An Oxford County Council parking enforcement contractor has overturned a procurement decision to award a contract to a competitor and forced the council to pay out £1.6m.
The council settled out of court with Marston Holdings after the company sued when it was not re-awarded a contract to carry out parking enforcement.
Council lawyers estimated the local authority’s chances of losing the case in court were between 75% and 85% due to “significant failings” made during the procurement process.
A report, due to be presented to the council’s audit and governance committee on 3 March, found there had been errors – “some minor and some more significant” – around record keeping and procurement.
Marston Holdings had complained in June 2019 the procurement of the parking “had been undertaken contrary to the procurement regulations”.
“A systemic failure occurred over a prolonged timeframe. There was not enough evidence to suggest this was the consequence of a lack of competence or purposeful action by clearly identifiable individual or group of individuals,” said the report.
“Inconsistent management and the use of agency and temporary workers within both the service and procurement teams prevented full oversight and the appropriate escalation of risks and issues.”
The report also found issues related to the council’s procurement guidance resulted “in poor process”.
However the report does not detail the mistakes made by the procurement team.
The 10-page report, commissioned by chief executive Yvonne Rees, goes into considerable detail about the process of the investigation and “rigorous new procedures” the council has introduced.
But the council argued the principle of commercial confidentiality outweighed the interests of public disclosure and decided not to disclose many details of the case.
It confirmed it had paid more than £1.6m after it agreed to settle the case out of court and had become liable for the legal costs of Marston Holdings Ltd, but the report did not reveal how much of this payment was compensation.
The report did say a claim for costs of £649,972.05 by the claimant was considered excessive and that further negotiation had taken place.
As part of the investigation an independent third-party reviewer interviewed current and former staff and approached three other local authorities, without revealing who he was investigating.
In a series of virtual interviews carried out during lockdown he asked procurement departments how they would have carried out a tender process like the one he was investigating.
Oxfordshire County Council said following the case matters had been “addressed in detail and rectified for the future”.
It said it had since introduced “rigorous new procedures” and the case had led to “significant personnel change”.
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