Lyric Theatre contract 'likely rigged' says Stormont's spending watchdog
- 13 November 2013
- From the section Northern Ireland
Stormont's spending watchdog has said it has a "strong impression" that the awarding of the £11m contract for the rebuilding of Belfast's Lyric Theatre was "rigged and manipulated".
However, the most senior civil servant in the Department of Culture, Arts and Leisure has said he did not believe there was evidence to support the claim.
The Public Accounts Committee (PAC) report centres on the way in which the contract was awarded to the building firm Gilbert Ash.
The report is a follow-up to an investigation by the NI Audit Office, however, it draws stronger conclusions.
It focuses on the way in which the consultants running the bidding process adjusted the costs in the tenders made by five construction firms.
The adjustment meant that Gilbert Ash, which had initially submitted the most expensive bid, came into line with the other firms. Gilbert Ash was then awarded the contract on the basis of a "quality ranking".
Six months later, the firm made a £150,000 donation to the Lyric rebuilding fund.
The PAC is strongly critical of the failure to retain the detailed documentation which shows how the bids were evaluated and adjusted.
Public sector best practice states that those documents should have been retained for seven years, however, the consultants running the process destroyed them shortly after the contract was awarded.
The PAC says that the Department of Culture, Arts and Leisure (DCAL) and the Arts Council should have taken ownership of the documents or ensured that they were kept by the consultants.
It considers that some of the adjustments made to the bids are "unexplained".
'Rigged and manipulated'
It also states that conflict of interest arrangements were "not adequate" and that the Lyric fundraisers were "pursuing patronage" from Gilbert Ash at the same time as contract negotiations were continuing.
It concludes that "taking all of the points in the round" it is "left with a very strong impression that the outcome of the tender process was both rigged and manipulated".
The chair of the PAC, Michaela Boyle, explained how its members had come to conclude there had been "serious flaws" within the tendering process.
"When the committee strongly said that we believed there had been manipulation around this process, that was in the absence of a strong documentation case coming before us," she said.
"There was insufficient evidence to conclude that the best practice approach and value for money was applied, there was no scrutiny of the tender evaluation process by the department or its agents which is central procurement.
"We recommended a number of different recommendations, but we're not a disciplinary committee so we can't recommend disciplinary action."
An earlier report by the NI Audit Office (NIAO) had concluded that it was "unable to obtain assurance" that the evaluation of the bids applied best practice.
It added that that there was no assurance that the adjustments made were "accurate and equitable".
An internal audit conducted by DCAL, which is attached to the PAC report, concluded that it was "highly unlikely" that the sponsorship donation from Gilbert Ash influenced the awarding of the contract.
Meanwhile, Gilbert Ash said it had "no control over the adjustment to tender costs made during the procurement process" - a practice it described "as standard in our industry to allow for like-for-like comparison of bids".
Its statement added that the firm was "delighted to sponsor the Lyric Theatre, a fantastic arts venue and a major contributor to cultural life in Northern Ireland.
"We implemented a similar sponsorship partnership when working on the Waterfront Hall project and may follow similar practice in the future, should the opportunity arise."
Sid McDowell, vice-chairman of the Lyric Theatre board, rejected the committee's findings as "an act of political delinquency".
"The conclusions are unfair, unjustified and unfounded," he said.
"We delivered a project on time, within budget and to specification - that's something to be proud of."
DCAL Minister Carál Ní Chuilín said: "I welcome the recommendations in the report. We will consider the PAC report and provide a formal response in due course.
"Significant changes have been made to the way in which the department manages its capital projects and many of the recommendations in the NIAO report have already been implemented."