PP122/07
S t a n d i n g C o m m it t e e o n P u b l ic A c c o u n t s
R e p o r t o n t h e t e n d e r p r o c e s s RESULTING IN THE AWARD OF A CONTRACT TO ICE MANN FOOD SERVICE LTD
In Tynwald
R e p o r t O f t h e St a n d i n g c o m m it t e e ON PUBLIC ACCOUNTS ON THE TENDER PROCESS RESULTING IN THE AWARD OF A CONTRACT TO ICE MANN FOOD SERVICE LTD
To: The Honourable President of Tynwald and the Honourable Council and Keys in Tynwald assembled
Members of the Committee
Mrs C M Christian MLC (Chairman) Mr Q B Gill MHK (Rushen) (Vice Chairman) Mr D M W Butt MLC Mr G D Cregeen MHK (Malew & Santon) Mr R W Henderson MHK (Douglas North) Mr J P Watterson MHK (Rushen)
The powers, privileges and immunities relating to the work of a committee of Tynwald are those conferred by sections 3 and 4 of the Tynwald Proceedings Act 1876, sections 1 to 4 of the Privileges of Tynwald (Publications) Act 1973 and sections 2 to 4 of the Tynwald Proceedings Act 1984.
Copies of this Report may be obtained from the Tynwald Library, Legislative Buildings, Finch Road, Douglas 1M1 3PW (Tel 01624 685516, Fax 01624 685522) or may be consulted . at www.tumoald.org.im
All correspondence with regard to this Report should be addressed to the Clerk of Tynwald, Legislative Buildings, Finch Road, Douglas 1M1 3PW.
Remit of the Committee
(1) There shall be a Standing Committee on Public Accounts.
(2) The Committee shall have -
(a) a Chairman elected by Tynwald, (b) a Vice-Chairman elected by Tynwald, (c) four other Members elected by Tynwald,
and a quorum of three Members.
(3) Members of Tynwald shall not be eligible for membership of the Committee, if, for the time being, they hold any of the following offices: President of Tynwald, Speaker of the House of Keys, member of the Council of Ministers, member of the Treasury Department referred to in section l(2)(b) of the Government Departments Act 1987.
(4) The Committee shall -
(a) (i) consider any papers on public expenditure and estimates presented to Tynwald as may seem fit to the Committee;
(ii) examine the form of any papers on public expenditure and estimates presented to Tynwald as may seem fit to the Committee;
(iii) consider any financial matter relating to a Government Department or Statutory Body as may seem fit to the Committee;
(iv) consider such matters as the committee may think fit in order to scrutinise the efficiency and effectiveness of the implementation of Government policy; and
(v) lay an Annual Report before Tynwald at each December sitting and any other reports as the Committee may think fit.
(b) be authorised in terms of section 3 of the Tynwald Proceedings Act 1876 and the Standing Orders to take evidence and summon the attendance of witnesses and further to require the attendance of Ministers for the purpose of assisting the Committee in the consideration of its terms of reference.
(5) The Chairman, Vice-Chairman and any member of the Committee shall not sit when the accounts of any body of which that person is a member are being considered.
2
1 . INTRODUCTION
1.1 This matter was raised by Mr P Karran MHK, who at that time was a member of this Committee, in November 2005 as a result of a complaint received by him from Clucas Foodservice Ltd (see Appendix 1). That complaint raised a number of issues, some of which were outwith the remit of this committee. We have therefore concentrated our investigation on the tender process and confidentiality issues, a summary of which is as follows:
a. In December 2004 expressions of interest were sought by the Department of Health and Social Security and the DHA Prison Service from companies to supply food provision and catering products (Appendix 2).
b. The closing date for submissions was 11 April 2005.
c. In a court case on 5th May 2005, Mr Kearns of Icemann Ltd advised the court that he had been verbally notified that his company had been awarded the contract (Appendix 3). In addition, Mr Priest of Jack Frost (Frozen Foods) Ltd maintains that he was advised by one of the DHSS homes on or about 4th May, that they had lost the contract (Appendix 3).
d. However, the recommendation of the tender evaluation group was not signed until 12th May 2005, the day on which the new contracts came into effect (Appendix 4). Later that day the Catering Services Manager telephoned all the companies who had tendered to advise them of the outcome. Also, on that day letters were hand-delivered to the successful companies and hand-delivered to the unsuccessful companies the following day.
The concern was, therefore, that the tender process may not have been carried out correctly.
1.2 We are concerned that it has taken us so long to complete this Report but, yet again, one of the reasons has been the time taken to obtain responses from Government Departments. We have recently advised the Chief Officers' Group that the Committee will no longer tolerate this practice and that, in
3 future, Departmental staff will be brought before the Committee to account for any failure to respond in a timely manner.
2. ACTION TAKEN BY THE COMMITTEE
2.1 Internal Audit
Prior to referring this matter to the Committee, Mr Karran had expressed his concerns to Treasury, which resulted in an investigation by the Chief Internal Auditor, His report is set out in Appendix 5.
2.2 Department of Health and Social Security
We wrote to the Department requesting their comments and their responses to that initial letter and to subsequent requests from the Committee are set out in Appendix 6.
2.3 Department of Home Affairs
We wrote to the Department requesting their comments and their response is set out in Appendix 7.
2.4 Icemann Limited
We wrote to Mr Kearns asking who had verbally notified him of his successful tender and his reply is set out in Appendix 8.
2.5 Jack Frost (Frozen Foods) Ltd
We wrote to Mr Priest, asking which of the homes had advised him that his company had not been successful and his reply and the reply from the home in question are set out in Appendix 9.
4 3. CONCLUSIONS
3.1 Timescale
3.1.1 The advertisement for expressions of interest was placed in newspapers on 18th December 2004, for contracts to commence on 1st April 2005. However, by the time that the replies had been audited, the tender invitation documents were not sent out until 21st March 2005 with a closing date of 11th April 2005. The date of commencement of the contracts as set out in the tender documentation was 1st May 2005.
3.1.2 However, the costs analysis and tender evaluations were not completed until 2nd May and the recommendations were made that day. The contracts were signed on 12th May and all the tenderers advised that day. DHSS confirmed that the contracts commenced on 12th May (Appendix 4). However, Mr Kearns of Icemann Ltd was under the impression that the contract commenced on 1st May 2005 (Appendix 8) as stated in the Form of Tender documentation.
3.1.3 We queried with DHSS whether it was practical to inform successful tenderers on the day on which the contract was due to commence and the reply is set out in Appendix 6.
3.1.4 We have noted the DHSS comment that "It is not Noble's Hospital's policy to provide prior notice to contractors in order to enable them to made contract supply preparations; the tendering process makes it explicit that only contractors who are able to supply from the proposed award date will be considered", but we have doubts about the efficiency of this policy. A company may confirm in their tender that they are able to supply the required goods, but it is not reasonable to expect every tenderer to have sufficient stocks of everything which may be required (particularly goods which have a limited shelf-life) on the day of commencement of the contract, just in case they may be notified on that day that they have been successful. In addition, it is inconsiderate to expect an existing contractor to maintain sufficient stocks to enable him to continue to meet his contractual obligations should his contract be renewed, but give no prior notice of the termination of his contract.
5 3.1.5 DHSS advised us that the delay in appointing suppliers was the result of "additional time taken regarding the clarification and evaluation of the tender submission/7 However, as can be seen in paragraph 3.1.1 above, it appears that the timetable was unrealistically tight.
3.1.6 We therefore recommend that Departmental tendering procedures should commence sufficiently in advance of the expiry of existing contracts to ensure that all tenderers can be given reasonable prior notice of whether or not their tender has been successful.
3.2 Tender Evaluation Process
3.2.1 In his Internal Audit Report (Appendix 5), Mr McGreal stated that "there is no requirement to declare the financial condition of the company at the time of the tender, or to declare any ongoing legal action by which the company would be wound up."
3.2.2 Within the tender contract document there is a clause (19) which clarifies the contract with regard to issues of insolvency; however this relates to awarded contracts already in place. That clause is set out in the letter from DHSS dated 6th June 2007 in Appendix 6. That letter also advises that a revised procedure for undertaking financial checks on potential suppliers has now been introduced.
3.2.3 We appreciate the point made by DHSS that the level of prior financial checks on tendering companies varies "according to the type and nature of the contract and the degree of associated risk !' However, even in the case of suppliers of easily obtained goods, there is a risk of an interruption of supplies and also potential financial loss, in the case of a company becoming insolvent.
3.2.4 We therefore recommend that all tender documentation should include a requirement for all tenderers to declare any ongoing legal action which may have a material effect on the company. 3.3 Confidentiality
3.3.1 Both the Department of Health and Social Security and the Department of Home Affairs have carried out an investigation as to how any leak of information could have occurred prior to the official notification date of 12th May, but have not been able to conclude how that leak had occurred, although the investigative process was not vigorous. The Chief Internal Auditor in his report (Appendix 5) also investigated the leak and concluded "7 am unable to provide any answers to Mr Salmon's question regarding how and when the Directors of Icemann Food Services Limited learned of the Company's success. The only direct contact was with the General Manager by telephone and by letter addressed to the Company."
3.3.2 DHSS stated in their letter dated 6th June 2007 (Appendix 4) that "Hospital staff are regularly reminded about the importance of confidentiality. The matter is clearly covered for all government employees within the Isle of Man Government financial regulations." However the only reference to confidentiality regarding the tender process in Financial Regulations is in FD8, para 10, which states "A person whose tender is unsuccessful should be notified of that, fact, and, if so required, be given an indication of why the tender was not accepted, but without breaching the confidence of the successful tenderer."
3.3.3 There is no suggestion that in this case information was leaked because that information was not perceived as being confidential. However, we do believe that clear guidance should be given as to what information is to be classed as confidential.
3:3.4 We therefore recommend that all those privy to information about tenderers should be advised at the outset that no information should be released to any tenderers other than by those officers authorised to do so, who shall not release any information prior to the official notification date.
7 4. SUMMARY OF RECOMMENDATIONS
4.1 Paragraph 3.1.6
We therefore recommend that Departmental tendering procedures should commence sufficiently in advance of the expiry of existing contracts to ensure that all tenderers can be given reasonable prior notice of whether or not their tender has been successful.
4.2 Paragraph 3.2.4
We therefore recommend that all tender documentation should include a requirement for all tenderers to declare any ongoing legal action which may have a material effect on the company.
4.3 Paragraph 3.3.4
We therefore recommend that all those privy to information about tenderers should be advised at the outset that no information should be released to any tenderers other than by those officers authorised to do so, who shall not release any information prior to the official notification date.
5. TREASURY RESPONSE
In accordance with a resolution of Tynwald in July 2006, Reports of the Public Accounts Committee which contain recommendations are now submitted to Treasury for a response prior to the Report being laid before Tynwald. That response is set out in Appendix 10.
