KEY POINTS:
Stone suppliers are questioning the awarding of a $5 million contract to supply stone for the Queen St and other central city upgrades to one company.
The Auckland City Council has given Designsource a three-year contract to supply stone for the central city upgrade, the cost of which has risen from an original estimate of $134 million to $167 million.
A $17.4 million increase this month included the cost of higher-quality paving for several projects, including St Patrick's Square, which was not put out to competitive tender because of the preferred supplier contract.
"It's in the ratepayers' interest that the best price be sought for each individual contract," said one stone supplier.
A second said: "It doesn't seem right that you are only allowed to use one contractor to provide all the stone."
A council spokeswoman said Designsource was chosen after a robust and competitive assessment process.
A two-stage process attracted eight expressions of interest, which were assessed on criteria including price and the ability to deliver the quantity of stone required.
Designsource was awarded the contract in April 2005.
The council was confident the Parnell company would come in within budget, the spokeswoman said.
She said the council closely monitored the contract, and a quantity surveying company, WT Partnership, watched the pricing to ensure it was competitive.
The manager of one stone supplier who missed out on the contract, and did not want to be named, said he had no problem with a fair tender process.
But the central city contract had changed since the expressions of interest stage and now had extras such as St Patrick's Square.
"There is a certain amount of unease about it," he said. "The period is too long and it is too open-ended."
The spokeswoman said the council used preferred supplier contracts to minimise risks of unco-ordinated supplies, establish certainty of supply for large quantities of materials and get the best value.
The approach was becoming the norm internationally and was used for large construction projects by Transit and the Department of Corrections.
Designsource general manager Sue Holmes said the company won the contract after a year-long competitive tender process open to companies in New Zealand and Australia.
The company had provided stone on time and at the right price and had performed, she said, and the criticism was unjust.
