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Taoiseach's newspapers and embassy catering: hundreds of State contracts awarded outside official guidelines

Millions has been spent on services procured on almost 350 occasions over a three-year period.

Image: Lichtmeister via Shutterstock

FOREIGN SECURITY, GOVERNMENT reviews and the supply of newspapers to a government department are among the hundreds of services procured by the public service outside official guidelines in recent years.

Responses to a number of Parliamentary Questions in the Dáil over several months this year reveal how state bodies and government departments have paid millions to private firms for services obtained outside public procurement guidelines.

The responses, received by Independent TD Mattie McGrath, reveal the extent to which services have been procured outside the guidelines between 2017 and 2019.

Under guidelines set out by the Office of Government Procurement (OGP), government departments and state bodies are required to inform the Comptroller and Auditor General when services worth over €25,000 are procured without a competitive process.

The guidelines exist to ensure that the €8.5 billion spent by the State on goods and services every year achieves value for money and a sustainable delivery of services.

Such contracts are usually awarded after a competitive tender process, but answers received by McGrath show that this did not happen on hundreds of occasions between 2017 and 2019.

OGP guidelines state that services may be procured without such a process for legitimate reasons, but in many cases, ministers and departments did not explain why contracts were awarded outside a tendering process.

McGrath told TheJournal.ie that the responses he received to his questions were evidence that the state’s procurement process is “dysfunctional” and “open to abuse”.

“There also appears to be an endemic and casual disregard for how public money is spent,” he said.

“The lack of competitive tendering, even for contracts worth several millions, simply beggars belief. The replies leave the government’s already-tenuous reputation for prudent fiscal management in tatters.”

Public procurement guidelines

Public procurement is the process by which the government and state bodies purchase works, goods or services from the private sector.

The process applies for a wide range of goods and services, whether they are routine or bigger contracts for infrastructural projects.

Since 2014, the Office for Government Procurement has been responsible for sourcing goods and services on behalf of the public service.

After it was founded, the office produced guidelines to promote best practice and consistency in the application of the public procurement rules, which are expected to be followed by departments and state bodies when contracts are being awarded.

One of the basic principles of public procurement is to undergo a competitive tendering process when awarding contracts.

However, this may be circumvented in exceptional circumstances, such as in an emergency or when a company has carried out a very specific service for the government previously.

One department told TheJournal.ie that the list of reasons for such circumstances is not exhaustive, adding that there are always cases where contracts are awarded without a competitive process.

Services procured

According to responses received by McGrath, all but one government department – the Department of Defence – procured at least one service outside the guidelines set out by the OGP.

Between 2017 and 2019, services procured outside of a formal tendering process included:

  • Advice to the Department of Communications, Climate Action and Change about the National Broadband Plan at a cost of €14.6m;
  • Work by the Expert Technical Group on the former Mother and Baby Home in Tuam, at a cost of €123,000;
  • Translation services for the Department of Finance relating to the ‘Apple state aid’ case, at a cost of €28,000;
  • The provision of health insurance for overseas staff at the Department of Foreign Affairs and Trade, at a cost of €1.5m;
  • Catering services at the Irish consulate in New York, which cost €124,000;
  • The provision of security to a number of foreign embassies, costing €574,000;
  • The supply of newspapers to the Department of An Taoiseach for €56,000
  • An “urgent” requirement for printing at the Department of Employment Affairs and Social Protection, which cost €262,000.

Of the 16 ministers whose departments awarded contracts outside of OGP guidelines, ten told McGrath which services they provided and at what cost.

Further details were provided by some departments contacted by TheJournal.ie, although many departments did not disclose which companies were contracted to carry out certain services outside OGP guidlines.

Just four ministers named the companies or individuals who were awarded contracts by their department, although most described the services which were provided.

Taoiseach’s newspaper supplies

11 services worth more than €1.1m in total were awarded by the Department of An Taoiseach between 2017 and 2018, although no details were given for 2019.

Services procured included €99k on a legal secretary for the Moriarty Tribunal’s legal team, because they were contracted when the Tribunal was set up in 1997.

€40k was also spent in 2018 on a stenographer for the Cooke Commission, which investigated NAMA’s Project Eagle, because they too were contracted when the commission was set up in 2017. 

Meanwhile, over €200k was paid to telephonists operating the department’s switch, because it was believed the providers represented good value for money.