C M Christian Q B Gill D M W Butt G D Cregeen R W Henderson J P Watterson
November 2007
8 APPENDIX 1
Clucas Foodservice Limited 54 Duke Street, Douglas, Isle of Man. IM1 2AR Tel 01624 673644. Fax. 01624 628240 / Mr. William Bennett f Bennett Roy \ Chapter House Douglas Isle of Man.
3rd November 2005
Dear Mr Bennett
Further to our meeting of Friday 29 October 2005.1 write to inform you that we have made a formal request to Mr. Peter Karran MHK to ask the Public Accounts Committee to investigate the circumstances surrounding the awarding of the contract to provide frozen foods to the Hospital and Prison.
I and my fellow directors at Clucas Foodservice Limited are now convinced that the events at the High Court on the 4th and 5th of May 2005 in which Mr. Kearns and Mr. Lloyd stated under Oath that they had been contacted by the Department verbally before the 4th of May to tell them that Icemann Foodservice Limited had been awarded the contract, when the facts as stated by Clive McGreal the Chief Internal Auditor directly contradicts this, are so extraordinary that it is only by an investigation by the Public Accounts Committee can the truth be established.
If Mr. Kearns and Mr.Lloyd had spoken the truth on the 4th and 5th of May at the High Court then this casts serious doubts about the probity of the tendering processes in that it has been stated by Mr. McGreal that it was not until the 12th of May that the contract was actually awarded.
We are also equally concerned that this contract which was stated in Court to be hugely important to the profitability of Icemann was so conspicuously absent from any information presented to you in your capacity as expert valuer.
How can it be said that the figure you arrived at in your efforts to value the shares could be a fair price, when such an important facet of your valuation had been kept from you by the directors, one of which stood to benefit so much from keeping the knowledge of that contract from you?
How can the Accounts of Icemann be accepted as a basis for any valuation when we have protested for so long about the affairs of the Company and the manner of the keeping of its accounts. We had refused to accept them at Annual General Meeting, we refused to reappoint the Auditors, and we refused to accept Mr. Lloyd as a director of Icemann, and under Oath on the 4th and 5th of May 2005 at the High Court he confirmed that he was not a director of Clucas Foodservice Limited and therefore could not be a director of Icemann under the terms of the Shareholders Agreement.
Clucas Foodservice Limited Company No 85818C, 54 Duke Street, Douglas, Isle of Man IMl 2AR Clucas Foodservice Limited 54 Duke Street, Douglas, Isle of Man. IMI 2AR Tel 01624 673644. Fax. 01624 628240
We ask, does any legally binding document have any value at all when Mr. Keams and Mr. Lloyd pick and chose what to accept only when it is of material benefit to them personally?
I and my fellow directors keep fully in mind that we have an obligation to our Company to obtain the best price we can for its assets, and the shares in Icemann were an important asset. We have seen to what lengths Mr. Kearns and Mr. Lloyd are prepared to go in attempting to exclude us from a Company in which we had fifty percent of the issued share capital. We have also been made to be observers to a process in which that fifty percent was to be valued and a fair price established.
We think it a cause for the gravest concern that significant information was with-held to thé detriment of the valuation of our shares, yet so obviously to the financial benefit of Mr. Keams, we finally observe that it was Mr. Keams himself who was the possessor of that information, yet was provably silent when it came to the point of revealing it to you.
We are determined to take all appropriate steps to have this matter resolved, fairly and justly, and to that end we will apply all our efforts.
Please accept our thanks for all your consideration shown to us, we greatly appreciate this.
We look forward to seeing a copy of your conclusions and opinions which we understand you will be sending to The Deemster Doyle for his consideration, I would be very much obliged if you would send a copy of this to Mr. Mark Moroney as soon as you are able to do so bearing in mind that anything from you Will have a significant impact on the costs hearings which are scheduled to be heard In early December 05.
Yours truly
John Bannister Director Clucas Foodservice Limited.
C.C. Mark Moroney Mr, Peter Karran MHK (Member of the Public Accounts Committee).
2.
Clucas Foodservice Limited Company No 858! 8C, 54 Duke Street, Douglas, Isle of Man IMI 2AR APPENDIX 2
■
*fU December 23, 2004 ISLE OF MAN COURIER THE COMPANIES ACTS 1331 TO 2004 DECLARATION OF DISSOLUTION THE COMPANIES ACTS 1931 TO 2004 PURSUANT TO SECTION 273AU0) OF THE COMPANIES ACT 1931 LIST OF COMPANIES THAT HAVE APPLIED FOR A DECLARATION OF 037735C - Rimini Properties Limited DISSOLUTION 045223C - Instant Investments Limited 050121C - Paramount Marketing Limited PURSUANT TO SECTION 273A(3)(a) OF 05G173C - Shortt & Associates Limited THE COMPANIES ACT 1931 G56418C - Anglo Logic Systems Limited 067793C - Withypool Limited 0691OOC - Keston Lim ited 105224C - A.M.T.S. Trading & Design 076516C - Technology & Design. Inc Company Limited Lim ited 098240C - AARONMAC LIMITED 080613C - Spectrum Systems Limited 079696C - Amazon Lim ited 081060C - Woodfield Enterprises Limited 083738C - Valencia Resources Limited 094124C - APPLEDENE PROPERTIES 085493C - Select Venture Limited LIMITED 090250C - Baroal Enterprises Limited 036640C - Asia Africa Traders Limited 093107C - Woodgate Properties Limited 065289C - Assisi Limited 097155C * Preceptor Limited 055686C - BODMIN OIL CORPORATION 097156C - Ganders Limited LIMITED 100772C - Mac Girr Limited 083450C - Bushton Associates Limited 103753C - Arden Commercial Projects Ltd 032310C - C. N. A. Limited 1Q5135C - Trivia Limited 028551C - Calypso Maxine Limited 105416C - Information Systems 055242C - Canary Islands Holiday Club Engineering Limited Limited 107488C - Omega Technology Limited 097965C - Crown Overseas Ventures 1085Q2C - Lifeline Aggressive Growth Lim ited Limited 108080C - CYPRESS SPRINGS 108967C - Tbm Limited DEVELOPMENTS LIMITED 109255C - Lifeline Stepped Growth Limited 035077C - Diamond Enterprises Limited 109864C * Rexgal Lim ited 104663C - Emerald Professional Services Lim ited 082507C - Equity One Limited In accordance with the above section, the 070682C - Free Trade Agency Limited Financial Supervision Commission hereby 099364C - G P BUSINESSGROUP declares that the above companies are LIMITED dissolved. 099538C - Gabes Limited 087977C - Halcyon P roperties Lim ited This 21st day of December 2004 048095C - Hallach Properties Limited 048354C - Hallborough Properties Limited CLTVE OLDALE 105710C - HILDICK WINE CONSULTANTS ASSISTANT MANAGER LIMITED THE COMPANIES ACTS 1931 TO 2004 109907C - HONEST ART LIMITED 105656C - HORTICULTURAL CONCEPTS DECLARATION OF DISSOLUTION LIMITED 055303C - ICG Lim ited PURSUANT TO SECTION 273A(10> OF 106218C - INTERLINK LIMITED THE COMPANIES ACT 1931 050650C - Klotz Lim ited 020070C - Kynney Lim ited 018248C - Langtry Corporate Services 092702C - La Pirogue Yachting Limited (l.O.M.) Limited 107682C - LATHERONWHEEL LIMITED 038451C - Sabre Securities Limited 085931C - Mandarine Securities Limited 050306C - Zafiro Investments Limited 066506C - Milton Castle Limited 061709C - Settlement l Nominee Co. 029004C - Normande Investment Company Lim ited Lim ited www.iomtoday.co. je
Isle of Man Department of Health and Social Security And the Isle of Man Department of ______Home Affairs______KdeofMan GoHomtt i M p i i Expressions of interest are sought for the supply of food provisions and catering products to BOROUGH OF DOUGLAS (STRAND LANE) (TEMPORARY Nobles Hospital, Braddan PROHIBITION OF THROUGH TRAFFIC) ORDER 2004
The Isie of Man Department of Health and Social The Department gives notice that ii Security and the Isie of Man Department of intends to make an Order the effect 01 which will be to prohibit the use t< Home Affairs. vehicular traffic of that section of Stranc Lane in the Borough of Douglas between its junction with Granville Street and a poinl Seek expressions of interest from suitably at the rear of No. 39-40 Loch Promenade. qualified and experienced organisations to The Order will come into force at 6.00ara provide the supply of food provisions and on Tuesday 4th January 2005 and continue catering products for the period 1 st April 2005 to in force until 6.00pm on Monday 4th July 2005 or until the demolition and rebuilding 31st March 2008. work of the former Esquires’ site is completed whichever is the earlier. Organisations wishing to be considered for Access will j>e available to this section oi inclusion on a select tendering list for this Strand Lane from Howard Street. contract must submit their interest formally by RC0796C returning submissions in accordance with the expressions of interest document. This BOROUGH OF DOUGLAS (LABURNUM document is obtainable from Mr. Gary Brain, ROAD) (TEMPORARY PROHIBITION OF Purchasing Office, Nobles Hospital, Braddan. THROUGH TRAFFIC) (No 2) ORDER (Tel: 650780) 2004
Submissions must be returned in the envelope The Department gives notice that it intends to make an Order the effect ol provided within the expressions of interest which will be to prohibit the use to document to the above named on or before 7th vehicular traffic on Laburnum Road, January 2005. Douglas, between its junction with Springfield Road and its junction with Groves Road D. Peters, Catering Manager, Isle of Man DHSS. The Order will come into effect from 6.00am on Monday 3 January 2005 and continue in force until 6.00pm on Sunday 23 January 2005 or until the sewer and Email services installation work is completed, whichever is the earlier. SelB it! Turn your unwanted An alternative route will be via the new | section of Alder Road linking pulmsfi Rnarf ^ a a * old your
APPENDIX 3
(Oo!^\Ai-W
MR CORLETT: I think the final thing we need to update the Court on is the issue of future prospects of the company. You’ve heard me mention to Mr Seaward any possibility of the company engaging in a quite lucrative or possibly profitable contract Can you enlighten the court as to the current position with your negotiations with the Government about a contract? MR KEARNS: Yes Sir. The current position is we have had verbal notification that we have been successful in achieving contracts to supply the Isle of Man hospitals and the Iste of Man Prison. We are anticipating a turnover for these contracts to be in the region of four hundred to five hundred thousand pounds per annum and the contract is on a three-year basis with the opportunity to extend that after the three year term for a further two years. Frozen & Q Chilled Foods Distributors s SPRINGHAM PARK • BRADDAN • ISLE OF MAN • 1M2 2QU Telephone: 01624 621444 • Facsimile: 01624 663705 S?4\dn Mrs M Cullen Clerk of the Public Accounts Committee RECEIVED Legislative Buildings DOUGLAS 0 8 FEB 2006 Imi 3PW
7th February 2006
Dear Mrs Cullen
Hospital/Prison Tender April/Mav 2005
We are writing to you to express our concern that the procedure for the above tender was not carried out in the proper fashion.
