NAO chastises minister for interfering in selection process

The National Audit Office (NAO) has censured the minister for the economy Chris Cardona and parliamentary secretary Edward Zammit Lewis for re-ranking firms which bid for a contract to provide legal services for the granting of concessions for the operation of casinos.

The re-ranking was made after the original ranking was made by an Evaluation Committee. The report concluded that the "ranking process as carried out by the Evaluation Committee was not deemed acceptable" and the re-ranking process "was carried out directly" by Cardona and Zammit Lewis.  

The NAO report, carried out that the request of the Opposition MPs, added that "this re-ranking detracted from the process's overall level of transparency."

Last year, the minister for the economy Chris Cardona, had been accused of having instructed the Privatisation Unit (PU) on which legal firm to choose in a recent competitive process for legal consultancy in the pre-drafting, adjudication, negotiations and final agreements of an expression of interest for the granting of two new casino licences.

In July, Prime Minister Joseph Muscat said that the PU should not have been involved in the classifying of a company to provide legal services, when this was an expression of interest.

The firm was to support and advise during the process for a call for expressions of interest for the concession of two casino licences, which the Ministry for the Economy, Investment and Small Business (MEIB) was embarking on assisted by a number of other entities, including the PU. The AG was also to report on the intervention of MEIB during this procurement process.

NAO added that the Evaluation Committee "was not formally appointed by MEIB, nor was it furnished with clearly defined terms of reference outlining its expected functions and responsibilities.  In NAO's opinion, these shortcomings created a sense of ambiguity that manifested itself at various stages throughout the legal firm selection process."

While commending MEIB's initial endeavours at designing a selection process that was open and transparent, NAO said that "the removal of past experience as an eligibility requirement subsequently created the need to establish another mechanism whereby the interested legal firms' quality could be assessed and ascertained."

Moreover, the report pointed out that MEIB's failure in providing adequate guidance regarding evaluation criteria, despite the numerous attempts at sourcing such assistance by the Evaluation Committee, contributed to the difficulties that subsequently surfaced.

"This guidance was critically required in view of changes implemented with respect to eligibility criteria. NAO is of the opinion that attempts made by members of the Evaluation Committee to seek guidance from this Ministry were warranted and certainly merited attention, which unfortunately, was never forthcoming.  On the other hand, failure on the part of the Evaluation Committee to proactively propose and utilise comprehensive criteria other than the price criterion eventually employed, was deemed as constituting a shortcoming on the Committee's behalf, as was the evaluation based on price alone, which resulted in an incomplete analysis of offers received."

NAO added that it was impossible to establish a clear understanding of the re-ranking, especially how each of the firms fared with regard to the individual elements that constituted the qualitative review.

It also noted that MEIB was effectively constrained in having to resort to the placement of a direct order due to the fact that no advertisement in the Government Gazette had been placed with respect to this request for legal services.

NAO was requested to widen the scope of this investigation by the Government MPs on PAC by reviewing the award of direct orders for legal services by PU between 2008-2013.  This request is to be reported on under separate cover and will be concluded in due course.