Award of an arrangement - proper contract optional

The Wooden Spoon PH

Mr Mustard has written about vanity awards before and last year he did some follow up enquiries to see if there was any correlation between free dinners and work for suppliers.

20 July 2012

Dear Barnet Homes

Go Awards - Birmingham Metropole- March 2012

Four staff and two residents attended.

Did the hotel cost include the cost of the dinner? (my experience is that these dinners often cost £90 a head)

How much was the dinner and who paid for it please?

Yours sincerely

Mr Mustard

20 August 2012

Dear Mr Mustard

The hotel cost did not include the cost of the dinner. The dinner for the Barnet Homes staff and residents who attended the event was paid for by echelon Consultancy, which had facilitated the procurement process and with which the award entry had been compiled.

This is recorded in the Barnet Homes register of gifts and hospitality, with an assumed cost of £80 per head. We do not have a record of the actual costs incurred by echelon Consultancy for the dinner.

Yours sincerely

Barnet Homes

20 August 2012

Dear Barnet Homes

Thank you for that answer.

I have a new question please.

Please provide a list of all payments made to Echelon since 1 April 2006 ( date, amount & what for ) and a copy of all contracts signed with them since the same date.

Please also provide a copy of the register of gifts and hospitality for the year ended 31 March 2012.

Yours sincerely

Mr Mustard

18 September 2012

Dear Mr Mustard

Please find following the response to your enquiry below.

1. Payments to Echelon

Echelon delivered a number of different projects and services associated with Barnet Homes’ procurement and mobilisation of repairs and maintenance contractors through nine lots. The total value of the contracts, based on the ten years covered, exceeds £200million.

i) Strategy works:

Date	Amount (excl VAT)	Area of work
24/06/2010	£5312.21	Strategy works
24/06/2010	£5327.90	Strategy works
29/07/2010	£1375.00	Strategy works
27/08/2010	£732.00	Strategy works
26/10/2010	£1082.00	Strategy works

Subtotal: £13,829.11

Following a competitive quotes process, Echelon was commissioned to draft a strategic asset management procurement strategy for Barnet Homes. The costs also included a workshop with Barnet Homes staff and a workshop with residents who had expressed an interest in being involved in the procurement process.

ii) Procurement process

Date	Amount (excl VAT)	Area of work
30/11/2010	£4089.00	Procurement
23/12/2010	£6977.00	Procurement
28/01/2011	£5237.00	Procurement
15/02/2011	£16343.00	Procurement
14/03/2011	£9448.00	Procurement
20/04/2011	£22834.20	Procurement
26/05/2011	£8673.30	Procurement
24/06/2011	£6972.00	Procurement
09/08/2011	£3354.20	Procurement
13/09/2011	£5036.00	Procurement
21/10/2011	£1065.00	Procurement
23/11/2011	£3505.00	Procurement

Subtotal: £93,533.70

Echelon oversaw the procurement process for all nine asset management contracts. It is standard practice to use an external agency for procurement of this scale. Work included overseeing the procurement model, contract documentation, facilitating evaluation of PQQs, cost evaluation, feedback to senior management and the Barnet Homes board, more than 40 onsite interviews and inspections, tender clarification and the appointment of contractors.

iii) Mobilisation – Project Management

Date	Amount (excl VAT)	Area of work
17/08/2011	£6825.00	Mobilisation PM
13/09/2011	£9750.00	Mobilisation PM
17/10/2011	£5850.00	Mobilisation PM
23/11/2011	£8125.00	Mobilisation PM
13/01/2012	£5850.00	Mobilisation PM
23/01/2012	£10400.00	Mobilisation PM
22/02/2012	£9750.00	Mobilisation PM
19/03/2012	£9750.00	Mobilisation PM
13/04/2012	£10400.00	Mobilisation PM
18/05/2012	£9100.00	Mobilisation PM
15/06/2012	£650.00	Mobilisation PM

Subtotal: £86,450

Echelon supplied a project manager to oversee the mobilisation of the nine contracts. This was agreed following a benchmarking exercise. Costs are based on an agreed day rate of £650.

iv) Mobilisation – IT consultancy

Date	Amount (excl VAT)	Area of work
12/12/2011	£6320.00	Mobilisation IT
13/01/2012	£3860.00	Mobilisation IT
29/02/2012	£7800.00	Mobilisation IT
23/03/2012	£7150.00	Mobilisation IT
13/04/2012	£10075.00	Mobilisation IT
18/05/2012	£9750.00	Mobilisation IT
15/06/2012	£5200.00	Mobilisation IT
18/07/2012	£3250.00	Mobilisation IT
16/08/2012	£1950.00	Mobilisation IT
06/09/2012	£650	Mobilisation IT

Subtotal: £56,005

The IT consultancy role was commissioned to ensure fully functioning IT interfaces between all contractors and Barnet Homes following the departure of the former Barnet Homes Head of IT at a critical juncture in the mobilisation process. Costs are based on an agreed day rate of £650.

v) Miscellaneous

Date	Amount (excl VAT)	Area of work
26/10/2010	£2845.50	Advice on emergency repairs cover
29/09/2011	£3360.00	Mobilisation general
01/06/2012	£3500.00	Asset Management Improvement Partnership joining fee and annual membership
20/07/2012	£350.00	Management training

Subtotal: £10,055.50

Echelon provided advice on options for commissioning emergency cover for Barnet Homes repairs services after our former repairs contractor, Connaught, went into administration. The general mobilisation sum covers a further workshop with Barnet Homes staff, staff from the successful contractors and residents involved in the procurement process, along with associated reports.

Total payments: £259,873.31 (excl VAT)

2. You are welcome to view our hospitality and gifts register. Please contact the Company to arrange an appointment.

Yours sincerely

Barnet Homes

18 September 12

Thank you for the lovely lists of payments which appear to be fine.

The other part of my question was that I asked to see copy contracts. Are there any formal written contracts with Echelon? and if there are, please send copies to me with signatures redacted.

Yours sincerely

Mr Mustard

19 September 12

Dear Mr Mustard

There were no formal written contracts with Echelon

Yours sincerely

Barnet Homes

8 October 12

Dear Barnet Homes

Sorry to keep asking questions but this is an endlessly fascinating subject. I am sure we will reach the end of the chain soon.

What items did you benchmark and what against?

A simple list will suffice as I do try not to ask overly long questions (or a copy of the benchmarking paperwork if it can be easily copied without too many redactions).

Yours sincerely

Mr Mustard

5 November 12

Dear Mr Mustard

In response to your enquiry below, I will now provide the requested information.

Barnet Homes approached an alternative supplier to quote for (ii) the Procurement Process.

We also approached an alternative supplier to quote for iii) Mobilisation Project Management.

Echelon were appointed in both instances following receipt of the alternative quotes. The appointment of Echelon for iv) IT consultancy was informed by the alternative quote received for iii) Mobilisation Project Management.

Yours sincerely

Barnet Homes

So there you have it. A slap up meal and probably unlimited booze for 6 people in Birmingham sits badly with over a quarter of a million pounds worth of work for which only one alternative quote was obtained (and at least three written quotes was the requirement at Barnet Council at that time) and for which there is no written contract recording what exactly the terms are.

This terribly loose arrangement should be giving kittens to senior management and internal auditors. They really ought to know about it already from internal controls and have put a stop to it as well as any attendance at Awards Dinners.

Yours frugally

Mr Mustard