We understand that an Audit Manager, Mr Tony McMeiken from the Internal Audit Division of The Treasury, has sent a report to Mr P Karr an MHK in a letter dated 16(h September 2005, signed by the Chief Internal Auditor, Mr Clive McGreal.
There appears to be some errors within this report:-
a) We supplied frozen foods on the previous contract. The total value was not £250,000, as stated in the report, but closer to £400,000.
b) The award of the contract was disclosed to us a week or more before the 12th May 2005. We were informed by one of the Homes during the first week of May, - probably 4 May,- that we had been unsuccessful, and that the contract had been awarded to Icemann. We did not approach anyone at that time for fear of prejudicing our tender.
c) We have since become aware that the Directors of Icemann already knew on 4th May that they had been awarded the contract. See the transcript of a Court case, Clucas v Icemann on 4th and 5th May 2005.
We are concerned that the Tender procedure was not carried out correctly, and that the Audit Manager had been misinformed for his report.
We understand that your Committee is meeting to discuss this matter during the course of next week. We would be willing to produce the above evidence to you, but we think that you already possess it from another complainant. Please keep us informed of your progress.
Yours sincerely
M S PRIEST Managing Director
Directors: MS. Priest, ß.Sc, (Hons) F.C.I.O.B., M.C.F.A., J. K, Ciuuhiiv APPENDIX 4
S 3 4 l d l l o
Isle of Man G overnm ent Rheynn Slaynt as Sbickyrys Y Theay
From David Killip Chief Executive
Our Ref: CE/QWJ Your Ref: C/Pa Chief Executive's Office Markwell House Market Street Douglas, Isle of Man, IM1 2R2 17 July 2006 Telephone (01624) 685004 Fax (01624) 685130 E-Mail [email protected]. im Mrs M Cullen L ^ Clerk to the Committee Office of the Clerk of Tynwald Legislative Buildings Douglas Isle of Man IM I 3PW
Dear Mrs Cullen
Re: Public Accounts Committee: Contract for the Provision of frozen food to Noble's Hospital
Further to your letter dated 12 July 2006 I confirm that the new contracts came into effect on 12 May 2005.
Yours sincerely
^ r David Killip : Chief Executive
M.irfvvvvHI House, Market Street, Douglas, (sic of Man IMI 2RZ Wo.bsitß: www.gov.im/dhss
APPENDIX 5 I Internal Audit Division The Treasury Second Floor, Heywood House Ridgeway Street, Douglas Yn Tashtey Isle of Man Chief Internal Auditor IMI 1EW Telephone (01624) 686544 Ard-ronseyder Coontaghyn Sthie Fax (01624) 686587 K. C, McGreal e-mail [email protected]
Private and Confidential Contact : TonyMcMeiken Mr P Karran MHK House of Keys Your Ref : PK/ejm Legislative Buildings Douglas Our Ref : IAD/TM/2006/172 IMI 3PW
Date : 16 September 2005
Dear Mr Karran Icemann Food Service Limited - Mr P Salmon I refer to your letter dated 6 September 2005, addressed to the Minister for Treasury, and your letter dated 13 September 2005, addressed to the Chief Financial Officer, regarding issues raised to you by Mr Philip Salmon, by his letters to you dated 23 August 2005 and 13 September 2005. These concern the award, to the above company, of the contract to supply frozen products to the Department of Health and Social Security Catering Services and the Department of Home Affairs Prison Catering Service.
This matter has been referred to the Internal Audit Division for review and delegated to Mr Tony McMeiken, Audit Manager, to undertake appropriate enquiries.
I have conducted my review in the following manner, and offer my answers to Mr Salmon’s questions below:-
• Held meetings with the Purchasing Manager, Noble’s Hospital, the DHSS Catering Services Manager, and the DHSS Provisions Supervisor. All relevant documentation is held at the Noble’s Hospital site.
• Examined the tender and contract documentation and obtained explanations and comment, from the above persons, to understand and establish the processes undertaken.
• Attended the offices of Isle of Man Newspapers to verify the placing of newspaper advertisements.
• Held informal telephone conversations with appropriate officers of the Social Security Division, Contributions and Compliance Section; the Customs and Excise, Debt Management Unit; and the Income Tax Division, Compliance Group.
I have not undertaken a full and comprehensive audit of this contract, rather I have sought to address the questions raised by Mr Salmon within as short a timescale as possible.
1 Background Information
The contract in respect of frozen produce is one aspect of the overall contract for the supply of food and food related products (the other aspects of the contract are fresh meat, fresh fruit and vegetables, bread and yeast products, janitorial products, confectionary, dairy products, cheese products, dry products, and vending/beverage product).
This is the second occasion that contracts have been awarded to supply both the DHSS and Prison Service catering requirements and is the result of an initiative, facilitated by the Value for Money Committee, for both bodies to obtain best value.
Answers to Mr Salmon’s Questions
• Advertisements seeking expressions of interest from “suitably qualified and experienced organisations to provide the supply of food provisions and catering products” (see attached copy of the draft advertisement) were prominently placed within the advertisement sections in the following newspapers
Isle of Man Examiner 21 December 2004 Page 25 28 December 2004 Page 24 Isle of Man Courier 23 December 2004 Page 40 30 December 2004 Page 35 Manx Independent 24 December 2004 Page 32 31 December 2004 Page 24
The closing date for submission of “expression of interest” was 7 January 2005.
Sixteen submissions, all from on-Island companies and covering all aspects of the contract, were received at the office of the Deputy Purchasing Manager (DHSS) who coordinated the procurement exercise.
Invitations to tender were sent to each company, the closing date for submitting tenders being 12 April 2005.
A comprehensive company profile questionnaire was sent to each company as part of the “expression of interest” document. This requests that the company provide details of the Company Chairman, Secretary, Managing Director, Status and Founded Date, Company Turnover (for the last 2 years). There is no requirement to declare the financial condition of the company at the time o f the tender. or to declare any ongoing legal action by which the company could be wound up.
Within the tender contract document there is a clause (19) which clarifies the contract with regard to issues of insolvency; however this relates to awarded contracts already in place.
(A copy of the Standard Tender Document and Standard Conditions of Contract for the Purchase of Goods is attached for your information)
Five companies submitted tenders for the frozen products aspect of the contract.
2 The contract is awarded for a three year period.
On 12 May 2005, the recommendations of the tender evaluation group were endorsed by signature of the Chief Executive of the DHSS. This action signalled the awarding of contracts to the various successful companies.
The Catering Services Manager had attended the Chief Executive’s office at 10am that day (12 May 2005), also as a signatory to the recommendation document, and estimates his return to his office as 11.30am. At some time after his return he informed the Provisions Supervisor.
The Provisions Supervisor made telephone calls to each of the companies, beginning “approximately lunchtime”, successful companies first, although no records were kept regarding the precise time or duration of each individual call.
The Provisions Supervisor recalls that during his call to Icemann he had spoken to the General Manager, Mr Scott Howard.
A letter was prepared for each company, dated 12 May 2005. The letter to each of the (9) successful companies was hand-delivered by the Provisions Supervisor on the afternoon of 12 May 2005; and hand-delivered to the unsuccessful companies the following day.
* The successful company for the supply of frozen products was Icemann Food Service Ltd.
• I am unable to provide any answer to Mr Salmon’s question regarding how and when the Directors of Icemann Food Service Ltd learned of the company’s success. The only direct contact was with the General Manager by telephone and by letter addressed to the Company.
Observation
On the basis of the documentation I have viewed, and the explanations provided to me, the SS and DHA Prison Service has been compliant with Government’s Financial Regulations, Financial Direction 8 (Tenders). The requirements were specific, extensive and complex tender evaluations have been performed, and audits of supplier premises have been undertaken - each to ensure that the best supplier in terms of price and standards has been selected. Each unsuccMsful company has been offered the opportunity to meet with officers to receive feedback on their failed bid.
Should you wish further clarification of any point, please give myself or Mr McMeiken a
I hope that this report is of some use to you as a contribution towards addressing the full content of Mr Salmon’s letters. a
Yours sincerely
Clive McGreal CPFA MAPSA Chief Internal Auditor
APPENDIX 6
Isle of Man G overnm ent i N T4 Vtf. 4-tiii Rheynn Slaynt as Sbickyrys Y Tbeay
From S 9 ‘4 | d , B David Killip ^ ' Chief Executive
Our Ref: CE/HSS12/JS Your Ref: C/PaS24/mc Chief Executive's Office Markwell House Market Street Douglas, Isle of Man, IMI 2RZ 7 June 2006 Telephone (01624) 685004 Fax (01624) 685130 E-Mail [email protected] Mrs M Cullen Clerk to the Committee Office of the Clerk of Tynwald Legislative Buildings RECEIVED Douglas Isle of Man 1 3 JUN 2006
OFFICE OF THE CLERK OF TYNWALD Dear Mrs Cullen
Subject: Public Accounts Committee: Contract for the Provision of Frozen Food to Noble's Hospital and the Isle of Man Prison
Further to your letter dated 10 May 2006 which requests further information regarding the above mentioned contract, I am pleased to respond as follows:
Question i. 'A timetable of the meetings held on this matter '
I have enclosed a copy of the outline Procurement Timetable for the total contract.
Question //. 'The date when the decision on the contract was made'
The Tender recommendation document was completed on 2 May 2005. The initial contract sign off by the Chief Executive of the Isle of Man Department of Health and Social Security took place on 12 May 2005.
Question Hi, ’Copies of all relevant Minutes and aii relevant documentation from the Evaluation Committee. '
I have enclosed a number of documents which I believe are relevant to this specific contract, including a summary of the cost submissions from the tendering organisations and a copy of
Markwell Hour>e. Market St/oet, Coup,Ins, Isle of Man (Ml 2RZ Website: www.f;ov.mi/dhsr> isle of M a n ;;.;g -, /<;. & € j Government' :,. w-.. ■, • '.-• ^ ■■=■ •.••^. •:••- .,■■-* . ^-n ..¿v : . *.. Rheynn Slayntas Shickyrys Y Theay
the supplier audit reports for all suppliers tendering for the Frozen Foods element. The cost summary is provided to assist the Public Accounts Committee in this matter, no permission has been sought or obtained from any of the tendering organisations to release this information into a Public Domain and therefore I would request that this price sensitive information is maintained as Strictly Confidential.
Included within the enclosures are copies of the three primary schedules of the total contract specification document, which incorporates the standard and special conditions of contract, whilst not specified, the guiding principles which applied to this contract were as follows: Collaborative Government Purchasing and Aggregated Demand Benefits, Clearly Defined Specifications and Terms o f Contract, A Comprehensive Product Range, Rationalisation o f the .fp* Supply base to Reduce Administrative Costs, Fair and Open Competition, Supporting the Local Economy, The Achievement o f Best Value.
Should you require any further information please do not hesitate to contact me.
