‘Shambolic’ security contract procurement

Former local authority Derry City Council's sign outside its headquarters on Strand Road.
Former local authority Derry City Council's sign outside its headquarters on Strand Road.

Derry & Strabane Council has been urged to take urgent action after a catalogue of absent documentation and “significant weaknesses” around the former Derry City Council’s “shambolic” process for awarding security contracts was uncovered.

The authors of an external review have now recommended that an outside body be brought in “in the short term at least” to oversee “any significant procurement exercises to help demonstrate objectivity”.

The old Derry City Council's logo.

The old Derry City Council's logo.

The findings of the review, conducted by On Board Training and Consultancy Ltd, were presented to the Council’s Assurance, Audit & Risk Committee at the Guildhall on Thursday.

The external review was sought by new supercouncil Chief Executive John Kelpie as a result of complaints received by the Northern Ireland Audit Office over stewarding/ security contracts awarded by the now disbanded Derry City Council.

The review began in late August 2015, and was ordered after two internal investigations were carried out concerning the allegations raised by two unnamed complainants.

The main allegations included that Derry City Council had awarded several contracts to a company- identified in the report as ‘Company A’, under Single Tender Actions, without competition.

There were a series of further allegations regarding alleged conflicts of interest and the way in which contracts were issued, while the company told the committee they found no hard evidence of any fraud.

One of the key conclusions of the new external probe is that the two former internal reports- a Systems Report and Investigation Report- “were comprehensive” but added:

“The investigation was, however, seriously hindered by the absence of supporting documentation on file in respect of the procurement exercises which were the subject of the complaints.

“The scale of the weaknesses highlighted in the Systems Report is significant by any standard. These included weak guidance for those involved in procurements, lack of standard documentation, no central control or oversight of procurement and lax supervision, all of which exposed Derry City Council to significant risk over many years.”

On Board said that while it found “no evidence to substantiate the allegations relating to tender fixing, the weaknesses in Derry City Council’s procurement arrangements and in managing conflicts of interest made it much harder for it to respond quickly and conclusively to rebut these allegations.”

The new report also raised concerns over how decisions of awarding contracts were reached, particularly in relation to the year 2012-13, when Company A was chosen over a much less expensive tender, and supporting documentation as to why has been deemed “weak”.

Two episodes of Single Transfer Actions (STA) - the awarding of contracts without any competition- to Company A were confirmed, for security at the council’s Skeoge site from 2012 to early 2015, and Brandywell Recycling Centre between 2011 and early 2015.

“The Council informed On Board that the value of these two STA contracts was £208,744,” the report found.

The new council has also bee urged to review its procurement process across the entire organisation.

The way Complainant B was dealt with in relation to the tender for the MTV Crashes event in 2014 was also found to be wanting, with the report.

David Nicholl managing director from On Board branded the former procurement process as “shambolic”, adding that it has undoubtedly damaged the Council’s image.

Derry & Strabane Strategic Director Stephen Gillespie, speaking on behalf of senior management, said many of the recommendations were already being implemented in the new council, while stating that the report is very damming for the previous council.

Independent Councillor Gary Donnelly said the complainants should be thanked for highlighting the extremely serious procurement issues, and questioned what happened with the absent documentation.