State bodies fail to shop around
€144m worth of government contracts awarded without going to tender
MILLIONS of euro in taxpayers' money is being wasted because the Government is not putting contracts out to tender to get the cheapest prices.
New figures obtained by the Irish Independent show that government departments awarded more than €144m in contracts without looking for cheaper alternatives.
Experts say the Government is wasting millions by not sourcing new service providers at a time when the cost of contracts for goods and services has fallen an average of 30pc in line with the slump in the economy. The contracts, awarded in 2008 and 2009, ranged from office stationery to computer systems.
Details of the waste of public money comes as the Government struggles to find €15bn in savings over the next four years -- the first €6bn of which was outlined on Tuesday in the 2011 Budget.
The figures show the biggest offender was the Irish Prison Service (IPS), which awarded 154 contracts worth €22m in 2009 without looking for cheaper alternatives.
This expenditure extends across a range of purchases including building projects, security equipment, medicines and computer systems, according to the IPS.
Other government departments are also awarding contracts without looking for cheaper suppliers.
For example, the Department of Justice directly granted 44 contracts worth more than €5.6m in 2009. This is despite a statement on the department's website that "all procurements over €25,000 are published to e-tenders and to the European Journal as appropriate".
The figures were supplied to the Public Accounts Committee by the Department of Finance and include all contracts worth over €25,000 awarded by the Government without a competitive process in the two-year period.
Members of the committee will publish a paper on how the Government's €40m-a-day or €16bn-a-year procurement bill can be slashed later today.
The lion's share of the €16bn bill -- €6bn -- involves capital spending projects like roads and schools followed by the health sector, which accounts for just under €5bn in spend- ing on hospital services, drugs, medicines and GP fees.
According to the National Procurement Service (NPS), a government body established in 2009 to look at ways of saving money, some cuts have been achieved.
"It has overseen savings in the order of €27m across the public sector for 2009, and a target of €39m has been set for this year," a spokesperson for the NPS told the Irish Independent.
"Contracting authorities have been asked to report savings as a result of retendering in 2010."
She added that the Comptroller & Auditor General, the watchdog for public spending, has warned that non-competitive tendering has to be reduced across government bodies and departments.
However, private procurement specialists said significant savings can be achieved when contracts are put out to competitive tender.
"Since 2007, construction tender prices have declined by 31.8pc," said Neil Copland, MD of procurement specialist Expense Reduction Analysts.
"In the case of the public service, the lack of forensic analysis, poor market knowledge and limited audits means that government departments and bodies are not receiving optimal prices."