Corrections not tendering contracts - report

The Corrections Department did not tender tens of millions of dollars of contracts with consultants and contractors, it was reported today.

The Dominion Post reported that one multi-million dollar contract was with multinational technology and security firm Honeywell signed in 2004 and resigned last year without tendering. Corrections said Honeywell provided services and maintenance, but was not a contractor.

Corrections' system improvements and projects director, David Linstrom, said best-practice and mandatory rules were followed. Some contracts spanned many years and could be rolled over, so it might appear work had not been tendered but the contract had originally been tendered, he said.

Honeywell was not listed as a contractor because its work was in a "services/maintenance" category, not a contractor or consultant category.

The newspaper reported several former Honeywell employees work for Corrections. At least two managed the contract and approved payments to Honeywell. It obtained documents showing the biggest part of the contract was to provide new security systems.

Parliament's law and order select committee asked this and last year for details of all contractors and consultants used by Corrections, but Honeywell was not on the list.

All other Corrections contracts provided to the select committee for the year 2009-2010 showed 80 per cent were not tendered. About $19m of work went directly to selected firms and 44 contracts not tendered were each worth more than $112,500. Another 58 contracts that were not tendered were worth between $56,000 and $112,500.

The newspaper also carried details of a $140,000 untendered contract for Deloittes to do one month's audit work.

The company earned more than $5 million from Corrections last year. It received more than $2m worth of other contracts, also not tendered, in the 2009-2010 year.

The contract was not tendered because the audit needed to be done immediately, Corrections said.

Generally government departments are expected to tender contracts or justify why not.

Corrections Minister Judith Collins said the department's complex projects needed to use the "very best private expertise" for short periods of time.

She expected procurement systems to be followed.

Honeywell and Deloittes declined to comment.

- NZPA