Here’s an actual situation I welcome your opinion on.
It’s an issue of principle versus what some might call pragmatism.
Lawrence Yule, Chair of the Regional Sports Park Trust (yes, that’s Mayor Yule to most of us) sat down in his Trust capacity with Higgins Contractors, the folks who build so many roads around here.
They said: Give us the contract to build the roadwork in and around the sports park — a job worth $1.8 million — without having to go through competitive tender, and we’ll donate $500,000 to the sports park ($250k “unconditionally”).
Trust Chairman Yule brought this proposal to the Hastings Council, where it was discussed in public-excluded session and the deal was sanctioned by the Council.
The Trust awarded the contract, and with subsequent fanfare, the “gift” by Higgins to the sports park was welcomed and announced by the Trust.
Taking a principled approach, this might look like highly valuable and profitable public contracts, either directly or indirectly controlled by the Council, are “for sale” on the promise of “contributions” to the sports park. Forget competition, transparency, and public tenders … all of which are designed to protect the public interest.
In this case, one might wonder if Higgins only offered a $100,000 contribution, would that have been enough to secure the contract? Or conversely, maybe the Trust Chairman/Mayor should have struck a tougher deal, asking for $750,000!
And who does a potential vendor think they are negotiating with anyway … Trust Chairman Yule or Mayor Yule? Isn’t this role confusion itself problematic … at least sending an undesirable signal to those who hope to do business with the Council or the Trust?
Or is this simply a matter of pragmatism, as Chair/Mayor Yule argues? He says that the Trust/Council understands enough about roading costs to know that the amount proposed by Higgins to do the work was fair. And the $500,000 contribution was a nice bonus to the community.
Says Mayor Yule: “This is a win win sponsorship. Higgins will provide a very competitive price (tested against well known current pricing) and the Regional Sports Park has benefited from $500k from non ratepayer sources.”
But maybe another contractor would have offered a bigger bonus for the same favor.
And in any event, doesn’t this put the Council on a slippery slope? One might think that, by now, they know the “fair” price of everything and every service they procure. Why bother with competitive tenders at all?
And why discuss all this in public-excluded session? The Mayor says it was a “negotiating situation” that required confidentiality. But there wasn’t any negotiating going on … Higgins had said simply: Give us the contract without public tender and we’ll give you $500,000 … as generous corporate citizens.
In my view, it was debated in private because the whole arrangement might prove embarrassing. But maybe I’m a prude.
On Wednesday, to avoid future situations like this, Councillor Bradshaw attempted to pass a resolution simply requiring the Sports Trust to conduct its contracting and procurement according to the same groundrules as the Council itself. Those rules require contracts valued at over $50,000 to go to competitive public tender.
But this approach horrified Councillors Bowers and Speers, who led the opposition to this “bureaucratic” approach. Mayor Yule, speaking in his capacity as Trust Chairman, indicated the Trust would probably have a problem with being required to follow the Council’s rules. Bradshaw’s resolution failed.
Says Councillor Bradshaw: “Competitive tendering is the cornerstone to getting best value for the ratepayers and as such should have been one of the first conditions in the agreement for HDC to fund the RSP Trust. What is required is one consistent rule for all organisations being funded by the HDC. It was a shame that myself and only three of my fellow Councillors agreed.”
What do you think? Should principle or pragmatism have prevailed here? And what about going forward? For example, if a multi-million dollar velodrome is being built?
Should would-be vendors have the expectation that, with a bit of a bonus contribution, they can avoid competitive tendering?
Here is a two-question poll you can take to indicate your view (and comment further if you like).