Section 1 Outcome Procurement Timetable Section 2 Cost Analysis Frozen Produce Section 3 Relevant Supplier Audit Notes Section 4 Form of Offer/Terms and Conditions
Markwell Hou«\ Mnrket Street, Douglas, bit- o f Man IM I 2RZ Procurement Timetable
A detailed timetable has been produced detailing the key tasks, events, and dates required for the successful conclusion and award of contracts to suppliers of food and food related products
Key Process Personnel
Ian Cooil (IC) Purchasing and Supply Manager Derek Peters (DP) Catering Services DHSS Steve Ward (SW) IOM Prison Service Member of Social Services (SS) Andy Pennington, (AP) Catering Stores Gary Brain (GB) Purchasing Helen Quayle (HQ) Catering Quality
Key Task Key Completion Date Personnel Stage One ■ - ; “■ Preparation of tender documents inc DP, IC, SW, November 04 specifications, special conditions and Prison GB, AP conditions
Preparation of supporting documents (audit DP, AP, November 04 tools, product listing)
Expression of Interest placed in local GB 17th December 04 press Review of returned expressions and audit DP, GB January 05 timetable produced
Carry out Audit on all suppliers who AP, HQ, SW, February 05 Expressed interest in supply SS
Initial audit reviews DP, SW, SS, February 05 HQ, AP
Stage 1 Exercises complete February 05
Stage Two Tender Procedure and timetable to be agreed IC, DP March 05 with all parties Tender invitations sent out Closing Date ll"1 April OS
Tenders received by Operations Operations 11th April 05 office (Director of Operations Nobles) Office
Tenders opened by B.Scott, GB 12th April 05 Procurement Timetable
Stage Three
All tender documents passed to Purchasing GB 12,B April 05 for cost analysis
Completion of cost analysis GB April 2005 Quality Evaluation and Supplier audit report HQ, AP, SW, April 05 (final) SS
Whole tender evaluation DP, SW, GB, 2na May AP Award recommendations 2nd May 05 Award of Contracts DHSS CEO 12® May 05 Debrief of process IC, GB, SW, June 05 AP Isle of Man G overnm ent Offish yn Ard-Sheckteragh
From David Killip Chief Executive
Your Ref: Chief Executive's Office Our Ref: DK/QX1/EG Markwell House Market Street 04th October 2006 Douglas, Isle of Man IMI 2RZ Telephone (01624) 685004 Fax (01624) 685130 E-Mail ceo@dhss,Qov.im
Mrs M Cullen Clerk to the Committee ) Office of the Clerk of Tynwald Legislative Buildings 1 1 OCT 2006 Douglas Isle of Man IMI 3PW
Dear Mrs Cullen
Re: Public Accounts Committees Contract for the provision of frozen food to Noble's hospital - Ref. 107/3
Further to your letter dated 27 September, 2006, regarding the Contract for the provision of frozen food to Noble's Hospital. I am pleased to respond as follows:-
1. It is normal procedure for tenderers to be advised of award decisions at the same time, usually in writing.
2. It is not Noble's Hospital's policy to provide prior notice to contractors in order to enable them to make contract supply preparations; the tendering process makes it explicit that only contractors who are able to supply from the proposed award date will be considered; the contract evaluation process verifies the state of contractor readiness.
3. It is our opinion that contract award decisions should be notified to successful and unsuccessful contractors at the same time. We believe that this approach is fair and consistent with best practice.
Yours sincerely
David Killip Chief Executive
Chief Executive's Office I M.'irkwoll Hou'ie. Market Street. Douglas. Isle of Man IM1 2R2 Website; www.^ov.im/clhss
DEPARTMENT OF HEALTH AND SOCIAL SECURITY Offish yn Ard-Shecktera¿
From David Killip Chief Ëxecutive
Our Ref: Your Ref: DK/90.07/LL Chief Executive's Office Markwell House Market Street Douglas, Isle of Man, IM1 2RZ 6 June 2007 Telephone (01624) 685004 Fax (01624) 685130 E-Mail ceo@dhss,qov.im Mrs M Cullen Clerk to the Public Accounts Committee Office of the Clerk of Tynwald RECEIVED Legislative Buildings Douglas 0 7 JUN 2007 Isle of Man IM1 3PW OFFICE OF THE CLERK OF TYNWALD.
Dear Mrs Cullen
Re: Public Accounts Committee: Contract for the provision of frozen food to Nobfe's Hospital
Thank you for your letter dated 3 May 2007 concerning the above. The information you requested is as follows: a. What involvement did the Department o f Home Affairs have in this tender process and the award of the contracté?
The Department of Home Affairs were fully involved through the whole of the tendering process, including the award of contract stage.
b. Why was the tender process not completed in time for the new contracts to commence on 1st April 2005 and what system is in place to ensure that tender procedures are commenced in time to be completed before the expiry o f existing contracts?
(i) The delay in the award of contract was due to additional time taken regarding the clarification and evaluation of the tender submissions.
(ii) The Hospital Operations Directorate has reviewed the tendering procedures applied within the organisation; from April 2007 all contracting notification and facilitation will be managed through the Purchasing office for all supply contracts and via the Estates Services Division for Maintenance contracts, this will bring quality assurance to the process and shift responsibility for compliance to the Purchasing section.
Chief Executive’s Office Markwell House, M arket Street, Douglas, Isle of M an IM1 2RZ Website: www.gov.im/dhss
PSQe 1 O f 4 DEPARTMENT OF HEALTH AND SOCIAL SECURITY Offish yn Ard-Shecktera$
A new tendering pack and guidance document is under development for introduction later this year, this will compliment the Isle of Man Government Financial regulations.
The previous process implies the responsibility for all aspects of the contract resides with the Budget Holder.
c. Can you please supply the timetable o f the previous tender procedure for these contracts2002.
In 2005 we introduced a procurement timetable, we did not have an agreed timetable in 2002. Q d. What date were the invitations to tender sent out in 2005?
The tenders were sent out originally on 21st March 2005.
e. As the existing contracts expired on 31st March 2005, were Jack Frost given an extension to their contract and, if so, for how long?
Jack Frost continued to supply the Hospital from 1st April 2005, through to the contract being awarded. Officially signed and approved purchase orders were issued for all those transactions.
f The tender documentation stated that contracts were due to commence on 1st May; why was this delayed until the 12* May?
See b (i).
. ^ g. Could you please supply a copy of clause 19 of the Tender Contract Document
The following extract represents clause 19 of the Tender Standard Terms and Conditions of Contract:
Insolvency
The Department may at any time by notice in writing summarily terminate the Contract without compensation to the Contractor in any o f the following events:
(a) i f the Contractor being an individual or where the Contractor is a firm any partner in that firm shall at any time become bankrupt or shall have a receiving order administration order or interim order made against him or shall make any composition or scheme or arrangement with or for the benefit or his creditors or shall make any conveyance or assignment for the benefit o f his creditors or shall purport to do so or if in Scotland he shall become insolvent or notour bankrupt or
Chief Executive's Office Markwell House, M arket Street, Douglas, Isle of M an IM I 2RZ Website: www.gov.im/dhss
Page 2 of 4 DEPARTMENT o f h e a l t h a n d s o c ia l s e c u r it y Offish yn Ard-Sbecktera£
any application shall be made for sequestration o f his estate or a trust deed shall be granted by him for the benefit o f his creditors: or
(b) if the Contractor being a company shall pass a resolution or the Court shall make an order that the company shall be wound up (except for the purpose of amalgamation or reconstruction) or i f an administrative receiver on behalf o f a creditor shall be appointed or if the Court shall make an administration order or if circumstances shall arise which entitie the Court or a creditor to appoint an administrative receiver or which entitle the Court to make a winding-up order or administration order provided always that such termination shall not prejudice or affect any right of action or remedy which shall have accrued or shall accrue k thereafter to the Department: or ) (c) the Department may terminate this Contract forthwith by notice in writing to the Contractor if the Contractor is in breach o f this Contract and shall have failed to remedy the breach within (30) days o f receipt o f a request in writing form the Department to remedy the breach such request indicating that failure to remedy the breach may resuit in termination o f this Contract,;
h. What financial checks are carried out on companies before awarding contracts to them?
This type of financial enquiry varies according to the type and nature of the contract and the degree of associated risk. The Hospital service has drafted a new supplier enquiry form which will introduce a more consistent approach; it is hoped that local contractors will comply with this document.
i. Tenderers are asked to supply turnover for the last two years. Do they have to verify these figures by submission o f audited accounts?
In the case of highly technical or high value contracts very detailed checks are performed including a review of the audited accounts for the previous two years, in the case of low value consumables or easy to replace supply contracts the checks are relatively simple and do not include a detailed financial analysis of companies' accounts.
j. Are all persons involved in the tender process advised that no information should be released prior to the award ofcontracts?
Hospital staff are regularly reminded about the importance of confidentiality. The matter is clearly covered for all government employees within the Isle of Man Government financial regulations.
k. Did your Department make any enquiries to try to ascertain the source o f the apparent leak in this case? I f not, could you please make these enquiries now?
Chief Executive's Office Markwel! House, M arket Street. Douglas. Isle of Man IM I 2RZ Website: www.gov. im/dhss
P3Q6 3 Of 4 DEPARTMENT OF HEALTH AND SOCIAL SECURITY tele of Man G overnm ent Offish yn Ard-Shecktera
Informal investigations were undertaken at the Hospital and Hospital management remain satisfied that no leak, real or apparent, emanated from the Hospital. If the Committee is able to provide any specific information which sheds further light on the sources or nature of any leak, then the Department would be happy to follow up that information by view of renewed enquiries/investigation.
Yours sincerely
Chief Executive's Office Markwell House, M arket Street, Douglas, Isle of Man IM1 2RZ Website: www.gov.im/dhss
Page 4 of 4 DEPARTMENT OF HEALTH AND SOCIAL SECURITY Offish yn Ard-Sheckterag
From David Killip Chief Executive
Our Ref: Your Ref: DK/90.07/JAS Chief Executive's Office Markwell House Market Street Douglas, Isle of Man, IM1 2RZ 30 July 2007 Telephone (01624) 685004 Fax (01624) 685130 Mrs M Cullen E-Mail [email protected] Clerk to the Public Accounts Committee Office of the Clerk of Tynwald Legislative Buildings Douglas Isle of Man RECEIVED I M I 3PW 3 1 JUL 2007 OFFICE OF THE Dear Mrs Cullen CLERK OFT YN WALD Res Public Accounts Committee: Contract for the provision of frozen food to Noble's Hospital
Further to your letter dated 11 July, 2007,1 am pleased to provide the following information for completeness.
The process of investigation was as follows :
In the absence of definitive information regarding the nature of the leak, it was agreed that an informal investigation would focus on the matter of confidentiality; it was made clear to all concerned that the purpose of the investigation was to ascertain if any confidential contractual matters had been advised (inadvertently or purposely) prior to the contract award letters being issued.
The following investigatory process was undertaken at Noble's Hospital.
1. The contract principal Mr Derek Peters, Catering Manager, and Mr Ian Cooil, Purchasing Manager, were separately interviewed by Mrs Scott, Acting Hospital Manger.
