The government’s internal audit department has launched an investigation into a payment made to a contractor on the orders of Education Minister Evarist Bartolo.

Last Sunday this newspaper revealed that in October 2015, Mr Bartolo ordered a payment of €418,000 to be made for works carried out at a State school even though the Foundation for Tomorrow’s Schools was seriously disputing the contractor’s financial claims.

It has also emerged that Mr Bartolo met the managing director of Avantgarde Projects Limited, the contractor, to discuss pending bills just five days after he had been sworn in as minister following Labour’s 2013 election victory.

Mr Bartolo has repeatedly refused to answer the question of whether he had met the contractor over the issue. But in a letter to the editor today (see page 24) Avantgarde managing director Joe Vella says he met the minister on March 18, 2013, to discuss the matter.

Documents seen by this newspaper show that during the meeting, Mr Vella presented Mr Bartolo with a dossier of what he claimed were pending bills. 

Following last Sunday’s story, officials from the Internal Audit and Investigations Department spent hours at the school in question, St Ignatius College in Ħandaq, Qormi, inspecting the disputed works and measuring the tiling and marble installed by Avantgarde.

The onsite inspection is expected to continue over the coming days.

Mr Bartolo says he has been unjustly accused of acting improperly. He said he had been the solution and not the problem

The Sunday Times of Malta is also informed that a number of former and current FTS officials and representatives of Avantgarde have been instructed by the IAID to make representations.

It is not being excluded that Mr Bartolo, his permanent secretary Joseph Caruana and Edward Caruana – the minister’s person of trust at the FTS who is currently under police investigation on separate fraud and corruption claims – will also be called to provide their version and answer questions.

The case goes back to 2011, when a tender issued by the FTS for tiling and marble works at St Ignatius College was won by Avantgarde, which had the cheapest offer.

However, according to an FTS internal report, the contractor did not meet the deadlines imposed by the tender and installed material not according to the tender and without authorisation.

The report also says that Avantgarde charged the FTS higher rates than those stipulated by the tender and for material which was not accounted for.

On its part, Avantgarde claimed it delivered its work according to the contract and all the works were carried out on the verbal approval of FTS officials.

In order to settle the issue, the FTS had recommended to the Education Ministry that an independent quantity surveyor should be engaged in order to re-measure the works and decide the way forward.

It also recommended that should Avantgarde insist on pursuing its claims, it could take the dispute in front of an arbiter as stipulated by the contract.

Instead of backing the FTS’s recommendations, however, Mr Bartolo approved a memorandum prepared by his permanent secretary, Joseph Caruana, requesting the FTS “to settle the amount of €418,475.13 being in full and final settlement due to Avantgarde Projects Ltd”.

According to the Permanent Secretary’s memo, this was “in order to resolve the litigation and conclude the case”.

This ‘extra’ payment was over and above the €521,000 which the FTS had already paid the contractor until August 2012.

Mr Bartolo says he has been unjustly accused of acting improperly. He said last week that he had been the solution and not the problem as he had wanted to solve an issue left behind by the former Nationalist administration.

He insists he decided to pay the disputed bills as a commitment had been made by the previous chairman to honour the works done.

When contacted, however, former FTS chairman Ray Fenech denied he had made such a promise.

Mr Fenech, who is chairman of the Tumas Group, invited the ministry to measure the works carried out to find out who was right, the FTS or the contractor.

Memo from the Permanent Secretary

Excerpts of a memo written by Permanent Secretary Joseph Caruana and approved by Minister Evarist Bartolo on October 19, 2015.

“From the documentation provided (by FTS and Avantgarde), it transpires that FTS lacked effective supervision and control on the contractor and failed to impose any penalties as stipulated in the General Contracts Regulations.

“Though FTS issued a number of warning mails, it failed to take effective action for non-compliance with the programme of work. Furthermore, there was also assurance from the former chairman, Raymond Fenech of FTS, that they will be ready to honour deliverables of items even if it results that the rate is higher than those published in the tender documents.

“On the part of the contractor, it results that although he was aware of the Contracts Tender Regulations, he took the risk to provide the required items and carry out the required works without a formal agreement and the necessary approvals.

“Furthermore, it is clear that the contractor failed to keep with the programme of works with the consequence that the contractor incurred additional work. However, it must be noted that FTS failed to give clear direction and an effective programme management.”

Comments by former FTS chairman Raymond Fenech

“FTS had made no commitment outside what was stipulated in the tender. How could I commit myself to honour something that was not in line with the government’s procurement rules?

“They [FTS and the Ministry] have all the files at their disposal and can look at all the correspondence with this particular problematic bidder. We could never pay for things that were not according to tender.”

Report by FTS on disputed works by Avantgarde

“The contract was characterised with financial difficulties encountered by the contractor that have jeopardised the timely completion of the project.

“At the outset, it is being stated that Article 46 of the general conditions states that contracts shall be at fixed process which shall not be revised. Accordingly, changes to process, as claimed by the contractor, cannot be acceded to.

“The contractor billed the FTS for quantities of tiles and marble that had not been certified, charged rates well above these stipulated in the contract and supplied different materials from those requested.

“The claims by the contractor come as a surprise, since we have enough cause to charge penalties for delays in terms of the contract.”

ivan.camilleri@timesofmalta.com