Cyprus Mail

Audit office questions €34 million tender

geniko logistirio

The tender procedure for a €34 million of software the accountant general’s office wanted to roll out appears to have failed to adhere to regulations, an auditor-general’s report published on Wednesday said.

“We have discovered that based on the tender requirements, there was no healthy competition in either of the two tenders for the project in question,” the report said.

Nonetheless, the accountant general’s office rebutted the accusations, saying it had tried to be flexible and mindful of the public interest

According to the report, the €34m contract was signed in November 2018 for the Enterprise Resource Planning (ERP) software.

However the contract was ended in March 2023 when the accountant general’s office said the contractor was unable to meet the requirements.

As a result, the software was never implemented, putting “the public service years behind implementing such an important project”, the report added.

It said that two tender procedures were carried out, the first of which was cancelled after none of the seven participants met the minimum requirements.

In the second tender, the deal was awarded to the sole company that appeared to fit the criteria.

The audit office’s estimation is that despite requests for a deadline extension, the account general’s office rejected this and was then “excessively strict” in rejecting bids.

Despite the obvious delays in implementing the software, the audit office said when it reached out to the account general in 2020 with complaints, the latter did not express any concern and “created the illusion that the project would be implemented on time and efficiently.

“The contractor failed to fulfil its contractual obligations and taking into account that it did not comply with the terms, the accountant general failed to manage the entire situation.”

But the accountant general’s office said it had taken all necessary steps.

It also underlined that it had extended the tender submission deadline for three months and prior to setting out the requirements in the tender, had carried out market research on the matter to help shape the tender specs.

“The process of evaluating the submitted tenders was carried out in accordance with the regulatory framework and included, inter alia, obtaining feedback from the tenderers’ customers,” it said.

According to the audit office’s report, a separate agreement was signed with a third company to implement the transition from the existing FIMAS system to ERP. However, the corresponding amount was deducted from the contract and as such, cannot be used to cut off payments from the contractor as part of compensation to the state.

The accountant general’s office highlighted that following the terminated contract, it has since proceeded to design the strategy for upgrading and replacing the existing systems on a phased basis with the aim of reducing risks during their design and implementation.

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