And in 2017, €56k was spent on a provider for the supply of newspapers because a contract rolled over before a new tender request was issued.

A spokesperson for the department told TheJournal.ie that it would not comment on individual contracts, but said the occasional awarding of contracts outside OGP guidelines was allowed under procurement rules.

Telephony services worth €394k were also procured outside OGP guidelines at the Department of Health, where four contracts were awarded in 2017 and 2018.

€59k was spent on mobile and telephony services in 2017, after a contract was extended after the OGP advised continuing with the supplier until a new framework was put in place the following year.

And the following year, €74k was paid on mobile and telephony services after a contract was extended because of a delay following the department’s move to Miesian Plaza.

The department also spent €229k on office maintenance in 2017, after tendering for a new contract was deferred ahead of the department’s relocation.

A spokesperson for the Department of Health did not comment when contacted by TheJournal.ie.

Embassy security

Responses to McGrath also revealed that services obtained outside of OGP guidelines were not just restricted to those which were procured in Ireland.

According to a reply from Minister for Foreign Affairs Simon Coveney, more than two dozen services worth more than €5.4m were procured by his department between 2017 and 2018.

They included around €1.5m spent on health insurance for overseas staff, after a contract was extended in both 2017 and 2018 pending the issuing of a new tender for the service.

€294k was also paid to a company who provided mobile services, and €389k for security services for Ireland’s Permanent Representation to the EU in Brussels, after contracts for those services were extended.

€77k was spent on cleaning services for the same Brussels office in 2017, while €59k was also spent on cleaning services at the Irish embassy in the Belgian capital the following year.

Meanwhile, security services worth €285k for Irish embassies in Mexico, Indonesia, Brazil, South Africa and India were also procured outside guidelines in 2017 and 2018, generally due to an extension of the contract pending a new tender process.

And another €124k was paid for catering services for the Irish consulate in New York over the two-year period, although no reason was given for this in either year.

The Department also spent significantly on one service in Ireland: €500k was spent on the supply of passport application forms in 2017 because a previous contract was also extended pending the issuing of a new tender.

National Broadband Plan

Significant sums were also spent by other departments on services procured domestically.

A number of contracts awarded by the Department of Communications, Climate Action and Environment – which spent €14.6m on services procured outside OGP guidelines – related to the National Broadband Plan between 2018 and 2019

These included financial and procurement advice (€1.9m), technical advice (€1.5m), legal advice (€1.7m), economic strategy (€350k), and tax and VAT advice (€40k) in relation to project.

The department justified awarding the contracts outside guidelines by saying that the service providers possessed a “special advantage” because they had exclusively carried out earlier research for the project on behalf of the department.

The department also awarded several contracts relating to climate and energy which fell outside OGP guidelines.

€5.2m was spent on management of the National Digital Research Centre in 2018, because the provider was also deemed to possess a special advantage due to earlier research exclusively carried out on behalf of the department.

€100k was also spent on an investigation the mine collapse at the Gyproc gypsum mine in Co Monaghan and €600k was spent on repairs at the Avoca mine, both outside guidelines because of the urgency with which the services had to be carried out.

The department also spent €350k on modelling the implications of the EU’s proposed 2030 Climate and Energy Framework because the service provider has exclusive data relating to the provision of the service.

€100k was spent on examining the technical feasibilty of a North-South interconnector because the provider had carried out exclusive research for the department.

And €200k was spent on legal advice regarding the Corrib gas field in 2017 and 2018, with the department citing the urgency required to carry out the service on one occasion and a “special advantage” due to previous research in another.

Apple state aid case

Environmental issues were not just confined to the Department of Communications, Climate Action and Change.

Among the 85 services worth €9.6m procured by the Department of Agriculture, Food and the Marine were two contracts worth €74k for the emergency removal of waste water in a Fishery Harbour Centre in Howth in north Dublin.

The Department also spent €108k on local purchases of hardware supplies the same year, as well as €3.2m on 37 contracts relating to the procurement of laboratory supplies, maintenance and servicing of laboratory instruments, and laboratory testing.

However, no reasons were provided by the department to justify the reasons why these contracts were awarded outside procurement guidelines.

Legal services were also procured outside guidelines by the Department of Finance between 2017 and 2019.