2. Mr Peters and Mr Cooil then interviewed the other hospital staff concerned on an individual by individual basis.
3. Mr Peters contacted staff from other sections involved in the process in an attempt to ascertain if any contract details had been released from those areas.
Chief Executive’s Office Markwell House, M arket Street. Douglas. Isle of Man IM I 2RZ Website: www.gov.im/dhss
DEPARTMENT OF HEALTH AND SOCIAL SECURITY Isle of Man G overnm ent ft r I / i y » Cl tan ('inn/n Offish yn Ard-Shecktera
The investigation concluded that, to the best of the organisation's knowledge, no contract award notification had been purposely or inadvertently released from DHSS sources prior to the contract award date.
Chief Executive's Office Markwell House, M arket Street, Douglas. Isle of Man IM1 2RZ Website: www.gov.im/dhss
DEPARTMENT OF HEALTH AND SOCIAL SECURITY
APPENDIX 7
Chief Executive's Office Department of Home Affairs "Homefield" Rheynn Cooishyn Sthie 88 Wood bourne Road Douglas Isle of Man Will Greenhow IM2 3AP Chief Executive Telephone (01624) 694346 Isle of Man Fax f016241 621298 Government
Re i } I y s Elian V a tt n i n
4th September 2007
Mrs M Cullen 2 6 SEP 2007 Clerk to the Public Accounts Committee Legislative Buildings Douglas IMI 3PW
Dear Mrs Cuilen
Re: Contract for the Provision of Frozen Food to Noble's Hospital
Further to my previous letter, of 17th July 2007, on the above subject, I would like to advise the Committee that following my request to the Acting Prison Governor that he investigate the contents of your previous letter 11th July 2007, that he has advised the following:
1. Mr S Ward, Catering Manager at IOM Prison, has close involvement in the frozen food contract as he was one of two managers who carried out an audit of Icemann's suitability as supplier. This, occurred before any decision to award the contract was made.
2. The recommendation to award the contract to Icemann was a panel decision and the Acting Prison Governor has found no evidence to support any claim that DHA personnel had any greater influence in this than anyone else.
3. The Acting Prison Governor has found no evidence to support any allegation that the source of any advance notification that Icemann had been awarded the contract was DHA staff.
4. Although another member of the Prison Catering Team signed the recommendation that Icemann be awarded the contract (catering officer Martyn Killey), this is dated 16th May. The information is alleged to have been "leaked" during the week commencing 2nd May and therefore it is unlikely that Mr Killey could have been the source of any leak of information.
5. Mr Ward believes that the time lapsed between the end of the previous contract with Jack Frost and the award of the current contract to Icemann could have been the cause of some confusion. Whether this confusion led to any leak of information is conjecture, however, this could be a learning point for the future. Whilst the Acting Prison Governor did not undertake a full formal investigation the evidence he did collect, in his opinion, does not support any allegation of improper conduct by any particular member of staff involved in the award of the control.
I would like to thank the Committee, once again, for bringing this matter to my attention.
Yours sincerely
Will Greenhow Chief Executive APPENDIX 8
\
Your ref: C/PaS24/mc
25lh July 2006
Mrs M Cullen Clerk to the Committee Public Accounts Committee Office of the Clerk to Tynwald Legislative Buildings Douglas IM1 3PW ^
Dear Mrs Cullen,
Public Accounts Committee: Contract for the provision of frozen food to the Isle of Man Government DHSS and the DOHA Prison Service
Please accept my apologies for the delay in responding to your letter dated 31st May 2006.
Due to the time that has elapsed between the awarding of the contract and the date of your inquiry I regret to inform you that I am unable to ascertain who advised this office that the Company had been successful in securing the contract for the supply of frozen foods to the DHSS and Prison Service.
I can confirm, however, that I received information from my office which indicated that our tender had been successful the week commencing 3 rd May 2005. The Company had received several inquiries with regard to product availability from various DHSS outlets. This did not appear untoward as the contract was due to commence on 1st May 2005.
I enclose Form of Tender for your information and I trust that this assists with your investigation.
Yours sincerely
J.A.S. Kearns Managing Director
Unit 17 o Snugborough Trading Hslate o Union Mills o Isle of Man o IM4 4LG 0 1624 6737370 f; 0(624 670014 ° froze nl'oucK“) en I erprise.net o www.manxicecreiim.eoin V.A.T. Rcyix trillion No: 001 ()5380f o Registered in the isle ot* Mini, Registrili ion No: I024S2 Supply of Food and Food Related Products to the Isle of Man Government Department of Health and Social Security & Department of Home Affairs Prison Service
Form of Tender
1.0 Contract Period
The contract is due to commence on 1st May 2005 for a continuous period of 3 years. The Isle of Man Department of Health and Social Security Catering Service and Department of Home Affairs Prison Services (hereafter known as the DHSS & Prison Service). A further extension to the contract period of one year will be considered three months prior to 31st March 2008
2.0 Ordering Method/Service Requirements
Individual accounts, invoices and statements relating to this contract are to be addressed in accordance with the instruction shown on the official orders received. There shall be no minimum order quantity or value.
3.0 Carriage
Carriage must be free of charge for all transactions associated with the contract.
4.0 Quality Control Procedures (see Special Conditions)
All products supplied under this contract must comply to the relevant British/European standards and may be tested for compliance during the tenure of this contract. The “Isle of Man Government Departments” identified within this contract reserve the right to reject any product which in their opinion does not conform to the specification”
5.0 Alterations
The tenderers must not modify any of the documents. Any alteration which the tenderers thinks is necessary must be detailed in a separate letter accompanying the tender 6.0 Samples
Samples may be requested after your tender submission
7.0 Discrepancies
Information supplied to tenderers as part of the procedure is supplied in good faith. However, tenderers must satisfy themselves to the accuracy of such information and no responsibility is accepted for any loss or damage of whatever kind or howsoever caused, arising from the use by tenderers of such information
8.0 Deliveries
All deliveries must be made free of charge to the DHSS & Prison Services
9.0 Contract Specific Conditions
9.1 The successful supplier will be required to provide “free of charge” to meet the changing demands of the service any additional unit deliveries or individual ward area deliveries as required by the contract administrator. Any requirement under this heading will be fully negotiated one month before the estimated start date of any changes.
9.2 If upon examination of the submitted tender errors or discrepancies are discovered which would affect the tender values or deliverables, the evaluation team will adopt one of the following procedures :
• the tenderers shall be given details of error(s) found during the examination of the tender and shall be given the opportunity of confirming without amendment or withdrawing the tender, or ® amending the tender to correct genuine arithmetic error(s) provided that in this case, apart from those genuine arithmetic errors, no other adjustment, revision or qualification is permitted, or • if the errors are discovered are such that the evaluation team considers that they invalidate the tender they shall disregard the tender
The details o f any actions taken under this condition will be recorded and kept for audit purposes by the contract administrator/s.
APPENDIX 9 cozen & Qui hilled Foods istributors Ser SPRINGHAM PARK • BRADDAN • ISLE OF MAN • IM2 2QU Telephone: 01624 621444 • Facsimile: 01624 663705 S34H'° Mrs M Cullen Clerk of the Public Accounts Committee Office of the Clerk of Tynwald Legislative Buildings DOUGLAS Iml 3PW
6th April 2006 Your ref C/PaS24/mc
Dear Mrs Cullen
Public Accounts Committee: Contract for the provision of frozen food to Noble’s Hospital» the Prison, and Homes.
Further to your letter dated 4th April, I can inform you that it was Cummal Mooar Home who were sorry to hear that we had not been awarded the above contract, and that it had been awarded to Ice Mann. They were under the impression that we already knew.
Yours sincerely
M S PRIEST Managing Director
0 7 APR 2006
OFFIC& OP T.rtE CLERK OF TYNWALD
Directors: M.S. Priest, B.Sc, (Hons) F.C.I.O.B.. M.C.F.A.. J. K. Curphey Registered in the Isle of Man No. 7616 So 4 U n V f T »le of Man Government Shirveishyn Y The, 13th June 2006 Cum ma! Mooar Resource Centre Queens Promenade Ramsey Isle of Man IM81EL Manager: Claire Cummins Telephone: (01624) 814167 Fax (01624) 815467 Email: [email protected]
Dear Mrs Beattie
Public Accounts Committee: Contracts for the provision of frozen food to Nobles Hospital etc.
I have spoken to Doreen Quilliam (Head Cook) regarding the letter received from the Clerk of Tynwald dated 31st May 2006. Doreen told me last May Jack Frost was making a delivery and the driver said “I will see you tomorrow” Winnie Olsen told him Ice Man had got the contract as the kitchen had received a fax, dated 12th May 2005, with a list of new contracts. A representative for Jack Frost came in the following day to talk to Doreen to ask if it was correct that Jack Frost had not got the following year’s contract. Doreen assumed that as the kitchen had been informed so had Jack Frost. Doreen and Winnnie state the date was not the 4th but the 12th, as this was the day the fax was received, this was the first they knew about the change of contracts. The kitchen think Jack Frost found out about the change of contracts from Cummal Mooar, as they had received notification by fax and Jack Frost would have been informed by letter which might have taken a couple of days to receive. The cooks informed Jack Frost in good faith, but with hindsight it would have been best if they had not have said anything I apologise for any upset or inconvenience this has caused, and can assure you it will not happen again
Kind regards
Claire Cummins Resource Centre Manager Cummal Mooar
Social Services Division Hillnry House. Prospacc Hill, Douglas, lük1 oí Man IMI 1 EQ Web'.ite: w w w, (jo v. ¡ tv: /cl bs s
DEPARTMENT OF HEALTH AND SOCIAL SECURITY APPENDIX 10
The Treasury Isle of Man Yn Tashtey Government Chief Financial Officer ReiMys Elian V « n n i n P M Shimmin CPFA Government Office, Douglas Isle of Man, British Isles IM1 3PU Telephone (01624) 685586 Fax (01624) 685662 E-mail [email protected] Private & Confidential Government Website: www.gov.im Mrs M Cullen Standing Committee on Expenditure and Public Quoting Ref: IAD/KCM/CRF Accounts Your Ref: C/Pa524/mc Legislative Buildings Douglas Date: 7th February 2008 IMI 3PW
Dear Mrs Cullen Report on the Tender Process resulting in the award of a contract to Ice Mann Food Service Limited
I refer to your letter dated 27th November 2007 in respect of the Report on the Tender Process resulting in the award of a contract to Ice Mann Food Service Limited and the recommendations contained therein. I wish to advise the Committee of the latest progress in relation to the renewal of this contract.
The Department of Health and Social Security and the Department of Home Affairs (Prison Service), Food Provisions and Catering Products Contract for operation for the period commencing 1st May 2008 until 30th April 2011 is currently being advertised, with the advert appearing in local media week commencing 28th January 2008.
