Archived decisions

    10. Commentary on Process for Engaging External Consultants for Project

    Team Roles

    10.1 The advice given by the Head of Corporate and Legal Services in his email

        of 24th February 2006, was that the appointments to the other roles should follow a mini-competition through the G-Cat procedures, which would ensure compliance with EU Procurement Regulations and Standing Orders. This advice was not followed.

    10.2 It appears that the reason this was not followed was due to a failure in

        communication. The E-Government and Corporate IT Manager asked the Board Chairman by email of 27th February 2006 whether the Head of Corporate and Legal Services should be informed of the slightly different procedure proposed to recruit to two of the external roles. The reply of the Board Chairman - "only if it is necessary" - was intended by the Board Chairman to mean that the E-Government and Corporate IT Manager should use his own judgement in that matter. However, the E-Government and Corporate IT Manager took this to mean that the Board Chairman did not consider it necessary. In this context, it should be borne in mind that the E-Government and Corporate IT Manager had previously been told by the Board Chairman that he had got himself "in a hole" and received "predictable corporate response" following his consultation of corporate advisers in HR, legal services and County Supplies on the arrangements for recruiting to the Programme Manager role. In this context, the E-Government and Corporate IT Manager proceeded on the basis the process set out in his email of 27 February 2006 had the blessing of the Board Chairman.

    10.3 In his memo of 22nd February 2006, the Board Chairman had asked the E-

        Government and Corporate IT Manager to set out in more detail "the management framework for the Programme Manager role and the key milestones that need to be reached in terms of time and money". The E-Government and Corporate IT Manager's reply dated 28th March 2006 set out that management framework. This made it clear that the "key deliverables" included "management of the organisational design, identification, recruitment and training of Contact Centre staff" and "the management of the selection, procurement and implementation of the Contact Centre solution, including CRM and telephony". There was authority to make day to day decisions, with escalation to the E-Government and Corporate IT Manager and Contact Centre Board for issues which impacted on timeline or cost. Line management of the Programme Manager was the responsibility of the E-Government and Corporate IT Manager and the E-Government and Corporate IT Manager was also responsible for the budget, with authority to commit expenditure with agreed limits set by the Contact Centre Board. On the basis that this was the framework within which the programme Manager would be operating, his appointment was approved by the Board Chairman on 4th April 2006.

    10.4 The engagement of consultants to the Project Team roles then proceeded

        on this basis - day to day arrangements being made by the Programme Manager (Consultant A), with management of the budget and authority to make decisions committing expenditure resting with the E-Government and Corporate IT Manager.

    10.5 Consultant B's contract for the period 1st February to 8th August 2006 had

        a value of £81,875 and the value of the extension 9th August 2006 for 140 working days was £85,120. Consultant B's contract expired in March 2007. The total value of the contract for the period 1st February 2006 to 31st March 2007 was £166,995.

    10.6 Other than the period of the contract, and a slight reduction in rate in the

        extended period, both contracts were on the same terms. Consultant B worked to the same role profile in both contracts. The duties handled were all capable of being performed satisfactorily by one consultant with the relevant skills and experience, and leant themselves to packaging as the one contract. Had the need for external consultancy support with these tasks been more thoroughly assessed at an earlier stage, the true value of the work that needed to be procured from a suitably experienced consultant, to cover these aspects of the project, would have been established.

    10.7 A contract for services to the value of £166,995 would have been subject

        to the EU Procurement Regulations and, being in excess of £75,000, a full tendering procedure would have been required under Standing Orders. Even if treated as two separate contracts, the value of each was in excess of £75,000. The much more limited selection process adopted prior to engagement of Consultant B in January 2006 did not meet the requirements of Standing Orders. Consequently, the degree of evidence that would normally have been available from such a tender process, to demonstrate fairness and best value in the award of work to an external contractor of a total value beyond £75,000, is not available.

    10.8 The value of Consultant C's contract from 1st May 2006 for a period of six

        months was £81,090. She was re-engaged on 1st December 2006 for thirteen months, the value of the new contract being £148,849. The total value of contracts for the services of Consultant C is £229,939.

    10.9 The two contracts had separate job titles, although it would appear that

          Consultant C worked to the one role profile in both roles. However, even if one gives the benefit of the doubt, both contracts were beyond the £75,000 Standing Orders threshold, and the second beyond the EU Procurement Regulations threshold. The process followed met neither set of requirements.

