goes on to explain that the council’s contractual rules of procedure require that an EU tender receive at least five responses or that an exemption be obtained, but this was not the case. in this case.
Further, the report states that when the term of a contract exceeds four years, board rules require this to be agreed to by the oversight manager, but states that there is no evidence available to show that it does. has occurred.
The report adds: “Failure to comply with EU public procurement law in force at the time of contract award, contract award expenses awarded to Econ result from breaches of public procurement law . “
The second case identified by the auditors concerned the award of consulting services contracts to V4 Services Ltd
The report said: ‘Our legal advisers pointed out that the payments made to V4 Services Ltd between July 1, 2016 and July 31, 2016 – for a total of Â£ 92,857 – were in fact an amendment to the contract with the company which took over. end of June 30, 2016, in violation of the law on public procurement.
âThe board should have estimated the value of the change, combined it with the value of the previous contract, and started a new procurement process.
âNot to do so was illegal under public procurement law. “
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In the report, he explains that the auditors considered whether cases of contracts awarded “in violation of public procurement law” would justify the auditor asking the High Court for a declaration form to have the material declared contrary to it. the law.
However, in this case, the auditor concluded that this would constitute a âdisproportionate audit responseâ after stating that the costs that would be incurred to do so were taken into account, as well as âthe initial legal opinion on the force of opposing arguments â, and also from the fact that no challenge to the Econ contract has been made since it was awarded, and that the contract has only one year to run.
Other documents released ahead of the committee meeting include a report detailing the county council’s response to the external audit findings.
In the report, the county council said it recognized that the problems identified by auditors regarding the winter sandblasting contract were “serious shortcomings.”
Regarding the consultancy services contract, the county council admits that it “made a mistake” by not launching a new procurement process.
The report goes on to detail the general improvements made by the County Council since the cases highlighted by the audit occurred, as well as individual responses to recommendations made by BDO.
These improvements include putting in place new systems, for example to complete, maintain and monitor waivers and exemptions.
The County Council also highlights the joint supply board now in place with Peterborough City Council, which is chaired by Section 151 officers from County Council and City Council.
The report also says the county council will “ensure” that all contract managers receive training on the requirements of public procurement regulations.
The advisers are due to receive the reports and discuss them tomorrow.