QLDC agrees rewrite of contracts policy

Photo: Getty Images
Photo: Getty Images
The Queenstown Lakes District Council has agreed to an interim fix of its procurement guidelines while giving staff six months to rewrite its policy.

At a special meeting yesterday, councillors agreed to allow staff to make direct appointments for contracts, or negotiate with a single provider, when the work is estimated to cost up to $10,000.

The meeting was called in response to the release last week of an internal report that found there had been a "common misconception" among staff it was acceptable to directly appoint consultants to lower-value contracts without a tender process or an approved departure from one.

The report stemmed from the awarding of contracts worth more than $530,000 to Arrowtown consultancy firm ZQN.7 without putting them out to public tender.

It said "a range of QLDC officers" mistakenly believed projects under $50,000 could be negotiated with a sole supplier without an approved procurement plan, including the officer who gave the work to ZQN.7.

Councillors agreed last week to rewrite the four-year-old procurement policy and guidelines.

In his report for yesterday’s meeting, procurement manager Geoff Mayman said councillors had also suggested staff report to next month’s meeting of the audit, finance and risk committee to seek its endorsement for an interim review of the guidelines.

However, staff had since concluded it was "not practicable" to operate under the current guidelines and the interim changes were needed sooner.

Were the existing guidelines to be followed, the majority of purchase orders for goods, works or services would require three quotes or a procurement plan that would need the approval of a general manager or the chief executive, Mr Mayman said.

Such a process would create "inefficiency, a slowing pace of work and frustration, to the point stifling an already extremely busy organisation".

He recommended staff be authorised to directly appoint or negotiate with a sole provider for contracts estimated to cost up to $10,000.

However, a list of activities and types of contracts should be excluded from the interim guidelines because they had been through "robust, open market" procurement processes by either the council or the Government.

Chief executive Mike Theelen said interpreting the existing guidelines in a "literal" sense was problematic, and staff needed assurance as to how to apply them.

Cr Niki Gladding said the interim changes did not go far enough, and there was "zero accountability" if a council officer could award a contract without approval from their manager.

She proposed two amendments: the first, to set a September 2 deadline for the review to be completed, was passed unanimously.

The second, for the awarding of all contracts to require approval with no financial threshold, failed to win support.

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