In June 2014, Argyll and Bute Council’s procurement team issued an Invitation To Tender [ITT] to provide Argyll and Bute-wide community addiction recovery services.
The deadline for the submission of bids was 15th September 2014; and the award of the contract – to Addaction Scotland – was announced on 4th November 2014.
A wide spectrum of issues around the specific circumstances of the commissioning and procurement of this contract have led to a level of concern and controversy that sees Audit Scotland investigating that process. Every week, strange new aspects of this are revealed and there is more to come.
The ITT contains the all-important tender specification, with the detail: of the specific services the bidders are required to include and which the appointed contractor will be obliged to deliver; the value of the contract; and the terms and conditions under which it will be conducted.
This document contains material that appears flatly to contradict the validity of narratives supplied by senior ADP managers in responding to aspects of the challeges that have been made:
- two local MSPs and the Executive Group of the area’s Alcohol Alcohol and Drugs Partnership [ADP] would appear to have been serially and materially misled by the ADP Chair;
- the accounting for a recently disclosed and questionable variation of the contract raises serious secondary questions.
This latter issue incontrovertibly puts the continuation of the contract at issue.
The circumstances of the commissioning of the contract for these services are under review by Audit Scotland. Addaction Scotland was awarded the contract on 4th November 2014 and began work on 1st January 2015.
The start of the unravelling
It was learned in the weeks before Addaction began work that the company had not even begun registration procedures with the Care Inspectorate to provide housing support services within Argyll and Bute.
There was general alarm at the lack of Care Inspectorate Registration because the delivery of unregistered services is unlawful. This meant that service users in Argyll would be given no Housing Support services.
A developing narrative
Michael Russell MSP and Jackie Baillie MSP. whose constituencies together cover the entirety of the Argyll and Bute local authority area, pursued this matter with the Chair of the ADP.
The story that followed ran through several variations.
- First, it would all be right on the night – although the timescales involved in the registration process made it obvious that this could not be the case.
- Then Addaction would not initially be delivering housing support services, although they might do so later on.
- Finally that Addaction were not contractually required to deliver housing support services.
An immediate question here is that if the appointed operator was not contractually required to deliver these services, why was this not the explanation offered in the first instance? All of the enquiries we are talking of took place in December 2014 and early January 2015.
None of these three supposed pacifiers for enquirers, given by the ADP Chair, was correct.
Version 4
It is now being said by senior staff involved in the ADP – and well after each of the foregoing three variations had been offered by ADP’s Chair – that Addaction are indeed not required to deliver housing support services – because , as soon as they were awarded the contract they asked for and were given a contract variation.
They are said to have declared at once that they could see no need whatsoever for housing support services and asked for there obligation to deliver them to be removed from the contract.
The variation request was said to have come virtually immediately after the award of the contract.
It has also been admitted that Addaction had not based this request on prior consultation with any service users – but that they had subsequently assessed all their service users Argyll and Bute and, conveniently, had then confirmed that none were in need of housing support services.
The mention within the tender specification which allows for variation of contracted service delivery is at Secti0n 8, Point 8.12 [Ed: The emphases are ours.]: ‘However, to allow for an element of re-design and re-distribution the allocation of funding and the minimum service requirements will alter in the third year of the contract as outlined in the tables below.’
This cannot defensibly support agreeing a material 21% change to the contract and one requested before delivery had even commenced.
Serious new questions
All bidders had the detailed tender specification before they submitted their bids.
Addaction won the contract, presumably on the basis of their bid – which must have addressed the provision of the obligatory housing support services which form, as shown below, a very substantial amount of the total service delivery required in the tender specification.
If the Addaction bid identified a problem of some kind with housing support services, why was the contract award made without a change to the tender specification being communicated to other bidders and without arguably going to a new Prior Information Notice [PIN] followed by a new commissioning process?
Such an action would be legally challengeable, both by disadvantaged unsuccessful bidders and by companies that might have bid had housing support services NOT been included so robustly in the tender specification.
It is hard to account for how Addaction came to judge that these specific services were unnecessary in advance of meeting service users and assessing their needs.
But accepting some mysterious process of divination, did Addaction nevertheless submit a bid which included the delivery of these services, without sharing their judgment that these were unnecessary – and then, having been awarded the contract, immediately ask for a contract variation to remove them?
This scenario raises several questions about the integrity of Addaction’s actions; and opens up more questions about the integrity of the procurement process of this award – detailed below.
Questions that require investigation
The Chair of the ADP Delivery Group is also the Manager of the Dunoon and Cowal 3rd Sector service provider, Kaleidoscope.
Immediately upon the announcement of the contract award to Addaction, the ADP Delivery Group Chair, who is also the Manager of the Dunoon and Cowal 3rd Sector service provider, Kaleidoscope, wrote to Kaleidoscope supporters telling them that the group:
- was delighted with the Addaction award;
- had already been working with Addaction for nine months;
- would be merging with Addaction with itstaff transferring to Addaction under TUPE;
- and that Addaction wpld be using Kaleidoscope’s premises.
All of this must have been arranged in almost impossible time after the decision of award had been taken?
The ADP Delivery Group Chair / Kaleidoscope Manager had also been centrally involved in the preparation of the tender specification, including the service section of it.
That tender specification shows Kaleidoscope delivering the greatest number of hours per month – 248.25 hours – of housing support services compared with any of the other former 3rd Sector Service Providers.
How could the Chair of the ADP Delivery Group, knowing that her own group was delivering these services at this monthly level, accept so easily that there was no need for them? Was her group leading the way in ripping off the Scottish Government’s funding for addiction services?
How could she accept that she herself had produced a tender specification with substantial minimum requirements for the delivery of these very services where they were, in fact, totally unnecessary?
