Business Irish

Friday 24 November 2017

IDA audit finds contracts Down Under never put out to public tender

IDA has a contract with company in Sydney.
IDA has a contract with company in Sydney.
Colm Kelpie

Colm Kelpie

AN internal audit at the IDA has found instances where procurement guidelines were not followed, with no formal policies developed for the use of consultants and contractors.

The audit by accountants Deloitte, published internally last September, reviewed external appointments in the human resources, IT, legal and property departments at the semi-state agency.

It found that no formal tendering process was completed in two instances, with a contract for a company in Australia possibly in place for 25 years without the position ever being put out to public tender.

In another case, also in Australia, an IT contractor based in Sydney who previously worked for the IDA in Dublin was appointed in 2010 for three months but there was again no evidence that other providers had been formally invited to bid for the position when the contract was being extended.

"Within each of the departments, the departmental manager is responsible for the engagement of consultants and contractors," the report noted. "There are no formal policies relating to the management and evaluation of consultants and contractors."

The fieldwork by Deloitte took place in June 2012, but the report, released to the Irish Independent under Freedom of Information, was only published last September.

An IDA spokesman said the issues have since been resolved.

"IDA Ireland reviewed the case highlighted back in 2012 in an internal review. Amendments were since made to IDA procedures, bringing the organisation into line with best-practice in this area."

DISPUTE

The report concluded that formal contracts, contract deliverables and dispute resolution procedures were in place for the property and legal departments, but not for the contracts examined in IT and HR.

In one case where a company was engaged to represent the IDA in Australia in a role equivalent to overseas marketing executive, no formal tendering process had been carried out.

The original contract was entered into for two years from January 1998 and had been renewed every two years since. But the audit found no evidence of the extensions being put out to tender.

It also found that the same company, or an affiliate, may have been engaged to provide similar services between 1987 and 1998 but there was no evidence of any contract because documentation that far back was not kept.

IDA management argued there had been a business case for retaining the company. "Whilst IDA accepts that the original tendering arrangements 20 years ago did not comply with current procedures, the rationale for continuity of the contract makes sense for the business of IDA," it said.

The IT contractor appointed in Sydney in 2010 had been interviewed along with three other candidates. But the audit found no evidence of cost consideration being part of the process.

"Employing one experienced contractor has enabled IDA Ireland to provide complex services without incurring the substantial costs associated with having contractors in each office," the IDA response to the findings read.

It said a number of core systems had been designed and built by the contractor, which had later saved the agency money.

However, it said the contract had since been put out to tender. The IDA said its policy was that all consultants and contractors should be engaged using standard IDA procurement policy and procedures.

Irish Independent

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