Contractors to be required to offer quality for SIC jobs

Shetland Islands Council does not require contractors to offer a quality job when they tender for major projects, it has emerged.

The failure has been highlighted recently after contractor Airport Civil Engineering (ACE) had to be replaced on the job of building the £2.5 million Walls Pier following a string of problems.

New Shetland West councillor Theo Smith, who has just retired from the construction trade, told the audit and scrutiny committee today that probably everyone would agree the pier job had “gone badly wrong”.

Now the council’s internal auditors have advised that works contract tenders should be rewritten so that the choice of successful contractor can be based not just on the lowest price but quality as well.

They told the audit and standards committee that under current tendering rules there had been no valid reasons for refusing ACE the contract and to have done so could have resulted in a legal challenge.

The problems and the slow progress on the Walls contract were picked up on by council officials at a very early stage, councillors were told. Internal audit executive manager Crawford McIntyre said officials were “on the case of the company very promptly”.

In an effort to avoid repeats of such failures, the auditors think the council should tighten up. They said: “Current technical and financial processes should be revisited and consideration given to factoring a quality element into all works contract tenders.”

They also think the council needs to be “more vigorous” in its vetting of the technical abilities and financial strength of contractors tendering for jobs.

Councillor Smith expressed full confidence in the replacement contractor for the Walls Pier, Frank L Johnston. It is due to be completed by the end of the year.

However, he said the pier was not the only council project to have gone wrong and revealed that the local construction industry lacks confidence in how the council procures contracts.

He wants the audit and standards committee to look into the process but was advised by chairman Jonathan Wills to go and talk to the officials involved first to see if they can satisfy his concerns.

In response, Mr McIntyre said his internal audit department believed contract compliance procedures were good. “The awarding of contracts is, in my view, done fairly.”

However, he admitted there had been issues on that front in years gone by.

Mr Smith replied: “It is no doubt done by the book but things have gone wrong and that’s what concerns me.”

But Mr McIntyre said those problems had resulted after the contracts had been awarded, not during the tendering process.