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Saturday, July 24, 2010

Clash of procurement lore and law in UK councils

Fife Council stumps up £155,000 for light blunder
"Regulations were put in place in 2006 that are very demanding but councils, bluntly, don't adhere to them.

"They have to adhere to them, it is the law. We're not prepared to have old methods and ideas determining what's right and what's wrong.

"In this case, the council's procurement department was very slow in admitting there was a screw-up.

"We were very persistent and you've no idea how persistent you've got to be because you are faced with all sorts of things put in your way."

Fife Council has paid the Larbert firm Lightways (Contractors) Limited £155,000 in compensation for loss of profit after it failed to give the firm a three-year contract to provide festive lights and decorations in Fife towns.

An out-of-court settlement was agreed after it emerged the council had twice breached public procurement regulations in awarding the contract, which went to Ladybank firm Blachere Illumination last summer.

Little has been made public about the flaws identified in the procurement process, but a report outlining the background to the case has been considered in private by councillors.

It is understood the value of the contract, to provide festive lights and cross-street features in various towns, was in excess of £300,000.

Paul Vaughan, the council's policy and communications senior manager, said the local authority's internal auditors were looking into the matter.

"A report was brought before the policy, finance and asset management committee that outlined two breaches of the public procurement regulations and set out a number of lessons that had been learned.

Meanwhile, in another council, the new procurement boss reckons he can save a lot of money for the rate payers by effective procurement practices.

City council procurement shake-up will save £7m in 18 months
Laurence O'Neill, who took over as Stoke-on-Trent City Council's head of procurement and contracting in February, believes his department can play a pivotal role in cutting the authority's budget.

Procurement at the authority was criticised last year after the collapse of the tendering process to demolish the former Westcliffe Hospital building in Chell.

The council had awarded a £1.1 million contract to bulldoze the site in October. But the deal was rejected by councillors after it emerged that tendering procedures had not been followed.

Mr O'Neill said his ongoing shake-up of procurement will simplify procedures and ensure that all departments use them.

He also wants the authority to review all of its purchases to work out which could be done more cheaply through better tendering processes.

And he said that the authority can save even more money by cutting the number of large contracts which by-pass tendering completely under the special exemption scheme to hand the work to one chosen company.

"We have only just discovered that we spend £4.5 million a year on catering across different directorates, because it was never visible as one area of spending.

"But we can now bring things like this together and look at getting a better price for those contracts."

Lib-Dem councillor Kieran Clarke, the cabinet member for finance, performance and governance, said: "In the past, contracts were awarded and then sort of forgotten. We need to have much better monitoring in place."

Mr O'Neill also said he believes councillors should be more closely involved in major contracting decisions.

I'm more dubious about interjecting local pollies into the procurement process, but there you go. Maybe his council has more detached and disinterested ministerial responsibility than most other places. Yes, minister?

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