10.10 Consultant D's contract commencing 28th August 2006 for 12 months had

        a value of £138,050. A contract for services of this value would not have

    been subject to the EU Procurement Regulations. However, as it was in

    excess of £75,000, a full tendering procedure would have been required

    under Standing Orders. Although Consultant D had been considered in

    the context of a selection process in January 2006 that led to the

    engagement of Consultant B, this was for a different role from that for

        which he was subsequently engaged. There was no further selection process prior to engaging Consultant D. Consequently, the degree of evidence that would normally have been available from such a tender process, to demonstrate fairness and best value in the award of work to an external contractor of a total value beyond £75,000, is not available.

    10.11 Consultant E's contract commencing at end January 2007 had an initial

          value of £38,400. At least three agencies were approached to provide CVs for the role to which Consultant E was appointed, and five candidates interviewed. There is evidence that candidates were measured against the requirements of the person specification in the role profile. While the procedure may not have fully complied with Standing Orders, there is nevertheless evidence of a competitive process being followed involving at least three suppliers. The extension to the contract agreed in May 2007 was arranged through the Manpower framework contract.

    10.12 The value of Consultant F's contract, as extended, is £82,320. A contract

          for services of this value would not have been subject to the EU Procurement Regulations. However, as it was in excess of £75,000, a full tendering procedure would have been required under Standing Orders. Consequently, the degree of evidence that would normally have been available from such a tender process, to demonstrate fairness and best value in the award of work to an external contractor of a total value beyond £75,000, is not available.

    10.13 The total value of payments to Consultant G is £74,800. The procedure

      followed provided for three agencies being approached with a brief role

        specification, 15 CVs being supplied, and 8 candidates being invited for

        interview. While the procedure may not have fully complied with standing

        orders, there is nevertheless evidence of a competitive process being

        followed involving at least three suppliers.

10.14 The contracts for the services of Consultants B, C, D, and F that were of

        a value greater than £75,000 were all signed by the E-Government and

        Corporate IT Manager on behalf of the Council. This is a failure to

        comply with the Council's processes as (as stated in paragraph 6.10

        above) contracts of such value should be referred to the Head of

        Corporate and Legal Services for signature. The fact that these were not

        so referred, meant that checks that would normally be made within the

        Chief Executive's Department, as to proper authority having been

        obtained, and all necessary processes having been followed, prior to the

        Council becoming contractually bound, were not made.

10.15 The incremental engagement of consultants brought about a position

          where the six external consultants assigned to roles in connection with the project were all from the one agency. There is evidence to support the fact that candidates from more than the one agency were interviewed for the roles assigned to Consultants A, B, E, F and G, and that Consultant D was assessed alongside candidates from other agencies in the process leading to the appointment of Consultant B. In the case of Consultants A, B and E, there is also some evidence from these processes that the successful candidates were chosen on the basis of objective criteria relevant to the job, as set out in the relevant role profile. Consultant A was involved in interviewing the candidates for the Project Team roles, although decisions on which candidate to appoint were made by the E-Government and Corporate IT Manager. While it was considered important to have the benefit of Consultant A's experience in the evaluation of candidates, this did give rise to an apparent conflict of interest, where the candidates under consideration were from the same agency as him. There is no evidence that any favouritism was shown to candidates from the one agency involved, or that any person involved in the process benefited in any personal capacity from any such award. With regard to the expectations of the Head of IT Services as to the documentation that should be available to support the retention of consultants (Paragraph 8.19), the position is that some, but not all, of these records exist in some, but not all, cases. However, the key fact here is that, as full tendering procedures were not followed, the degree of evidence that would normally have been available from such a tender process, to demonstrate fairness and propriety in the award of contracts, is not available.

    10.16 Although the principle of employing external consultants to certain roles in

    the Project Team was specifically identified in the Cabinet report of

      December 2005, there is no evidence of any overall procurement strategy

      being adopted to ensure that the external skills and experience necessary

        for the duration of the project would be obtained. Had this been the case,

        the work required could have been packaged and subjected to a tendering

        process. The total value of the work carried out by the Programme

        Manager from April 2006 and the Consultants in the Project Team from

        February 2006, was £939,898. An aggregated contract for services of this

        size, when subjected to competitive tender, may well have resulted in

        better value rates being obtained.