Law delayed CCTV contract

(CNS): Although the auditor general said that the tendering process for the installation of the public CCTV to fight crime was mostly in accordance with the proper procedures, Alastair Swarbrick highlighted a significant number of concerns about the contract after the tender was selected. He said there were numerous concerns, from delays on the project  to the lack of a cost analysis, as well as a failure by government officials to follow proper procedure. Swarbrick also stated that, after a sense of urgency surrounded the project as a solution to the country's crime problem, government took almost a year to bring the necessary legislation to the Legislative Assembly required to facilitate the installation of the cameras.

Swarbrick said the first delay came from Cabinet halting the proceedings and asking the Portfolio of Internal and External Affairs a series of questions about the bid, which he said caused angst among the bidders and went against the principles of good procurement practice.

Although there had been concerns about the CCTV bid because of the portfolio DTC Eric Bush’s relationship with one of the bidders, Swarbrick said that Bush had recused himself from the process and had nothing to do with the bid, including the creation of the request for proposals (RFP).

Swarbrick said that the trouble with the CCTV bid lay in other areas, including the fact that the business case for the project was weak. He said the IEA had not analysed the situation or looked at cost options but had simply acted on information from the RCIPS.

“We expected that a project such as the CCTV programme would have a robust business case that included a complete review of options to address the business needs identified," the auditor wrote in the report. “As well we expected that the business case would include not only the cost of installing hardware and software but also the cost of ongoing operations.”

However, the auditor found that the annual running costs of more than half a million dollars were only revealed to Cabinet a few weeks before this year's budget. “This information was not made available to legislators when the programme was approved as part of the 2010/11 budget. By that time it was too late to make a decision not to proceed,” he added.

Given the circumstances, the auditor recommended that government entities must make detailed business cases for major projects in order to demonstrate value for money, as outlined in the financial regulations.

Swarbrick stated that aside from the delay caused by Cabinet stopping the process just days before The Security Centre was to be informed officially, the real delay was caused by government's failure to enact the necessary law.

“We believe the government did not do enough to ensure (the project) was completed in a timely fashion recognizing the importance of the programme to the objectives it was trying to achieve," the report reveals. “When it was approved, there was considerable urgency associated with the need for a camera system as a key component to achieve the wider range objective to reduce crime.”

However, although the project team had identified the need for a change in the ICTA law in relation to using CUC poles to mount the cameras and carry the network, it was months before the law was changed. The ICTA was told in June 2010 to start work on revising the law but it did not reach the LA until eleven months later.

“The ICTA did not take the necessary action on a timely basis," Swarbrick stated. He said it was outside his office's remit to review what happened but he recommends that government take action to find out what did cause the unacceptable delay and prevent similar delays in the future.

A further criticism that the AG has of the CCTV contract was the advance payment made to The Security Centre of more than $344,000 — some 25 percent of the cost of the project. Swarbrick pointed out that as government has no guidelines in place relating to advance payments, there is no way of knowing if this was warranted and, more importantly, if the risk to public money was properly managed.

The auditor said that advance payments are sometime needed but should only be made with proper guidance to ensure government considers the financing and interest costs as well as the risks involved and he said in this case there was no evidence to show the need for the payment or any consideration made about it by government officials.

The auditor also criticised the fact that the change orders made after the contract was awarded were done so under criteria established by the contractor and not government. When the AG pointed out the trouble, he said the portfolio rectified the situation but to date over a half a million dollars has been added to the original contract.

Another problem found by Swarbrick was that the portfolio had split a separate project management contract related to the CCTV into three to avoid tendering, when really it should have been one contract. The report reveals that the portfolio gave three contracts to help install the system to a consultant company called Security Risk Management Consultants in Columbus, Ohio, each of which was worth $48,580 but totalled  more than $145,000.

According to the financial regulations, although only contracts over CI$250,000 need to go through the CTC, government departments should still put any contract worth more than $50k out to competitive tender. In this case, because the portfolio split up what was in reality one contract, it avoided that process, essentially circumventing the rules.

“It is clear in this case that the contracting process was structured to avoid the intent of the financial regulations," Swarbrick said. “We found little or no evidence that the time spent by the contractor could be identified as being associated with one contract or another.”

The auditor further revealed that since contracts were signed with the firm $147,000 has been spent and a contract amendment has increased the total value to $175,000.

Swarbrick said government must put in place guidelines to stop government officials circumventing the rules.

See report Auditor General's report on case studies below