Shortcomings and irregularities

A report by the Auditor General has found shortcomings and irregularities in a speed cameras tender audit and recommended that local councils should strictly adhere to applicable tendering regulations and procedures.

Following an investigation relating to the tender issued for the provision of warden services and installation of speed cameras by four local council joint committees - Sliema, Birkirkara, Central and North Joint Committees - the auditor said local council joint committees should better plan the full tendering process.

On January 20, 2005, the Minister for Justice and Home Affairs told the Auditor General that he had received allegations of lack of transparency and irregularities relating to a tender issued late in 2004.

Complaints concerning the handling of the matter had been addressed to the minister responsible for local councils by the unsuccessful bidder, who chose not to avail himself of the opportunity for an appeal to be heard against the joint committees' decision or to officially request an ad hoc Public Accounts Committee inquiry.

The investigation found that the tender document requesting the provision of ancillary services - namely the provision of services relating to closed-circuit television, monitoring of closed-circuit television, towing and clamping and speed camera - were not specifically mentioned in the Government Gazette advert. The provision of these services could have been split into at least two distinct tenders.

The four joint committees erroneously opted for a 30-day publication period rather than 52 days, the latter applicable for an open tender procedure.

The Auditor General said better planning should have led to an earlier date of issue of tender, thus guaranteeing ample time for implementation in the eventuality of a new provider winning the bid. The adjudication board lacked technical expertise and a representative of one of the joint committees. The presence in the adjudicating board of an authorised officer, being one of the signatories to the running contract and to eventual contracts with the agency, was questionable.

Minutes of meetings of each of the joint committees did not provide sufficient evidence that the matter was deliberated upon or discussed and evaluated.

The investigation further found that the ad hoc adjudication board had decided that, because of the similarity in prices tendered for the warden service, apart from the price tendered it had to consider other factors such as past experience of the tenderer in law enforcement, the work plan submitted in the bid and available facilities and equipment. Within this context, the board had felt that the Guard and Warden Service House Ltd had more experience, manpower and equipment although the unsuccessful bidder had tendered lower prices for the ancillary services.

However, no recommendation was forwarded and the tender was referred to the four joint committees to make their decision.

The contract agreement was signed before all four joint committees had sent the notice of refusal, during the 10 working days appeal period.

All four joint committees unanimously approved the award of the tender to the Guard and Warden Service House Ltd. The contractor was informed by letter of acceptance dated December 7, 2004, whereas the unsuccessful bidder was informed of the tender adjudication by each of the joint committees in four separate letters dated December 14 and 30, 2004.

Apart from the foregoing, the investigation noted other shortcomings. These included the minimum five-year revenue-sharing agreement entered into on July 6, 2004, concerning the eventual installation of speed cameras within the defined boundaries of the councils represented by the Sliema Joint Committee; the extension of the 1999 contract between Sliema Joint Committee and the Guard and Warden Service House Ltd for additional enforcement services up to the end of January 2005; the "unethical" meeting held between North Joint Committee and the Guard and Warden Service House Ltd during the evaluation and adjudication phase of the new call for tenders; and the fact that the Legal Enforcement System was eventually drafted into law in 2006.

The Auditor General had also been asked to establish whether any of the stakeholders involved in the drawing up of the tender documentation, the adjudication of the offers received and the service recipients (the four joint committees requesting the services) had a conflict of interest.

Since the law is concerned only with pecuniary interests, it was not deemed within the competence of the investigation to inquire on any other form which the interest could conceivably assume. No councillor involved in the tender proceedings made disclosure of any pecuniary interests and, in the absence of contrary evidence, the Auditor General concluded that there was no real conflict of interest of the type contemplated by the law.

Another issue was to determine whether the speed cameras were fixed before or after the date of the letter of acceptance.

The St Julians cameras started operation on November 24, 2004 - before any of the four joint committees had adjudicated the 2004 tender. If credit was to be given to the reasoning that the cameras in question related to the 1999 contract, then the issue of irregularity did not arise.