Ministry failed to ensure value for money in prison IT network contract – NAO

The NAO has confirmed shortcomings by the Home Affairs Ministry in the awarding of a contract for works at Corradino prison


The NAO has confirmed shortcomings by the Home Affairs Ministry in the awarding of a contract for works at Corradino prison.

The Auditor General found that the ministry’s choice of a contractor for the works was questionable, and that it had not safeguarded the government’s interests nor ensured value for money in the awarding of the contract.

The case dates back to December 2015 and December 2016, when the Home Affairs Ministry had awarded two contracts to Infinite Fusion Technologies Ltd for the upgrading of the IT network at Corradino Correctional Facility (CCF) and related sites.

The contracts, valued at €1,038,400 were awarded through direct orders, which prompted allegations of wrongdoing in the press and led to Home Affairs Minister Carmelo Abela requesting that parliament’s Public Accounts Committee refer the matter to the Auditor General.

In its report, published on Wednesday, the NAO found that, in disbursing public funds through the awarding of the contract to Infinite Fusion, the Home Affairs Ministry did not appropriately analyse the needs of the network project, nor did it evaluate the alternatives and ensure that there was a reasonable basis for selecting that particular contractor.

The NAO highlighted that the ministry and CCF has not provided any documented evidence justifying the need for the network upgrade.

Despite the fact that the ministry had maintained there were frequent outages at the prison, no correspondence or reports were presented to the NAO on such frequent disruptions.

Moreover, the Auditor General found that, instead of carrying out an independent assessment of the cost of the works, such cost was calculated by Infinite Fusion.

Ministry should have obtained multiple quotes

Part of the review undertaken by the NAO was on whether procurement was undertaken in compliance with the Public Procurement Regulations.

The NAO acknowledged that security-related concerns that motivated the ministry in seeking exemption from Public Procurement Regulations.

It noted that the Department of Contracts had recommended that the works be contracted through a negotiated procedure.

However, the NAO said that the ministry had still failed to source other quotations from suppliers of choice, which would have been in line with the negotiations procedure adopted.

Lack of planning caused delays

Despite the first contract, worth €461,103 having been paid for after it was signed, the works weren’t concluded within the stipulated six months.

While some of the ministry’s justifications for the delay could not have been foreseen, others could have been anticipated had the works been appropriately planned.

Another element of concern related to the certification of completed works, which although stipulated as a requirement of the contract, was not undertaken by the MHAS in a manner deemed appropriate by the NAO.

Aside from approval for payment noted on invoices, no documentation substantiating the receipt of supplies was provided to the NAO. This concern assumes more significance when one considers that, in one instance, a significant payment for labour was effected in advance.

“In this Office’s opinion, these shortcomings attested to the poor contract management practices employed by the Home Affairs Ministry in its oversight of these works.,” the NAO said.

Second contract not yet completed

As at October 2019, when the NAO’s report was being drawn up, the works commissioned through the second contract dating back to December 2016 had not been completed.

Of the €577,296 contract, €472,526 have been affected, but around €100,000 in work remain pending, with an expected completion date of December 2019.

“Bearing in mind that the contract stipulated completion by October 2017, the envisaged revised target date was deemed indicative of poor planning and weak contract management on the part of the Home Affairs Ministry and the CCF,” the NAO underlined.

The NAO concluded that the basis for the selection of Infinite Fusion was questionable in terms of the circumstances within which the contractor was selected, as well as the fact that no other suppliers of the ministry’s choice were approached to submit a quotation for the works.

Finally, the NAO said that the government’s interests not to have been adequately safeguarded and value for money far from ascertained, largely due to the poor management manifested throughout the process of procurement and in the implementation of works.

More in Business