independent

Sunday 20 April 2014

Irish Water contracts never went to tender

John Tierney, Managing Director of Irish Water. Photo: Maxwells
John Tierney, Managing Director of Irish Water. Photo: Maxwells

FOUR major contracts were awarded by Irish Water without being put out to public competition, the Irish Independent has learned.

The company used exemptions in EU procurement rules to award contracts for computer services to four suppliers already working for parent company Bord Gais.

The revelation comes just a week after the company's managing director, John Tierney, said all contracts were awarded following "open competition".

The matter is expected to be raised today when Mr Tierney appears before the Dail Environment Committee to answer questions on how the utility company spent €50m on external consultants.

The details are contained in EU tender documents seen by the Irish Independent.

The company insisted that no rules were broken and that existing contracts were being extended as is allowed under EU law.

Contracts for computer systems for payroll, scheduling maintenance works and recording the assets held by the company were among those offered to existing suppliers, including IBM.

Irish Water cited "technical" reasons for not opening the contracts to competition.

It comes as Social Protection Minister Joan Burton warned that Irish Water must not be seen as a "gold-plated" operation.

"We want to see all costs under strict management so that there is the best value for money for taxpayers," she told the Irish Independent.

Mr Tierney will appear before the Dail Environment Committee today, and the powerful Public Accounts Committee tomorrow, to answer questions about a controversial €50m spend on consultants incurred by the company since it was established in April 2012.

Dozens of contracts have been awarded during the setting up of the new utility, which will begin charging homeowners for water from next October, with the first bills arriving the following January.

CRITICISM

But there has been widespread criticism of the spending on outside experts. Several government ministers -- including Tanaiste Eamon Gilmore -- have said they expect the company to clearly state how much was given to each firm and what services were provided in return.

Mr Tierney is also expected to compare the costs with those incurred in similar projects both here and abroad.

There are also questions about why some consultants were employed, including those with expertise in pensions and industrial relations, given that parent company Bord Gais would have much of this expertise in-house.

Fianna Fail's environment spokesman Barry Cowen said questions needed to be answered on how companies were chosen, adding that Irish Water would also have to detail the costs incurred.

"We've asked through oral questions, written questions and parliamentary questions and there's been no plan of action detailing the process undertaken and the costs," he said.

"There are two issues at play. The whole area of consultancy figures seems excessive, and it's information we had sought in the past but didn't get which was very frustrating. We'll deal with the €50m and go through it in as thorough a fashion as possible."

So far, €100m has been spent establishing Irish Water -- of which more than €50m has been paid to private companies including Ernst & Young, IBM, Accenture, Oracle, KPMG and PWC.

EU tender documents show that at least four contracts were awarded to companies already working for Bord Gais, including CORE Software based in Mitchelstown in Cork, IBM in Dublin, and two UK-based companies, Syclo International Limited from Surrey and ClickSoftware Europe Ltd with an address at Burnham Bucks.

The reason they were not open to competition was because Bord Gais said the contracts would not be delivered on time due to the technical challenges involved.

In a statement to the Irish Independent, the company said the contracts offered were for software applications such as billing, asset management and financial management licences.

Irish Water was operating using the same IT systems as Bord Gais and the companies were appointed following a competitive tender process.

PAC chairman John McGuinness said tomorrow's meeting would provide an opportunity to "stress test" the oversight systems in place for Irish Water.

 

Paul Melia

Irish Independent

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