A new expression of interest and invitation to tender pack has already been developed by the Department of Health and Social Security for use during the pre-qualification stage. The formal conditions of contract continue to be subject of development and will be referred to the Attorney General's Chamber for comment prior to contract agreement.
I am advised that this procurement exercise will address those recommendations made by the Committee in its report.
In response to the recommendations made in the report itself Treasury has consulted with all Departments and Statutory Boards in co-ordinating this response as follows:-
Recommendation 4.1 (Paragraph 3.1.6) We therefore recommend that Departmental tendering procedures should commence sufficiently in advance of the expiry of existing contracts to ensure that all tenderers can be given reasonable prior notice of whether or not their tender has been successful.
Response Treasury and each Accounting Officer agree this recommendation and the Value for Money Committee Guidance Note 1 entitled "Competitive Tendering" cited within the Financial Regulations, Financial Direction 8.3 has been revised to incorporate paragraphs to reflect the recommendation. Recommendation 4.2 (Paragraph 3.2.4) We therefore recommend that all tender documentation should include a requirement for all tenderers to declare any ongoing legal action which may have a material effect on the company.
Response Treasury and each Accounting Officer agree this recommendation and the Value for Money Committee Guidance Note 1 entitled "Competitive Tendering" has been revised to incorporate at Appendix C of the document a pre-qualification questionnaire, section 11 of the questionnaire specifically covers Legal Proceedings.
Recommendation 4.3 (Paragraph 3.3.4) We therefore recommend that all those privy to information about tenderers should be advised at the outset that no information should be released to any tenderers other than by those officers authorised to do so, who shall not release any information prior to the official notification date.
Response Treasury and each Accounting Officer agree this recommendation and a statement to ensure that the relevant personnel are to be reminded has been included within the revisions to the Value for Money Committee Guidance Note 1 entitled "Competitive Tendering".
A copy of the revised Value for Money Committee Guidance Note 1 is attached herewith and will be published upon the Government Intranet.
Whilst generally in support of the Committee's recommendations in this instance Treasury would like to express an air of caution that the adoption of additional measures to improve governance and control should be balanced against the Government aim to remove bureaucracy and is sensitive to deterring small businesses from submitting tenders to Government.
If you require any further information please do not hesitate to contact Clive McGreal (685666) or Ruth Fallon (686551).
Yours sincerely
P M Shimmin Chief Financial Officer Value for Money
Guidance Notes No.l
Competitive Tendering
Issued by: The Value for Money Committee
Revised January 2008 Competitive Tendering - Guidance Notes No.l
Introduction
At the latter end of 1998 a small number of purchasing specialists formed a Purchasing Officers Group whose purpose was to identify ways of introducing measures which would lift purchasing standards generally throughout the departments of Government. The Group sought and received the support of the VFM Committee for the work it intended. One area identified as needing formal guidance was in the field of competitive tendering. Although there are tendering and contract specialists scattered around Government, they are few and far between and generally involved in estates works or purchasing management. Many however see competitive tendering as a black art which from time to time they may have to be involved with. This work is intended for them.
The Guidance Notes are intended to help the lay person put together a basic tendering package. For the more complex tender documents or where the goods or services to be purchased are of a significant value it is always advised that you should present your draft tender package to the Attorney General’s Chambers for approval prior to inviting tenders.
Additional copies of the Guidance Notes can be obtained from the Secretary of the Value for Money Committee at:
Internal Audit Division Heywood House Ridgeway Street Douglas IM1 1EW Tel. 686564 Fax. 686587 e-mail [email protected] The Committee intends to publish further guidance notes on varying subjects as and when a need is identified.
C R Fallon Secretary Value for Money Committee January 2008 Competitive Tendering
1. What is competitive tendering?
It is simply a means for buyers to make best use of competitive market forces to obtain the best offer that can be obtained from the market at that particular point in time.
2. When should we seek competitive tenders?
Competitive tenders should be sought when there is more than one source of supply available and the value of the purchase to be made is of sufficient value to warrant this procedure. Financial Regulation FD8 sets out instances where competitive tenders must be sought, which are:
• When the value of a particular purchase is likely to exceed £25,000* in value • Where a repetitive service is required e.g. Window Cleaning Contract, Daily/Weekly/Monthly Catering Service etc. • Where goods have to be specially made and are likely to cost more than £10,000*, such as fitted furniture, information brochures, curtains etc.
Tenders can of course be sought for purchases of smaller values than those indicated above but care should be taken to ensure that the - administrative costs of the tendering procedure, to both the purchaser and seller, do not outweigh the objectives of the exercise, which is to secure the best deal on the day.
*The values indicated are given only as a guide and are subject to change. Financial Regulation FD8 should always be referred to for current values.
3. What information do we need to provide to potential tenderers? ,
We need to provide sufficient information and instructions to ensure that both we and potential suppliers are absolutely clear as to the requirement. Therefore we need to create a tender document or, more properly, the Conditions of Tender. The Conditions of Tender provides potential tenderers with a statement of our requirements (SOR) and should contain all the detail necessary to ensure the correct goods or service will be provided at the time and venue specified. A key element in the tendering procedure is the production of a clear, concise product and/or performance specification. In many instances the intended purchase will be for market standard goods or services such as office furniture, motor vehicles, personal computers etc. In such instances the manufacturers’ handbooks or advertising literature would probably contain all the relevant detail that would need to be included on the tender form. However, where items have to be specially made, are complex or a service is to be provided, a full and comprehensive specification must be included. The complexity of the specification would obviously depend on the nature of the requirement. The technical specification for a prototype aircraft engine would be very complex whereas the specification for a set of curtains should be relatively simple. Besides ensuring that suppliers will have a clear understanding of our requirements the Conditions of Tender provide the base document for tender evaluation.
The Conditions of Tender should: • be clear, concise and unambiguous • be written in such a way so as not to favour one supplier over another (for instance we should not be seeking tenders for a blue right handed widget if it is known that only one company supplies the item in blue and when in reality the colour is immaterial) • not include jargon • not be unnecessarily complicated • not seek terms which could be deemed unreasonable
Besides the requirement itself prospective tenders will need to know the terms and conditions that will apply to any resultant contract, such as:
• duration of contract • frequency of delivery of goods or services • delivery locations • contract price - a. Firm price - no variation for contract term b. Fixed price - allows for variation in price (conditions should be stipulated e.g. in line with increases in Retail Price Index) * c. Costs plus formula for profit d. Costs plus a fixed fee etc. • payment details • penalty clauses for failure to deliver goods or service as per contract • packaging standards • Progress Reports - frequency • Loss or Damage to goods - ownership - reporting period
The above points are for guidance only and they are by no means exhaustive. Accompanying the Conditions o f Tender would be a Form of Tender which the tenderer would complete and sign to make the formal offer. Examples of a Conditions of Tender and a Form of Tender are at Appendix B and Appendix C. More complex tender documents could be in the form of schedules, especially where tenderers may bid for parts of the business rather than the whole.
4. Who should we invite to tender?
This depends on the nature of the goods, materials or services required, their probable cost and the sources of supply available to you. It is Government policy that local suppliers should be favoured where price differentials are marginal. The Council of Ministers has directed that for smaller contracts, local firms should be favoured where the price proffered by them is up to 10% greater than an off-Island company. This would be reasonable for business up to say £2,000 but for sums greater than this the margin should be decreased. For example for an order worth £50,000 a 5% difference may be more appropriate.
5. How and when should we invite tenders?
Where the goods or services required are of a general nature and the sources of supply are plentiful, such as Commercial Vehicle suppliers or Window Cleaning services a public notice should be placed in the press advertising the requirement and advising interested parties to apply for tender documents from a given address or contact number and by a given date (see example at Appendix A). Where the goods or service are of a more specialised nature, such as a Chartered Air Service or for a Marine Biology Service, the advertisement should be placed in a relevant trade journal or specialist magazine.
Where it is known that there is a limited number of suppliers of a particular commodity it may be more cost effective to forward the tender documents directly to those suppliers and invite them to submit bids by a given date.
Included with the tender documents should be a self addressed envelope clearly marked “TENDER” or for better identification, the generic description of the type of tender e.g. “STATIONERY TENDER”. The tender document should specify that tenders are to be returned in the envelope provided or in a plain envelope clearly marked “ ...... TENDER”.
Experience may dictate that although there are a number of suppliers of a particular commodity or service only a limited number of them might have the scale of operation capable of meeting your needs. In such instances a select list of such suppliers should be maintained and tender documents should only be forwarded to those on the select list. However, circumstances do change and periodically the market should be tested to ascertain if those on the list can still meet your needs or, more importantly, if any of those firms originally excluded or newly established firms now qualify for inclusion on your select list.
Tendering procedures should commence sufficiently in advance of the expiry of existing contracts to ensure that all tenderers can be given reasonable prior notice to prepare tenders for submission.
What additional information may we require from potential tenderers?
Basically we need to assure ourselves that companies submitting tenders have the wherewithal to supply the goods or service in the quantity, quality and times specified in the Conditions o f Tender.
The following is indicative of the information we may require:
• financial standing (especially where cost is likely to be substantial) - seek copies of audited accounts for at least the previous year; ....V when was the company established? (it could be that a business has been established purely to win this order); • previous experience of this particular service; • previous experience of individuals to be assigned (cpnsultants, trainers etc.); • qualifications of individuals assigned (consultants, trainers etc.); • number of outlets; • number of employees (especially if providing large volume specially produced goods or a car hire or taxi service etc.); • number of vehicles (car hire, taxi hire, stationery supplier etc.); • hours of business; • provisions for out of normal hours service, contact numbers etc.; • references from previous customers ; • details of maintenance support (whether on-Island support available etc.); • copies of public liability and other insurances.
It is Government policy that local companies tendering for Capital Schemes must be up to date with their payments of: • Income Tax Instalment Payments (ITIP); • National Insurance; • VAT. If, for instance, we are seeking à local stationers to supply stationery to all Government Departments and bodies on request, we need to be assured that those bidding for the business have a scale of operation capable of providing the service. Therefore in the SOR we could ask for information on staff numbers, vehicle numbers, hours of business, weekend working etc.
In addition, each Department should ensure a rigorous pre-qualification document is prepared for issue to each potential tenderer including a section to declare any previous or on-going legal action, a questionnaire may be considered the most appropriate document(see example at Appendix C).
Furthermore, a certificate of non-collusion is required to be completed by each Supplier as an appendix to the form of tender. (See form at Appendix D)
From the onset of the tender process the importance of good record keeping is also noted e.g. all phone calls to be logged.
Where the cost of the goods or service is likely to be substantial and we are unlikely to have much knowledge of potential bidders, we should also seek details of each company’s financial status by asking for a copy of their last audited accounts. Information on a company’s financial standing can also be obtained from companies such as Dun and Bradstreet and Experian Ltd who specialise in providing credit management information on a wide variety of companies. Further information and assistance on how to make contact with such companies can be obtained from the Treasury’s Capital Projects Unit, telephone number 687067.