Either she was incompetent to an impossible degree; or, with her self-declared nine month prior experience of working with Addaction [which had been kept from the other 3rd Sector Service Providers], had she and Addaction [and possibly others within ADP management?] come to a pragmatic solution to a contract whose price is widely thought to be inadequate?
It is to be noted that while the agreed contract variation has dropped the requirement to deliver housing support services, no mention has been made of any consequent variation to the price of the contract.
This is despite the fact that, as shown below, the minimum hours per month of housing support services to be delivered add up to 5.74 FTE staff. In cost, at a usual salary of around £15,800 pa plus the usual 10% for employers contributions, 5.74 FTEs comes to £99,761 a year – 21% of the total annual value of the contract – which is £475,139 for each of three years.
It is extraordinary that a contract variation would remove service obligations requiring 5.74 FTEs at 21% of the total value of the contract [against the fact that Addaction is said to have factored a staffing establishment of 8 to run the contract] – and fail to vary proportionately the cost of the contract.
And if the contract was impossibly priced for delivery, why did Addaction bid for it in the first place? Would additional bidders have competed for it had the contract price required the delivery of fewer services at a cost saving of 21%.
The evidence of the tender specification
The impression given by the ADP Chair in her varying defences of the service delivery scenario to the MSPs and the ADP Executive Group was that housing support services were somehow a peripheral matter in the contract.
The details of the tender specification for the contract do not support this perspective. In fact they make it impossible to sustain. As noted above, the minimum hours the tender specification required for housing support services amounted to 21% of the total value of the contract.
There is an immediate oddity in the information provided in the tender specification.
In the listing of service delivery under the system prior to the letting of this contract, three types of services being provided locally to addicts in recovery are noted:
- Counselling & Support
- Community Rehabilitation
- Housing Support
Nowhere in the tender document can we find any advice that the term ‘housing support services’ may randomly be used there as an umbrella description for a compendium of services.
In the fixed minimum requirement of services to be delivered in Year 1 & 2 of the contract as awarded, the tender specification specifically mentions only housing support services.
The number of hours of housing support services listed as being delivered per month under the previous system totalled 864.25 hours. Assuming a 35 hour week [the basis of the contract let to Addaction in generally 9am-5pm hours a day, five days a week], this showed the need for 24.7 weeks work per month – or 6.17 Full Time Equivalent [FTE] staff, to deliver these particular services alone across Argyll and the Isles.
The minimum number of hours per month for housing support services listed in the tender specification is less than had been formerly delivered, at 805 hours per month.
Again using the 35 hour week that is the norm required in the tender, this produces 23 weeks of delivery of housing support services per month – or 5.74 FTEs.
The provisions of these services cannot therefore be credibly represented as a peripheral obligation in the contract.
The basis for agreeing an immediate contract variation
On the evidence of well established service delivery prior to this procurement and of the detail of the tender specification itself, the ADP’s agreement to an immediate contract variation which dropped the entirely of provision of these services does not appear to be a defensible action.
There are only three possible interpretations of this:
- the facts and figures in the minimum requirements given in the tender specification were well founded, secure and a substantial need – but were nevertheless set aside for an extraneous reason;
- the facts and figures in the minimum requirements given in the tender specification – and the detail given of the former monthly provision of housing support services – were plucked from the air and were judged by Addaction, without consultation with service users in Argyll, to be incompetent and utterly unnecessary;
- housing support services were privately agreed to be dispensable in discussions which may well have been held privately between Addaction and ADP management prior to the award of the contract – and might have been a condition of Addaction’s acceptance of the contract. The content of the bids and how they were scored – documents which will be available to Audit Scotland, may carry some clues as to how the contract variation was played.
Whichever of these readings of the situation is the most accurate, there is only one conclusion.
The circumstances of the management of this procurement process and the delivery of this contract are chaotic.
Conscious misrepresentation has been deployed to deflect the awareness of the situation from the concerned local MSPs who represent the public interest – and from the Executive Group ultimately responsible for the integrity and efficient operation of the Partnership.
Situation summary and recommendation
This analysis highlights a contract now being delivered in a manner bearing no resemblance to the weight of the tender specification upon which it was awarded [and the specific bids would be very interesting to see in the light of this situation].
It asks what exactly is being delivered and what relation that bears to the needs assessment behind the tender specification and contract awarded; and to the cost calculations upon which the price 0f the contract was established?
It reveals what can only be a chaotic working environment where versions of what is being delivered may or may not bear any relationship to the actuality on the ground – and where it is being represented differently almost by the week.
It indicates a procurement sabotaged by this chaos of incompetent ADP management either during or after its process – or both.
It shows competing bidders disadvantaged by the circumstances of this premature and not contractually supportable contract variation.
It shows a situation where potential additional bidders were discouraged by the inclusion in the tender of required specific services which was dropped immediately after the award of the contract.
The only defensible outcome to this mess, in the interests of the service users whose needs underpin the very existence of the ADP and in the interests of procedural integrity, is:
- the cancellation of this contract;
- the restitution of the former delivery of community addiction recovery services, however unsatisfactory that process may have been for all concerned;
- the payment of whatever compensation is required by this process to Addaction and to the affected 3rd Sector former service providers;
- and the commencement of a new commissioning process, overseen by Audit Scotland from the outset.
For Argyll is asking the two local MSPs concerned to bring this matter to the attention of Audit Scotland. We have given them a prior summary of this analysis and Michael Russell, MSP for Argyll and Bute, has agreed to update Audit Scotland on behalf of Jackie Baillie MSP and himself.
Note: Here is the Invitation to Tender for this contract, from which the figures quoted above have been taken: ITT – Provision of Addiction Recovery Services.
