Direct orders, directly in breach of regulations

Governments routinely break all the rules and regulations they set for everyone else to follow

I suppose it’s a little late to be ‘surprised’ to discover that governments – regardless who actually administers them – routinely break all the rules and regulations they set for everyone else to follow. You would, in fact, have to be pretty darn naive to expect otherwise.

But there is a limit to how brazenly a government can simply defecate on the law, you know. Or at least, there should be.

Take public procurement, now. Last month, it was revealed that various entities falling under the Office of the Prime Minister had issued ‘direct orders’ worth more than €5 million over the past year alone.

These include contracts awarded by the Malta Financial Services Authority (MFSA), the Malta Communications Authority (MCA), the Malta Information Technology Agency (MITA), the Malta Gaming Authority (MGA), the Malta Council for Science and Technology (MCST), and Identity Malta.

Seven of those direct orders were for services worth more than €200,000. One – awarded by MITA – was for more than half a million euros.

Separately, the ‘Corradino Correctional Facility’ – or ‘prison’, as it is otherwise known – directly awarded an IT contract worth €880,000, without a call for tenders, in 2017.

And just last week, we also discovered that three direct orders (this time worth a staggering €11 million) were issued by Wasteserv over the past three years: a €5.4 million contract in October 2017, another worth €5.7 million in December 2016, and one worth €774,000 (presumably in 2015, though it is unclear from the news report).

All this has to be appreciated in the context of a teenie-weenie little fact. There are such things as ‘public procurement regulations’ in this country – as Government should know, seeing as it drew up those rules itself – and any contract worth over €10,000 must go through the Department of Contracts.

There are exceptions, naturally – and I don’t exclude that some of the above examples may even qualify. For instance: a public contract may be directly awarded, with no call for tenders, if it is for a service that can only be conceivably provided by one entity. If, for argument’s sake, there was only one company on the island specialising in pest control – and Government happened to require that particular service – then yes, Government would be legally entitled to bypass ordinary public procurement regulations, and simply hand-pick the company in question.

(Note: it remains debatable whether the above ‘exception’ can still hold, in the post-2004 context of EU membership. I was under the impression that any European pest control agency, in any EU member state, would be eligible to tender for a Maltese public contract. But still, that’s what the regulations say.)

Separately, there is the following ‘Get Out Of Jail Free’ card: “In exceptional circumstances, following the prior written approval of the Minister responsible for that Contracting Authority [...] a Direct Contract may be issued by the Direct Orders Office, for the direct procurement of public works/services/supplies with an estimated value ranging between €10,000 and €134,999.99.”

I find it extremely hard to believe, however, that ALL the above direct orders fall within either of those categories. Take the prisons one, for example. It was for ‘IT services’. Last I looked, there was more than one IT company in Malta. In fact, there are so many that you quite easily trip up on a couple if you’re not too careful.

And the value of that contract was well over SIX TIMES the very utmost limit of €135,000 – which only applies ‘in exceptional circumstances’ anyway.  And I need hardly add that this wasn’t even one of the more expensive public contracts: I’ve already mentioned that some were individually worth over €5 million...

So why, and on what basis, was only one IT company hand-picked for a public contract worth almost €1 million? How does one explain that to all the other IT companies who might have been interested in providing that service? And above all: what guarantee does the taxpayer have – because it might be expedient to remind Government who all that money really belongs to – that those contracts were awarded for all the right reasons ... and not just as a recompense for services rendered, as payback for party donations, as a vote-buying exercise, or simply as a personal favour to a friend?

Meanwhile, another recent PQ revelation concerns the Justice and Culture Ministry’s penchant for direct orders: no fewer than 223 dished out it in the last six months of 2017... which, remarkably, works out at an average of almost one a day.

Admittedly, the amounts involved were less impressive: but again, many of them were above the stipulated threshold, in circumstances which cannot conceivably be described as ‘exceptional’... and most of them were dished out to individuals who are certainly NOT the only people who could provide that particular service.

A few examples: Lou Bondi was paid 54,000 euro for consultancy services to the Arts Council (a contract he was originally given in 2013, and which was renewed last year). Now: as it happens, I’m not one of those who doubt Bondi’s credentials or expertise in that particular department. I, for one, would happily listen to his advice when it comes to music, organising events, and so on. But since when is Lou Bondi the only person qualified for that job? Off the top of my head, I can think of literally dozens of other plausible contenders. Why was none of them even given a chance to apply?

(The question could, of course, be rephrased slightly. How many of those other potential candidates were also inconvenient Government critics, occupying prime time national television slots, who could be permanently silenced for a measly 54,000 euro per annum? But let’s not split hairs.)

With a few minor alterations, much the same could be said for most of the other 223 contracts. Willie Mangion as ‘Cultural Co-ordinator’ for V18, for example: a post worth €20,000 a year. What, are we to understand; that there is nobody at all in this country who is ‘cultured’ enough to co-ordinate V18... apart from Willie Mangion? I mean, come on...

Meanwhile, it should be pointed that only two of the direct orders connected to V18 actually conformed to public procurement regulations. Felix Busuttil was paid €9,800 as Communications Assistant – i.e., fully within the legal €10,000 limit – and there was another one worth €10,000 for ‘Projects Manager Council South’ (whatever the heck that is supposed to mean).

Most of the others, however, are simply inexcusable. What excuse could you possibly have for so blatantly disregarding the rules, anyway? Well... this is the one Finance Minister Edward Scicluna came up with, when his attention was drawn to the matter in parliament last year.

‘There are instances when direct orders of a certain amount can be justified under certain conditions, such as urgent deadlines’, he was reported as saying. I imagine he was actually alluding to this particular paragraph: “In so far as is strictly necessary, when the time-limits for open, restricted or negotiated procedures referred to in the Public Procurement Regulations cannot be respected for reasons of extreme urgency occasioned by unforeseeable events.”

Exactly how ‘V18’ – to stick to that example – can possibly qualify as an ‘unforeseeable event’ is slightly harder to understand. Nor is it clear how any of the other above-mentioned direct orders – except maybe some of the Wasteserv ones, which are indeed overshadowed by a very real (and very urgent) ‘deadline’ – can possibly be made to fit Scicluna’s exception.

But the clincher comes in the next line: “In normal circumstances, contracts of such value should go through the Contracts Department. If this does not happen, whoever was responsible for the decision must be held to account.”

Funny he should say that, because I haven’t seen or heard about anyone being ‘held to account’ for any of those public procurement breaches, or indeed for any other... ever. Have you?

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