The selection process
All those officers privy to information about tenderers and/or tender submissions should be reminded at the outset that no information should be released to any tenderers or any other person or agency other than by those officers authorised to do so, those officers in turn must not release any information prior to the official notification date.
Tenders should remain sealed and be kept securely in a locked cabinet until they are due to be opened, which must be after the time and date stipulated in the tender documents for the final receipt of tenders. The Conditions of Tender document should be clearly marked with the final time and date for submission of tenders and should state that offers received after that time and date will not be considered.
The tenders should be opened by the Accounting Officer, or another officer so authorised by the Accounting Officer, in the company of at least one other senior officer.
On opening the tenders, the following details should be recorded:-
• the names of the companies tendering • each companies offer • the names and signatures of persons opening the tenders
Each tender should be checked to make sure that all the information requested has been provided such as the company’s last audited accounts, copies of insurance policies etc. (see section 5 above). Those companies that have not provided the relevant information should be excluded unless an acceptable explanation for the non compliance has been provided, If all the conditions of tender have been satisfactorily and correctly met then the final selection should be based on the lowest quote. If, for some reason, the selection panel wishes to award a contract to a company other than that providing the lowest bid, then its decision must be endorsed by the Department, prior to a contract being awarded. .... _
All tenderers should be given reasonable notice of whether or not their tender has been successful.
Post Tender Negotiation
If, after the bids have been opened, the selection panel wishes to discuss certain aspects of tenderers’ bids with the companies concerned it will enter into Post Tender Negotiation. There could be many reasons for wishing to discuss the bids further including:
• failure of any of the bidders to meet all the conditions of tender; • proposals from one or more of the bidders which were not considered by the purchaser but which may provide an enhanced service; • knowledge of the market suggests that the offers could be improved; • the bidders consider one or more of the conditions of tender to be unrealistic or unworkable; • the bidders express difficulty understanding the exact requirement.
Although post tender negotiating can be entered into on almost every occasion tenders are submitted it can be a costly exercise for both parties and should therefore only be considered if a marked improvement in the cost or service is likely. Also if main suppliers are aware that post tender negotiation is standard practice they could load their initial bids in order to shave a little off later, with no real benefits ensuing.
The Contract
In most cases all that will be required to form a binding contract, following a competitive tendering process, is for a Department to signify its unqualified acceptance of an offer in writing by simply including the statement “we hereby accept your tended5 in its tender acceptance letter. There will of course be exceptions where because of the complexity of the tender, other arrangements may be necessary. Appendix A Case Study 1
A Department wishes to purchase two Trucks with Lorry Mounted Cranes for loading and unloading heavy items of portable pumping equipment at various sites. As a limited number of vehicle makers provide such vehicles a letter will be sent to each inviting them to tender.
The Department of Works PO Box 26, East Quarry Estate, Tenderton, Cumbria PX3 2RT
The Manager Vehicle Company Our ref: Address PostCode Date: 12 January 200X
Dear Sir,
The Department of Works wishes to purchase two medium sized drop side trucks each with a lorry mounted crane as specified in the Conditions of Tender attached. If you wish to tender for this business I would be obliged if the Form of Tender document, which is also attached, could be completed and returned to this office, in the envelope provided, by 12.00 noon on the 16 February 200X.
Yours faithfully
Sheila Johnson Senior Contracts Manager
enc. a) Conditions of Tender b) Form of Tender Tlie Department of Works PO Box 26, East Quarry Estate, Tenderton, Cumbria PX3 2RT
TENDER
For the Supply of two (2) Medium Dropside Trucks with Lorry Mounted Cranes
Conditions of Tender
1. The Department of Works (the Department) requires two (2) medium dropside trucks with lorry mounted cranes as per the following specification:
a) CHASSIS/CAB ® Turbo Diesel engine with a minimum capacity of 2800cc and a power input of 110 bhp. Engine to be compliant to Euro 2 specification. • Minimum carrying capacity 2.5 tonnes • Kerb weight of complete vehicle, (excluding fuel & driver) 3050 kg • Five speed gearbox • Power steering • Two man passenger seat with seat belts to all seals
b) BODY • All steel dropside truck body • Minimum interior length 4.2 metres (14 feet) • Double dropside, removable comer and centre pillars and including steel wings, rope hooks, side marker lights and rear panel reflective markers. • Underfloor of body to be treated with an anti-rust protective coating prior to painting
c) CRANE • Full hydraulic lorry mounted crane chassis mounted behind the cab. • Minimum performance, at short reach, to be 2.0 tonnes @1.5 metres but preference would be given to a larger unit if fitting can be achieved within kerb weight limit
d) GENERAL • Complete exterior of vehicle to be painted in Golden Yellow (BS356) • Rotating Amber Beacon to be fitted to roof of Cab • Fire Extinguisher and First Aid Kit to be fitted 2. The following additional details should be provided:
a) Estimated date of delivery to the Department at the address above b) Warranty details of main vehicle body c) Warranty details of crane
3. Your tender should be returned in the stamped addressed envelope provided or in a plain envelope clearly marked “Tender - Crane Mounted Trucks” and must arrive at this address no later than 12.00 noon on 16 February 200X. Tenders received after this time and date will not be considered.
(Tenders will be treated in the strictest of confidence)
4. Upon delivery and acceptance of the Trucks the Department undertakes to make payment no later than the end of the month immediately following the month that your invoice is received.
5. The Department will notify the acceptance of a tender to the successful tenderer within 21 days of the final time and date for the receipt of tenders.
6. The written acceptance of a tender by the Department shall, upon being posted to the tenderer constitute a binding agreement on the terms and conditions appearing in these Conditions o f Tender.
1. The Department does not undertake to accept the lowest or any tender.
Issued on behalf of the Department of Works by:
Signed:......
Sheila Johnson Senior Contracts Manager
12 January 200X The Department of Works PO Box 26, East Quarry Estate, Tenderton, Cumbria PX3 2RT
P’orm o f Tender
To: The Contracts Manager, The Department of Works, PO Box 26, East Quarry Estate, Tenderton, Cumbria PX3 2RT (the Department)
From: Company Name: having a Registered Business Address at:
...... Post Code Tel. No...... Fax. No.
HEREBY OFFERS if this Tender should be accepted in writing by the Department, to sell supply and deliver to the Department two (2) Trucks with Lorry Mounted Cranes as specified in the Conditions of Tender attached Hereto at the following price: - .... -
...... Pounds (Ex VAT) £......
Delivery Charges...... Pounds (Ex VAT) £......
VAT £......
Total cost ...... Pounds £......
I/We enclose product brochures with full technical details of our vehicles and the fitted cranes.
I/We include a ...... months full parts and labour warranty for the main vehicle bodies
I/We include a ...... months full parts and labour warranty for the lorry mounted cranes The estimated date of delivery of the complete vehicles is ...... /...... I,
Signed:...... (Authorised representative of the Company)
Printed Name:.....:......
Position:...... Date: ...... /...... /...... Appendix B Case Study 2
The Department of Works seeks tenders every three years inviting printing companies to tender for the production of the Department’s quarterly staff magazine Working Together. A public notice will be placed in regional newspapers with a brief description of the requirement and inviting interested parties to contact the Department for further information.
Public Notice No. 348/11
The Department of W orks PO Box 26, East Quarry Estate, Tenderton, Cumbria PX3 2RT
PRODUCTION AND PRINTING OF WORKS DEPARTMENT’S STAFF MAGAZINE
The Department of Works invites tenders from printing companies to produce and print the Department’s quarterly staff magazine.
Companies interested in tendering for this business should, in the first instance, seek further information and tender documentation from :
Sheila Johnson Senior Contracts Manager (at above address) Tel: 01229 717717 Fax: 01229 333333 Email: [email protected]
The final time and date for acceptance of tenders will be 12.00 noon on Monday 15 March 200X The Department of Works PO Box 26, East Quarry Estate, Tenderton, Cumbria PX3 2RT TENDER
For the Production and Printing of the Department of Works Staff Magazine ‘Working Together’
Conditions of Tender
1. The Department of Works invites tenders for the production and printing of its staff magazine entitled Working Together, hereafter referred to as the magazine (see sample attached).
2. The contract for the magazine is for a three (3) year period from 1* April 200X to 31st March 200Y.
3. The magazine to be produced quarterly in January, April, July and October of each year with the first issue due to be issued before the end of April 200X.
4. Each edition of the magazine will consist of 24 A4 pages of text, photographs and graph.
5 . The magazine will consist of black and white print with a spot/shadow colour (alternate quarters of blue, red, gold and green, commencing with blue in the April issue)
6. The Department will determine front cover articles, those articles it wishes to be given prominence and will require certain pages to be reserved for regular recurring features such as crossword puzzles. Otherwise the format of each page will be largely at the discretion of the printer including layout, artwork, type specification and typesetting.
7. The quality of paper to be as per the attached sample or as otherwise agreed jointly.
8. The material for each magazine will be supplied by the Department to the printer by the 15 th day of the month immediately preceding the month of issue.
9. A black and white proof of each edition will be approved by the Department prior to the print run.
10. Each of the quarterly print runs will be one thousand seven hundred and fifty copies (1,750). 11. The magazines are to be batched, labelled and delivered to the following Works Depots and Sections (full address details will be supplied):
450 copies - Works Maintenance Depot (Craghill) 360 copies - Works Maintenance Depot (Staplefield) 260 copies - Works Engineering & Plant Repairs Unit Boltonend) 150 copies - Transport Pool (Martins Croft)
the remainder, as follows, to be delivered to the Department at the address at the letterhead:
180 copies - Engineering Design Section 190 copies - Administration and Clerical Section 60 copies - Finance Section 30 copies - Chief Executives Office 30 copies - Laboratory 40 copies - Security
Total 1,750 copies
12. The recipients, as per the addresses at paragraph 11 above, shall inspect the magazines immediately upon delivery. The magazines shall be deemed to have been accepted unless within 14 days after their delivery, the recipients notify the contracted printer that the magazines were found not to be of the quality or quantity stipulated within the Conditions of Tender herein.
13. Payment for the goods shall be by the end of the month following the month in which the goods are invoiced. Invoices should be forwarded after each print run to the Head of Finance at the Department.
14. Tenders must be submitted in the envelope provided or in a plain sealed envelopeclearly marked “Tender - Working Together” and must reach the Department at the address at the letterhead by 12.00 noon on Monday 15 March 200X.
15. The Department and/or the contracted printer may terminate this agreement by providing one month’s notice, in writing, if the other party is not complying with the terms and conditions herein.
16. The Department will notify the acceptance of a tender within 21 days of the final date for the receipt of tenders.
17. The Department does not undertake to accept the lowest or any tender. Issued on behalf of the Department of Works by:
Signed: ......
Sheila Johnson Senior Contracts Manager
23 January 200X The Department of Works PO Box 26, East Quarry Estate, Tenderton, Cumbria PX3 2RT
Foray* of Tender
To: The Contracts Manager, The Department of Works, PO Box 26, East Quarry Estate, Tenderton, Cumbria PX3 2RT (the Department)
From: Company Name: having a Registered Business Address at:
...... Post Code T el.N o ...... Fax. No.
