Northern Ireland鈥檚 Housing Executive let a 拢133m contract to Carillion Energy Services in 2017 to upgrade energy systems in Northern Ireland鈥檚 housing stock.聽 Following the collapse of Carillion the contract was novated to Engie.
The Specialist Engineering Contractors鈥� (SEC) Group, representing the largest sector in Northern Ireland鈥檚 construction industry, is seeking answers from the Northern Ireland Housing Executive (NIHE), given the losses incurred by firms in Carillion鈥檚 supply chain.聽 One Northern Ireland SME lost 拢150,000.
Using the Freedom of Information Act, SEC Group asked NIHE to explain its reasons for giving the contract to Carillion.聽 Electrical Contractors' Association regional manager Alfie Watterson, speaking on behalf of SEC Group NI, said that NIHE had refused to provide the requested explanation because the information was 鈥榗ommercially sensitive鈥�.聽
He said: 鈥淚 simply do not understand this response since Carillion has been in liquidation since 15 January and therefore will have no interest in this information being made public.聽 NIHE鈥檚 refusal will only serve to arouse suspicions that there is something to hide.鈥�
The NIHE did provide minutes of a board meeting held on 25th November 2016 when a decision was made to divide the energy upgrade work into six lots rather than the previous three on which it had gone out to tender.聽 The larger consolidated lots were said to have had 鈥榓 negative impact鈥� on the tender.
The Constructionline prequalification organisation is also coming under fire. Its category values were used to assess Carillion鈥檚 financial standing: Carillion passed, despite being in a financially precarious position.聽 Under Constructionline鈥檚 system, suppliers are given a value called a notation which takes into account annual turnover, average values of references obtained and net assets.
Alfie Watterson called for Constructionline鈥檚 formula for assessing financial standing to be reviewed. He said: 鈥淭he 2016 accounts for Carillion Energy Services 鈥� their last reported accounts 鈥� revealed a 拢16m loss on turnover of 拢42.8m. Carillion was not in any position, financially speaking, to take on a 拢133m contract.鈥�
But Mr Watterson reserved his greatest criticism for the attitude of the NIHE towards the supply chain. 鈥淕iven that NIHE knew that Carillion would sub-let most of the work, its answers to the FoI Act questions showed a complete lack of interest in the treatment of Carillion鈥檚 supply chain.聽 Given that NIHE is a Centre of Procurement Expertise this is unacceptable.鈥�
He added: 鈥淭he guidance provided by the Central Procurement Directorate (CPD) required NIHE to satisfy itself that suppliers would be treated equitably and paid within 30 days.鈥�
NIHE was asked for information regarding Carillion鈥檚 subcontract terms and conditions.聽 NIHE responded:聽 鈥淭here is no requirement for [NIHE] to assess this information鈥�.聽
Neither did NIHE hold any information on Carillion鈥檚 subcontract payment terms.聽 Mr Watterson said that this response showed either that NIHE was ignorant of CPD鈥檚 guidance or deliberately chose to ignore it. 鈥淭he available guidance makes clear that NIHE should have demanded to know the terms and conditions of Carillion鈥檚 subcontracts to ensure that they were no worse than those under the main contract and that payments would be made within 30 days,鈥� he said.
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