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EXPENDITURE
22. Control and Management of Government property. In recent years it has become increasingly evident that responsibility for the control of Government property, including leased property, is unduly fragmented and that the establishment of a central authority may be desirable to ensure that property requirements are correctly identified, that acquisitions and disposals are timely and appropriate, and that the resources available are employed to optimum advantage. Under the present system several departments are involved in various aspects of the selection, provision, utilization and management of leased offices and quarters, sometimes resulting in their dealing with landlords quite independently of one another. This can give rise to nugatory expenditure because of difficulties and delays in the occupation of the premises, the continued payment of rent for un- satisfactory and inadequately maintained quarters, and the accommodation's remaining unused for lengthy periods, all matters on which I have commented from time to time. Once occupied the continued suitability of office accommodation in the light of changed conditions is not necessarily reviewed as part of a continuing process but is generally assessed only in particular circumstances, such as requests for additional space.
23. A Property Organization and Management Committee was set up in 1975 to advise the Secretary for the Civil Service on matters relating to office accommodation and quarters, but its membership was designed more for the consideration of new building and leasing projects and it seems unlikely that it will be able to devote its attention to matters concerning the overall management of property. The Secretary for the Civil Service is however acutely conscious that a great deal needs to be done in this field, not only in the fairly limited context of leased office accommodation and quarters but in regard to the Government estate as a whole, and he has referred the question to the Secretary for Administration who has asked a working party formed to enquire into various facets of land administration, to include this aspect in its deliberations.
24. Government tender procedures. As part of a continuing review of the operation of internal controls, a periodic examination is carried out of supply procurement procedures in various departments, and following one such examination of the working of a subsidiary tender board dealing with Government Supplies Depart- ment tenders up to a value of $250,000, it was necessary to invite attention to a number of weaknesses in control and deviations from prescribed procedures. These included the failure to review regularly the standing of registered suppliers to ensure that they had the financial capability to carry out any contracts which they might be awarded, a lack of effective security in the handling and safe-keeping of tenders received, and inadequate briefing in their duties of members of the Tenders Opening Committee. My findings have been reported to the Director of Government Supplies and proposed revised procedures are under correspondence with the Deputy Financial Secretary.
25. In connection with the acceptance of tenders submitted from overseas it seems to have become the practice for certain United Kingdom suppliers to reserve the right to vary tendered prices and to charge on a basis of prices ruling at the date of delivery. This must largely negate the basis of the tendering system, especially where tenders are also received from other countries, for although a successful United Kingdom tender might initially be the lowest, by the time the goods are supplied they could prove to be the most expensive. Moreover the Director of Government Supplies is not in a position to monitor the price rises claimed by the suppliers and is unable to determine if they are valid. I have pointed out that in dealing with contracts containing clauses of this nature, particular care must be exercised not only to ensure that there is no tardiness on the part of procurement staff which might result in delay in the despatch of the goods and consequently in Government's being required to pay a higher price, but also to see that a price rise is not charged where a delay in despatch is attributable to the supplier himself. Two cases where the latter may have occurred, involving sums of £498 and £468 respectively, were brought to the notice of the Director of Government Supplies, who is investigating the position to ascertain if a claim for a refund of these amounts would be appropriate.
26. One of the conditions attaching to the submission of tenders for certain classes of construction projects is the inclusion for internal control purposes, of a photocopy or carbon copy of the priced Bills of Quantities forming part of the tender. A failure to supply such copy invalidates the tender and tenders which do not comply with this condition have quite properly been rejected. Nevertheless, following an audit review of the procedures of the Central Tender Board, I felt it appropriate to point out that where the invalidated tenders would otherwise have been the lowest submitted, the acceptance of higher bids as the result of what might merely have been clerical oversights on the part of the tenderers, may have led to Government's incurring increased costs of some magnitude. In two such cases observed in audit the combined additional costs so incurred were in the region of $340,000. Whilst the necessity for the safeguards provided by the requirement of the copy documents is fully appreciated, I have suggested that the effect of this condition is possibly too severe and operates overall to the disadvantage of Government and I understand that consideration is now being given to its modification with a view to alleviating its more extreme consequences. Meanwhile steps have been taken by the Central Tender Board to correct weaknesses in procedures for the security of tenders, brought to notice during my review.
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