Steps to Work Contracts

Part of Private Members’ Business – in the Northern Ireland Assembly at 12:45 pm on 27 April 2009.

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Photo of Alex Attwood Alex Attwood Social Democratic and Labour Party 12:45, 27 April 2009

I beg to move

That this Assembly notes the procurement process for the award of Steps to Work contracts; expresses concern about the management, the requirements and the conduct of the process; and calls for a joint inquiry involving the Committee for Employment and Learning and the Committee for Finance and Personnel, into the conduct of the procurement process.

I ask you to please correct the clock, Mr Speaker.

I will make some preliminary remarks before I get to the heart of the motion. I want to ensure that there is no doubt about the scope of the motion. It is six or seven years since the current public procurement arrangements in Northern Ireland were put in place. Annually, in excess of £2 billion of public funds may be used for public procurement exercises. Concerns have been raised in some places about a range of public contracts, particularly in relation to Steps to Work. Given the number of successful challenges to our procurement policy that have been taken through court proceedings, it seems timely to take the process into a new phase.

I reassure the House and the Minister that the object of the motion is not to circumvent a principle that the Minister outlined to me in a letter in September last year, when he said that there was a need for a:

“procurement process to satisfy the principles of EU law, particularly with regard to non-discrimination, fairness and transparency.”

The purpose of the motion is not in conflict with that declaration of principle nor with the requirements of EU procurement policy. Neither is it the intention of the motion to create an insular and protectionist approach to public procurement policy in Northern Ireland. The motion is not intended to do any of that.

Businesses in the North, of whatever nature, need to be stretched and challenged in respect of the service that they provide and the contracts that they might be awarded to ensure that they offer efficiency, effectiveness and value for money. The motion is not some attempt by a politician or the Assembly to cry after the Steps to Work milk has been spilt.

In August of last year, before the Steps to Work contracts were awarded, I wrote to the Minister for Employment and Learning to flag up issues of principle that I believe needed to be satisfied when it came to the procurement exercise, to ensure that the issues that have arisen subsequently may be mitigated or would not arise at all. This is not a motion in which we are crying over split milk; it reflects some of the concerns that existed in and around the time of the procurement exercise. That is the purpose of the debate, and I hope that the Minister and others are reassured of its intention.

To explain what is at the heart of some of the concerns around the Steps to Work contracts, I will give three or four examples. When one organisation that was awarded contracts under the procurement exercise was tendering for the contracts, it made explicit how it intended to proceed. In its submission for the tendering process, that organisation stated that it was its:

“intention to act as Managing Agent, subcontracting out the majority of the provision and ‘filling gaps’ where required.”

When a contract for Training for Success, Steps to Work or any other public provision in the North is being awarded, there is an obligation on those managing the procurement process and on government to probe what those sorts of words mean and ask whether it is appropriate that an organisation that is bidding for work outlines in its opening statement its intention to subcontract out the majority of the work. That may be consistent with procurement policy, but I ask — a joint Committee inquiry should also ask — whether that is the best way to proceed.

If that is the best way to proceed, a second question arises about that procurement exercise: what is the quality of the submission that is expected at the tendering stage in respect of the subcontracting proposals? I know of a tenderer who was awarded a contract worth millions of pounds over a number of years, but, when that contract was awarded, all that was outlined regarding the subcontracting proposals was a letter of support — just like the one that I have referred to already — indicating in minimum terms what the subcontracting arrangements might be in the future. In that instance, unsolicited letters of support that were sent out to trade organisations in Northern Ireland, some of which some received the letter only two weeks before the deadline for tendering submissions, in May of last year were regarded as a sufficient basis for the procurement unit to conclude that there was evidence of a subcontracting relationship and allowed the contractor to be awarded preferred status. Is that a process that is fit for purpose, given that the Assembly previously endorsed the Committee for Employment and Learning’s report on Training for Success, which dealt with subcontracting relationships?

The report states that the Central Procurement Directorate should put in place:

“mechanisms to ensure that stated agreements in contract bids are supported with formal written documentation clearly demonstrating the willingness of third-parties to be considered as part of the substantive bid (and which provide details of the level of resources agreed to be provided)”.

That is what the Committee had endorsed by the Assembly. It seems to me, however, that, when it came to a subsequent procurement exercise, the Central Procurement Directorate endorsed a preferred status to contract bids on the basis of a letter of support. That does not stand up to what the Assembly previously endorsed, namely that details of the level of resources agreed to be provided should be outlined in sub­contracting arrangements.

My third example is that, when preferred status was granted to one organisation three weeks before those contracts went live, that organisation had one member of staff in Northern Ireland and no training accommodation here. That organisation, having had no involvement in the North, had little or no knowledge of local and regional employment opportunities, which was the essence of the tender process’s requirements. When that organisation went live three weeks later in its Steps to Work training provision, which, according to Department for Employment and Learning (DEL) officials, was required to be fully operational when the contracts went live, it was still interviewing dozens of people to provide the services that it was contracted to provide. When the contracts went live, people in Northern Ireland who were contacting that organisation were referred to offices in England and were then given a mobile telephone number to ring to pursue their interest in taking up Steps to Work.

My fourth example concerns the rigour and capacity of the evaluation process. Departmental officials signed off evaluations several weeks after the evaluation process had been undertaken, and there was little information in the documentation about the basis on which officials had made decisions on which contracts should be awarded. There is a need, especially given the McLaughlin and Harvey court case last year, to re-examine how processes are managed, whether they are exhaustive and detailed, and whether all relevant information is recorded on that documentation. That is the essence of some of the thinking behind the motion, which will, I hope, attract support.

There is, of course, another reason why we should send out a message about procurement: to inform those who tender for contracts in the North that there will be accountability on the Floor of the Chamber for what happens to ensure that the billions of pounds that are spent on the public good in Northern Ireland are spent properly, efficiently and effectively.