The department paid €28k to Eurotext on translation services for the Apple state aid case over the three-year period. A spokesperson said the company had provided a specialist service since the start of the case, and that no competitive process took place as a result.

€26k was also spent by the department to economist Seamus Coffey for a review of  Ireland’s corporation tax code in 2018.

A spokesperson said that Coffey was asked to carry out the review without a competitive tender because his appointment was made following a Government decision.

Tuam Mother and Baby Home

A review was also procured by the Department of Children and Youth Affairs, which obtained six services worth more than €1m in 2017 and 2018 outside OGP guidelines.

In 2018, €35k was spent on the appointment of an independent reviewer to investigate whether any evidence of illegal registrations could be obtained from records of former adoption agencies held by Tusla or the Adoption Authority.

The department also paid €123k to the Expert Technical Group to identify the options and appropriate courses of action available to the Government at the site of the former Mother and Baby Home in Tuam, Co Galway.

However, the department’s highest spend came in 2017, when it awarded a €775k contract to TRK Construction for the replacement of security doors at Oberstown Detention Centre.

No reasons were provided by the department to explain why these contracts were awarded outside procurement guidelines.

Security contracts were also awarded outside guidelines by the Department of Housing, which spent €1.2m on 13 non-compliant contracts between 2017 and 2018.

It paid €288k to an unnamed company as an emergency measure over the two-year period, to provide security relating to the erection of hoarding while refurbishment works were carried out at the Custom House.

The department also spent €85k on catering and €230k on cleaning services which were procured without a formal process the same year, because it was waiting for a formal process to be implemented.

A spokesperson told TheJournal.ie that the exceptions generally occurred for reasons of urgency, or where an existing contract was rolled over, pending the completion of a new procurement process.

‘Urgent’ printing requirements

Other departments spent similar sums on “emergency” measures over the three-year period.

Among the 25 services worth €4.6m procured under the remit of the Department of Employment Affairs and Social Protection, €262k was paid to printing company Colorman to facilitate “urgent Department needs”.

The department also paid €790k on translation services, and another €456k to Vodafone following the extension of contracts, although no details of which services were procured from these companies was provided.

In 2018, the Department of Transport spent €60k on a review into the oversight of Search and Rescue (SAR) operations, arising from a safety recommendation by the Air Accident Investigation Unit – its only procurement outside OGP guidelines.

The Department of Public Expenditure and Reform also had a low number of procurements outside OGP guidelines, doing so just twice in three years.

Minister Paschal Donohoe did not give details about how much was spent or which companies were contracted, but said the services included the modification of an IT system at short notice to safeguard EU funding.

IT maintenance and cleaning services were also procured by the Public Appointments Service outside OGP guidelines, as was a contract to supply the State Laboratory with gases in 2017 and 2018, following a delay in establishing a new framework agreement.

No details given

A number of departments also failed to give details of which services were procured outside OGP guidelines, or which companies were contracted, although they did provide figures and occasionally reasons why procurements were non-compliant.

Contracts with a value of more than €13.1m were procured on 74 occasions by the Department of Justice and Equality, all without a competitive process.

In 2017, fifteen of these contracts worth €2.25m were awarded to sole suppliers for Forensic Science Ireland and ICT-related expenditure, while eighteen more worth €3.76m awarded in 2018 because they were considered to be non-competitive.

The Department of Culture, Heritage and the Gaeltacht awarded nine contracts, worth a total of €1.45m, outside OGP guidelines between 2017 and 2018.

These included a contract for the provision of services and turf supplies because there was only one organisation deemed to be able to provide this service, while another contract related to Culture Night publicity and events was awarded for the same reason.

The Department of Education and Skills awarded 21 contracts worth €4.64 between 2017 and 2018.

The awards included a €1.47m emergency contract to ensure compliance with fire safety regulations in 55 schools, after structural defects were identified at a number of buildings last year.

And the Department of Business, Enterprise and Innovation awarded 12 contracts worth €724k between 2017 and 2018, although no details of individual values or companies were provided.

In total, 348 contracts were awarded by government departments between 2017 and 2019. All departments were contacted for comment by TheJournal.ie.

A spokesperson for the Office of the Comptroller and Auditor General said that it was unable to check all instances of contract compliance by the time of publication, but said that some contracts may be in compliance with procurement rules.

However, the office added that where there is a significant failure by a department to identify and report on non-competitive procurement, the matter is raised with the accounting office.

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