1. HEREBY OFFERS, if this Tender should be accepted in writing by the Department, to produce and print each quarter of a year, commencing in April 200X, 1,750 copies of the Department of Works staff magazine “Working Together” in accordance with the terms and conditions of the Department’s Conditions of Tender attached hereto at a charge of:
per quarterly print run...... pounds £...... (exclusive of VAT) AT @ 17.5 % ...... pounds £......
Total ...... pounds £......
The above charge includes packaging and delivery to the addresses shown in the Conditions of Tender.
2. The charges at paragraph 1 above will remain fixed for the duration of the three year term unless otherwise agreed jointly by both parties in writing.
Signed:......
Printed name:......
Position: Date: Appendix C Pre-Qualification Questionnaire
For the supply of Food Provisions and Catering Products
Instructions for completion Reference No: XXXXX
1. The completed Questionnaire must be returned by Date:- to: Name:- Address:-
Tel: 01624 Fax: 01624 Email:...... @.aov.im
2. Organisations MUST provide ALL of the information requested below JN HARD COPY or by email if using the electronic version by the above date. Failure to complete all sections of this form may result in exclusion from the tender list.
3. If the responding Organisation is a company and is part of a group of companies, the responses in this Questionnaire must be provided by the Organisation and not by a parent or holding company on behalf of the Organisation.
4. Organisations shall attach, where appropriate; any supporting documents to this Application marking clearly on all such documents the Isle of Man Department of ...... reference number above, the name of the Service Provider and the number of the question in this Application form to which the document refers.
1. Supply Organisation Details
Please provide details of the Organisation completing this questionnaire.
1.1 Full name: ...... 1.2 Address:
1.3 Tel No: 1.4 Fax No:
1.5 Email:
1.6 Contact Name:
1.7 Web address (If available): ......
2. Supply organisations status and company profile
2.1 Please specify below whether you are (please tick):
□ a sole trader □ a partnership
□ a limited company □. a public limited company
□part of a consortium Din association with a group (please provide names of members) (please state names of members)
□part of a holding company □ wholly owned (See Section 3.1)
□other - please state ......
2.2 Services provided
2.2.1 Is your company: a primary producer □ a producer organisation □ a distributor □ an importer □ (Please tick all that apply)
2.2.2 Please list all other services you provide and those provided by the parent company if applicable:
2.3 Company registration number......
2.4 Date of Registration: ......
2.5 VAT registration number: ......
2.6 Managing Director: ......
2.7 Is your company based in the Isle of M an?......
9-8 fc vnnr rnmnanv nw npH hv inrlivirii laic rpciHpnf nn fhp TqIp nf M an? 3. Parent company information
If applicable, please provide the name and address of the ultimate parent or holding company together with the names of other subsidiary companies of the parent or holding company.
3.1 Parent Company
3.2 Other Subsidiary Companies
4. Application
4.1 Please tick the box which applies to your submission.
a) Your organisation is tendering to provide the Goods/Services (delete as appropriate) required.
b) Your organisation is tendering in the role of Prime Contractor and intends to use third parties to provide some of the Goods/Services (delete as appropriate).
4.2 If your answer is (b) please identify intended subcontractors/partners below:
4.3 Please give details of the elements to be sub-contracted and the financial proportion
of the contract involved: ______5. Details of similar contracts
5.1 Please provide details of total contract sales by volume in the previous 12 months of each type of product/service applied for at section 5 of this application.
Product/Service Total sales by volume £...... £...... :...... £...... £...... £...... £...... £...... £......
5.2 Others (please list below)
5.3 Please provide a list of your five largest customers (by total value) held during the last three years with the values, dates and service types;
Name of Customer Period Total value of Type of service sales provided £ £ £ £ £ 6. Distribution (where relevant)
6.1 Do you own your own vehicles? Yes □ No □
6.2 Which company(ies) do you use for delivery?(Please list all).
6.3 Do you distribute across the whole Island? Yes □ No □
6.4 Please advise the distribution temperature of the vehicles? °C {Food Produce Onfy)
6.5 Do you have a product recall system? Yes □ No □
6.6 If yes, please describe how this operates (or append this process to this document):
7. Electronic Trading/Purchasing Cards
7.1 Do you currently process order and payment details between your company and your customers' suppliers by electronic means?
Yes DNo □
7.2 If yes please give brief details?
7.3 Please advise when you will be able to trade via purchasing cards. 8. Quality Assurance
8.1 Name of quality assurance contact: ......
Position: ......
Please give details of all current Quality Assurance certificates obtained, or applied for:
8.2 Have your operations been inspected to any Technical Standard?
Yes n No Q
Standard:...... Grade:...... Date valid until:......
8.3 Have you been audited by any Independent Public Service safety auditors? t
Yes DNo □
Grade:...... Date valid until:......
8.4 Do your suppliers hold any product assurance certifications?
Yes DNo □ .
Standard:...... Date awarded:......
8.5 Please describe below what systems and measures you have in place to ensure the quality of products and service is maintained on a day to day basis, to a level consistent with the specifications for all standards and certificates held. 9. Financial Information
9.1 Has your organisation met the terms of its banking facilities and loan agreements (if any) during the past 12 months?
9-2 If No, what were the reasons and what has been done to rectify such issues
9.3 Has your organisation met all its obligations to pay its creditors and staff during the past 12 months? Yes □ No □
9.4 If No, what were the reasons and what has been done to rectify such issues
9.5 Please provide details of the person in your company who is responsible for financial matters. Include phone number and email address.
Name; Address:
Tel and Fax No: Email address;
9.6 Please provide details of your company's appointed banker. (Please complete in full)
Name: Address:
Tel and Fax No: Email address:
9.7 Please provide details of your company's appointed Auditors/Accountants (Please complete in full)
Name: Address:
Email address: 10. Please enclose au dited accounts and annual reports for each of the last two years to include:
• Balance Sheet • Profit and Loss Account • Full Notes to the Acc:ounts • Director's Report and Auditor's Report • Cash Flow Statement • Statement of Source and Application of Funds
10.1 If the accounts) ^ou are submitting are for a year ended more than 10 months ago, can you confirm that the company as described in those accounts is still trading. Yes □ No □
10.2 The Isle of Me in Government encourages suppliers who will deal in open book accounting, where all costs are declared and can be checked on request. Please confirm your acceptance of open book trading. Yes □ No □
10.3 If Yes to 12.1 pi ease enclose a statement of turnover since the last set of published accounts.
10.4 Please confirm t nat the ownership of the organisation has not changed over the last 12 months. Yes □ No' □
10.5 If the ownership of the organisation has changed during the last 12 months please append a statement detailing those changes.
Please give details of nsurance(s) held
10.6 Employers liability insurance' (s) held Insurer Address:
Policy Number: Extent of Cover: Expiry Date:
10.7 Public Liability insurance' (s) held Insurer Address:
Policy Nürnbër: Extent of Cover: Expiry Date:
10.8 Professional Indemnity Insurance' (s) held Insurer Address:
Policy Number: Extent of Cover: Expiry Date: IX Legal proceedings
11.1 Please state (tick as appropriate) whether you are or have been subject to proceedings in relation to:
□bankruptcy [^arrangements made with creditors □winding up Qsuspended business activities □affairs being administered by a court ¿any analogous situation with creditors (please specify)
11.2 If you have been subject to any such proceedings please explain further below:
11.3 I/We being the Directors o f ...... Limited confirm that there are no known or anticipated events that would prevent the Company from operating as a going concern for the duration of the contract and that the company has sufficient resources to fulfil the terms of the contract.
12. Failure to fulfil obligations
12.1 Please state whether you have ever failed to fulfil any obligations regarding:
□Payment of social security obligations □Taxes (Taxes in accorda nee with the statutory provisions of the Isle of Man Treasury)
13. Sustainability
13.1 Please describe any sustainability issues currently addressed by your organisation (e.g. economic, environmental or social issues)
13.2 Please include any relevant statements or policies concerning Issues of sustainable development, (e.g. environmental, re-cycling, renewable or reusable initiatives) 14. Policy documents
14.1 Please state (tick as appropriate) where you have included your company's policy statement / documents (including copies of any relevant certificates) on:
□Protection of the Environment □Equal Opportunities; and □Health and Safety □Training and Development □Sustainable Development
OR
□ I have not included them because:
14.2 Please also advise to what extent you impose environmental requirements upon your own suppliers.
Please note this document, once competed, may be used to seek references and further evaluation Information.
Service providers are advised that whilst all such documentation is treated confidentially Departments of the Isle of Man Government will on occasion be instructed to provide contract information to members of Tynwald or the Public Accounts Committee.
Please advise what documentation may not be released to those authorities and state a reason. References
Please provide details of three recent contracts you have been awarded for the provision of Goods/Services [delete as appropriate] similar to those required by the Department.
. Customer name and Contact ; Contacte e Date : Contract Names ofsubcontractors address name and - mail contact ' referenceand and or consortjutn : Telephone address awarded brief description members and their,role number of service .\. undertaken l.
2. Disputes
16.1 For the last 3 years, please detail any contracts where there has been a failure to complete the conti where there have been claims for damages, or where damages have been deducted or recovered. Please contracts that have been terminated with you before their natural end. Customer name and Contract référence and brief Date of claim /. contract Reas address description of termination Goods/Services [delete a£ ; appropriate] provided
16.2 Are there any court actions and/ or significant employment tri 3unal hearings outstanding against your organisation? If Yes, please provide details:
16.3 Has your organisation been involved in any court action and/ or significant employment tribunal over the last 3 years?______If Yes, please provide details: This document may not be reproduced in any form for any purpose other than as defined herein, without the express permission of the Isle of Man Government
I confirm that the information contained herein and attached to be correct:
Authorised Signature:
Please Print Name:
Position in Company:
Date:
PLEASE REMEMBER TO INCLUDE ANY ATTACHMENTS WITH THIS FORM APPENDIX D
APPENDIX TO THE FORM OF TENDER
Certificate of Non Collusion
1. The essence of tendering is that the client shall receive bona fide competitive tenders from all Companies tendering. In recognition of this principle, I/We certify that this is a bona fide tender intended to be competitive, and that I/We have not fixed or adjusted the amount of this tender by or under or in accordance with any agreement or arrangement with any other person.
2. In this certificate the word ‘person’ includes any person, body, or association, corporate or un-incorporate and ‘any agreement or arrangement’ includes any such transaction, formal or informal and whether legally binding or not.
Signature......
Name ......
For and on behalf of.
Address
Date
Parliamentary Copyright
available from:
The Tynwald Library Legislative Buildings DOUGLAS Isle of Man IMI 3PW British Isles November 2007 Tel: 01624 685520 Fax: 01624 685522 e-mail [email protected] Price: £8.20 £1=iíís¿g PFS, S nrc fo r 31-60 sheets 744 uuu. b i ndorç.at i c. cor?