An investigation into contracts awarded by the National Security Ministry to Infinite Fusion Technologies Ltd has revealed poor contract management practices employed by the ministry, according to a report published on Wednesday.
Following allegations of wrongdoing in the media, on April 19, 2017, the then National Security minister, Carmelo Abela had requested the Public Accounts Committee to refer the matter to the Auditor General.
In 2015 and 2016, the National Security ministry had awarded two contracts with a total value of €1,038,400 to Infinite Fusion Technologies Ltd. for the upgrading of the network at the Corradino Correctional Facility (CCF) and other related sites.
Although the ministry maintained that the CCF lacked a proper network, resulting in frequent outages, they and the CCF did not provide documented evidence justifying the need for the works undertaken through the first contract, reported the National Audit Office (NAO).
In addition, the NAO stated that additional works undertaken through the second contract further attested to the poor planning process that characterised the commissioning of works.
The National Security ministry justified the additional works as partly the address of variations arising from the first contract and partly the result of a broadening in the scope of the project to include other sites, the Office said.
However, poor interface between the CCF and the ministry in the management of these changes compounded the shortcomings identified.
Furthermore, the NAO underlined that the independent determination of the value of the works that were to be undertaken would have contributed to ensuring value for money.
The ministry relied on bills of quantities arrived at by Infinite Fusion Technologies Ltd rather than an independent assessment of the works required.
To compound this, they failed to source other quotations from suppliers of their choice, which would have been in line with the negotiated procedure adopted.
This would have afforded a greater degree of certainty that value for money was ascertained, claimed the NAO.
The NAO examines the contracts in more depth
The first contract, dated December 18, 2015, was for works valued at €461,103 that were to be completed within six months.
The NAO ascertained that €461,103 were paid; however, the works were not concluded within the stipulated timeframe.
The Office’s attention was also drawn to the proximity of invoices raised and payments made, most notable an invoice for €161,186 dated December 24, 2015 paid that same day.
Although the National Security Ministry indicated that the procurement process was expedited in view of the end-of-year savings that could be allocated to the project, the NAO maintained reservations regarding payments effected without the appropriate certification.
Works commissioned through the second contract, dated December 28, 2016 and due for completion by October 2017, had not been concluded.
Of the contracted amount of €577,296, €472,526 were paid, with pending works estimated at €100,000 to be completed by end 2019. The NAO noted the proximity of invoice and payment dates, with €397,356 paid prior to the signing of the contract.
The National Security ministry contended that the Department of Contracts’ approval had been obtained, the items invoiced were delivered and payment was made to utilise remaining funds.
However, the NAO’s reservations persisted as these disbursements were not regulated by a contract, entailed the advance payment of €68,000 in labour, and no documentation of supplies reportedly delivered were retained.
These factors exposed the National Security Ministry to risks that were not to be borne by government, the Office said.