Tender spot


According to Cllr John Allen-Mirehouse, deputy Leader of Pembrokeshire County Council, the brouhaha over the sale of the Mine Depot in Milford Haven is all down to a misunderstanding of the meaning of the term "tender".
This echoes what the Chief Executive told the Cabinet during the debate that proceeded the decision to give Milford Haven Port Authority (MHPA) a 999-year lease on the site.
To most people, "tender" involves a system of sealed bids designed to get the highest/lowest available price depending on whether you are selling or buying.
So far as the county council is concerned, the constitution lays down some extremely detailed and strict rules to ensure that the procedure is fair.
For instance, tenders must be received in envelopes which carry only the words "Tender" followed by the name of the particular contract "and shall not bear any distinguishing matter or mark intended to indicate the identity of the sender."
And, "Such envelopes shall be addressed impersonally to the Director of Support Services, in whose custody the envelope shall remain until the time appointed for its opening."
If a tender is inadvertently opened before the due date, it must be "immediately resealed by the person opening it, together with a witness" and "the circumstances relating to its opening are to be immediately referred to the Director of Support Services".
"Tenders shall [all] be opened at one time."
And "No tender received after the time and date specified in the invitation shall be accepted or considered under any circumstances unless there is clear evidence of it having been posted by first class post at least the day before tenders were due to be received."
These rules are designed to avoid someone tipping off their favoured bidder of its competitors' prices.
It should not be thought that such stringent rules are necessary because all council officers are considered to be crooks.
Their purpose is to bolster public confidence in the integrity of the system by eliminating the risk that anyone minded to corrupt the system will get away with it.
The situation at the Mine Depot is that is that prospective purchasers were invited to tender for its purchase.
Five individuals/companies submitted bids, of which that of Cleddau Enterprises Ltd (CEL) , a consortium of local businessmen, was the highest.
However, the council opened negotiations with MHPA - not one of the original bidders - and Cabinet has now resolved to award them a lease for a price which we are told is higher than CEL's bid, though the exact amount has not been disclosed.
As can be seen, this drives a coach and horses through the carefully crafted rules in the council's constitution, because there must be the possibility, at least, that MHPA has been told how much CEL was prepared to pay for the site.
The council relies on another clause in the constitution which says: "All invitations to tender shall contain an intimation that the council will not be bound to accept the lowest or any tender."
It was suggested during the Cabinet debate that this clause was a relatively new departure, but, as someone who submitted dozens of tenders to the pre-1974 Pembrokeshire County Council, I can say this caveat was always part of the invitation.
There are two reasons why the council needs to insert this get-out clause: one perfectly innocent, the other less so.
Firstly, there is always the possibility that the tender process will lead to an unexpected result.
For instance, when all the tenders come in at prices way above what the authority has budgeted for a project or way below what is considered to be the true market value of a property.
That could simply be due to a miscalculation of the prevailing price levels by the council, or, more sinisterly, that potential bidders, which on large contracts may be relatively few, have formed themselves in to a cartel in order to fleece the taxpayer.
But what now appears to be happening is that this clause is being invoked as a matter of routine.
That has serious long term dangers because, if people get the impression that the tender process is being used merely to test the water, they will be unwilling to participate.
And, of course, the most obvious question is: if this was not a tender exercise, why were the bids entered into the council's tender register?