County council 'broke procurement law' over road gritting contract

25 November 2021

Cambridgeshire County Council (CCC) broke EU procurement laws over two contracts for road gritting and consultancy services, according to an audit.

Auditor BDO identified two breaches of procurement law relating to contracts from 2015 and 2016 worth £5.8m.

BDO said legal advice showed “there has been a failure to comply with EU procurement law in respect of two of the contracts we reviewed which left the council open to legal challenge”. 

The auditor found no formal tendering process had been followed in the awarding of the first contract for winter gritting services in 2015. 

While the council approached four suppliers for the contract, two were unable to provide quotes for services. 

Econ – which was awarded the contract – said it would be able to provide the services for £809,770 per annum and based on this the total cost of the seven-year contract was £5.668m, according to BDO. 

Econ was formally offered the contract on the 21 May 2015. The contract was signed in July, with services commencing in November 2015.

However, CCC Contract Procurement Rules require an EU tender to receive at least five respondents, or an exemption must be obtained. CCC did not receive five respondents, nor did it receive exemption. 

Furthermore, the audit report said due to the cost of the contract, it should have been published in OJEU and “put to some form of competition”.

The second breach of procurement law regarded a consultancy services contract awarded to V4 Services Ltd in 2016. 

Payments worth £92,857 were made to the company between 1 July 2016 and 31 July 2016. These payments, the audit report said, were “effectively a modification to the contract with the company which terminated on 30 June 2016”, which was “in breach of public procurement law.”

The report continued: “The council should have estimated the value of the modification, combined this with the value of the previous contract and run a new procurement process.

“Failure to do so was unlawful under public procurement law.”

No legal action is being taken over the breaches.

A CCC spokesperson told Supply Management the issues were due to be discussed in the council’s Audit and Accounts Committee meeting on 25 November. 

In a report to the committee, the council said it had sought legal advice and in light of this it would be letting the gritting contract run until it expires in May 2022.

The report said CCC had strengthened its procurement arrangements and established its own dedicated procurement team in 2020, having made use of a shared services arrangement since 2010.

An “experienced local government head of procurement was engaged on an interim basis to provide leadership during 2021” and permanent appointments to the procurement team had been made, the report said.

The spokesperson said: “The improvements made to the procurement process include the implementation of enhanced controls attached to our contract register, accounting systems, waiver requests and approvals processes.  

“We have taken legal advice to ensure we act lawfully in relation to the historic issues identified and are committed to monitoring the improvements that have been made over the last six years, reporting this to our auditors and Audit Committee."

The council said it had responded to all BDO recommendations made in relation to the contracts and to its wider procurement process. 

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