One firm gets ministry's millions

By ADAM GIFFORD

The Ministry of Economic Development is giving millions of dollars of software development and support work to a private consulting firm without calling for tenders.

And the money flow seems likely to continue.

The relationship between Neville Harris, the deputy-secretary responsible for the ministry's business services branch, and Jarin Consulting has raised eyebrows among present and past ministry staff.

But Deputy Auditor-General Terry McLaughlin said the situation was not uncommon.

No "hard and fast rules" governed when work needed to be put out to tender, McLaughlin said.

And the arrangement has been cited favourably in a recent Amherst Group report on innovation in the public sector, published on the Treasury website.

The ministry is reviewing its IT environment, but the Jarin relationship is not included in the review.

Jarin's biggest project for the ministry was the development of the Companies Office database and website.

A reply from Harris put the cost of this at about $1 million, but it is not clear if this figure covers the whole life of the project, which started about 1996.

He said Jarin also worked on the $1.2 million Personal Properties Securities Register, the $548,000 electrical workers licensing database and the $664,000 Motor Vehicle Traders Register.

Harris would not say exactly how much Jarin was paid because it was "commercially sensitive".

The ministry's website says the Government's procurement policy is to publish notice of purchase contracts worth more than $50,000 "to improve transparency of information on contracts awarded, with the aim of improving market information for all potential suppliers, domestic and international".

Harris said Jarin was still working on projects, including converting the Companies Office database to a new platform.

Indeed, it seems Jarin, which works in ministry premises in Grafton, has no other employers. It has no phone listing and no web site.

The Amherst Group report, which was produced as part of the Government's review of the centre, said Harris formed a relationship with Jarin principal Stuart Judge soon after he was appointed to the Companies Office in 1989.

"The man's passion for exploring the possibilities of information technology for business development was quickly established," the report said.

"The relationship has developed to the point where the consultant is now the preferred provider of the Companies Office, and is regarded as very much part of the team.

"His intimate knowledge of the business, and his non-alignment to any one IT method or provider has led to a mutually beneficial and enduring relationship."

It said conventional tendering processes were followed in the early years of this relationship, but "with the IT market appreciating the strengths of the consultant, it was increasingly perceived that the tender process did not add material value. Contracts are now let on a time and materials basis."

The report said independent auditors were brought in to quality assure each project.

It said the Companies Office employed closed pilots in which "new developments are floated on the internet where they are hidden to all but the few nominated users who have agreed to be part of the pilot.

"This enables teething problems to be worked through to the satisfaction of key customers."

It also means projects can be quietly killed if they don't work out.

"My buzz comes from turning the key on at the end of a project, and then having nothing in the press," the report quotes an unnamed informant from Jarin or the ministry as saying.