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Regular news: Issue 599 22 Jun 2012

Council director ‘failed to follow procedures’ for highways procurement – Audit Commission

The Dirtector of technical services at Wirral Council did not follow council procedures by meeting with one of the potential bidders during the pre-tender period for a highways contract, the Audit Commission has found.

The Commission has carried out a follow-up report to an audit of a procurement carried out by Wirral that led to Colas taking over the full range of highways services for the authority after whistle-blowers raised concerns about the process.

The Commission found that director David Green had met a Colas representative to discuss the contract, which was “likely to have placed the council in breach of the general EU treaty principles of fairness applicable to procurement”. Furthermore, Green “should have declared his relationship with the contractor’s representative before he did so,” which was after the contract was awarded.

Wirral has suspended Green pending the results of an independent investigation into his role in the procurement for the contract, which started in 2009. Council leader Phil Davies has asked the acting chief executive “to ensure the investigation establishes if any further action should be taken to ensure everyone who needs to be held to account is”.

The Commission’s second report into the procurement, carried out once information on the value-for-money of the contract was available, identified procurement weaknesses that have led to cost increases.

The council’s contract evaluation team accepted “unusually low rates” for some electrical work for street lighting and traffic signs that were only 2% of the average of the other tenderers. After the contract started, additional payments of £1.5m had to be made, which, while not increasing the contract price above that of the next lowest tenderer, “casts doubt on the robustness of the tender evaluation”. The officers at the authority are also criticised by the Commission for not reporting these and three other contract variations of more than £50,000 to the director of finance.

Davies commented: “Never again must this council fail to ensure our contracts demonstrate value-for-money for the people of Wirral.”

Discuss highways procurement at LTT's Future of Highways Delivery Conference : 27 June 2012

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