Elderly home PPP is a direct order, but its label could have been misleading

Bidders for a contested elderly home public-private partnership knew they were being asked for a hefty investment for the provision of beds for the elderly, but could not understand why this unspecified investment was being accorded the bulk of the PPP’s score.

The PPP for a kitchen facility and daily meals for St Vincent de Paul was said to have ballooned into a €274 million ‘direct order’ for a 500-bed extension to the elderly home.

But it turns out the PPP document did contain a specific reference for a long-term care facility – although it is unclear why this most expensive part of the tender did not even earn itself a place in the title of the tender document.

The PPP – legally a direct order despite a contest between tenderers – is the subject of controversy after two catering giants vied for what was originally a €16 million call to provide daily meals to the residents of St Vincent de Paul home for the elderly.

The winning consortium, made of James Caterers and a DB Group company, was said to have clinched the tender by ‘gifting’ the government with the construction of a 500-bed extension to the government home.

The controversy was fuelled by reports in The Times that said the PPP included an unspecified “additional investment” that was said to be an unusual add-on to the delivery of the catering and kitchen – an uncharacteristic ‘gift’ that carried the bulk of the final score (60%), allowing the James-DB Group to scupper the cheaper bid by the Vassallo Group.

But on closer inspection, the contract reveals that the additional investment was specified clearly, even though bidders demanded more information in clarification meetings.

On page 12 of CT2009/2015, the tenderers are told under ‘Additional Investment’ to “include an additional offer over and above those established as mandatory in the tender document and this at no additional cost to the Contracting Authority.”

The section explains how St Vincent de Paul is the only long-term care facility that provides medical and nursing service to huge numbers of residents and that the entity is “challenged with an ever-increasing demand due to various longevity factors, resulting in growing number of older people with an increased level of dependency due to improvements in care and technology.”

The section specified that the additional investment “should be able to enhance this type of care” and that “due consideration should be given to SVP’s role and shall be described in detail in the tenderer’s offer…  at the end of the contract agreement the additional investment shall become the property of the Contracting Authority at no extra cost.”

Tenderers were also requested to submit a detailed proposal of the additional investment and a cost report certified by a warranted independent auditor. The James-DB consortium first offered a 200-bed extension, but in the ensuring negotiations the government side forced the offer up to a 500-bed extension while the consortium would also be paid to manage the extension.

This was accorded 60% of the score, while the provision of three meals daily to the 1,100 residents and 1,090 care professionals for a 10-year period and construction of a new kitchen facility, was weighted at 40%. Both the kitchen and the extension will eventually become government property after at least 10 years.

Additionally, the ‘tender document’ published on 10 November 2015 was already dubbed a Private-Public Partnership, which legally turns the contract into a ‘direct order’.  

In subsequent clarification documents, tenderers demanded clearer answers to the “additional investment” portion after the contracting authority blithely mentioned that the investment had to be related to ‘care’ during a site visit.

During the clarification meeting, a prospective bidder expressed concern that “what is related to care is a highly subjective matter” and demanded that guidelines or some form of example be provided so that bidders could be better placed to formulate this important part of the tender.

Indeed, the tenderers asked why the “additional investment” had not been related to the main aim of the PPP for the provision of meals to the home, which turned out to have a lower score.

The only answer the ministry gave to bidders was to refer to the section on page 12 that gave an overview of the operations at St Vincent de Paul. “Bidders may relate to this information when they are identifying the type of related investment offered with their bid.”

After the direct order was awarded, the Vassallo Group filed an appeal before the Public Contracts Review Board to contest aspects of the decision related to technical aspects of the kitchen and food delivery contract. The appeal was turned down and confirmed by a Court of Appeal earlier in 2018.

Lost in translation

Earlier this week the government said that no direct order was awarded to the consortium tasked to build a 500-bed extension at St Vincent de Paul. The Parliamentary Secretariat for the Elderly flatly denied that a direct order was issued and said the contract was awarded according to procurement rules “and approval from the Contracts Department was sought at every stage.”

But the parliamentary secretariat fails to explain how the same contract was described as a direct order in the Government Gazette of 20 July, 2018.

The direct order was listed under the Family Ministry and indicated as having been awarded on 9 November last year.

The direct order issued by St Vincent de Paul was listed as a contract for “management services of new hospital/ residence (part of public private partnership)” in the Government Gazette. It had a value of €273,649,698 and was awarded to JCL and MHC Consortium.

The statement by the parliamentary secretariat made no reference to this entry in the Government Gazette.