now in support of the proposition. The Committee note that the Secretary for Lands and Works also supports the proposition. With this level of commitment to the concept of a 'lead' office in circumstances where several departments or agencies are involved in a single project programme area, the Committee trust that the problems of co-ordination which have come before the Committee over the years, and the unhappy financial consequences which have resulted, will not be repeated.
GOVERNMENT SUPPLIES DEPARTMENT
7.36 Paragraphs 69-71. Lack of comprehensive guidelines on the planning and conducting of negotiations with the tenderers for the procurement of stores and services under single tender arrangements. The Director of Government Supplies told the Committee that he shared the concern of the Director of Audit on the subject. Following the audit queries remedial action had been taken by his staff in conjunction with the Finance Branch of the Government Secretariat. The Director of Government Supplies said that before 1984 he was not required to advise on all requests for a single tender for the purchase of stores and he was not involved at all in negotiating single tender service contracts. Since 1984 however requests for permission to initiate single tender action for both the procurement of stores and services of a high value had been much more closely monitored by his department. The Deputy Financial Secretary now authorizes single tender action only after obtaining the Director of Government Supplies' advice. The Director of Government Supplies commented that the closing of this particular loophole in the system had been extremely useful and in the long term should be advantageous to the Government.
7.37 With regard to the installation and maintenance of data processing equipment, the Director of Government Supplies said that most major suppliers had their own form of contract agreement which they insisted the Government should sign. In a recent case, however, he had succeeded in persuading one of the companies to withdraw some of its requirements and to enter into a contract using the Government's contract documentation. He added that a new form of contract document had recently been prepared with the assistance of the Legal Department and the Government Data Processing Agency. This was based on consultations with his counterpart in the Canadian Government and reference to the Institute of Purchasing and Supply in the United Kingdom, which had experience of the problems faced by procurement authorities in Europe in purchasing data processing equipment. In future the new document would provide a more comprehensive basis for negotiating with, and obtaining reasonable terms from, data processing equipment suppliers.
7.38 The Director of Government Supplies said that the next step was to identify the needs of the client departments more positively and to ensure that these were properly reflected in the contract. The Director added that his department could only advise on technical specifications in general terms. Whilst his staff had expertise in contractual requirements they did not possess specialist expertise in the data processing, technical and engineering fields; for these, it had to rely on the professionals in the client departments. However in the data processing field, his department had been steadily building up its knowledge over the last 11 years. His staff, particularly the young officers, were regularly sent on computer courses and were being trained up in the data processing field as part of their career development. With this knowledge, the improved liaison between his staff and the staff of client departments, and the awareness gained through hard experience of the pitfalls of being locked in with a major supplier, the Government Supplies Department could now negotiate more advantageously with suppliers using their knowledge of the client's essential needs and their own expertise in contract matters. They would not be taken in by salesmanship.
7.39 On procurement of stores generally, the Director stated that many years ago the Government Supplies Department had relied heavily on the Crown Agents in London but now 80% of all purchases were effected locally by his department. With the continuing build up of specialist knowledge in procurement and the awareness in the client departments of the need to co-operate with his staff, the Director of Government Supplies was now advising client departments to a much greater degree than previously. He would in future participate in negotiations with suppliers under single tender arrangements so that the best value for money would be obtained.
7.40 With regard to the drawing up of comprehensive guidelines for conducting negotiations under single tender arrangements, the Director of Government Supplies informed the Committee that the cases reported by the Director of Audit had not been brought to the attention of his department until after the events had taken place. Now that the problem had been highlighted, he was drawing up guidelines as quickly as possible in consultation with the Deputy Financial Secretary. The guidelines would incorporate the requirement to keep proper records of the negotiations conducted between departments and suppliers. The Director of Government Supplies hoped to have further discussions with the Deputy Financial Secretary before the end of the year on the basic guidelines to be followed.
7.41
Conclusions and Recommendations. The Committee are concerned at the lack of comprehensive guidelines in the past for the critical examination of single tenders and the conduct of negotiations with due regard to economy. The Committee believe that the Government may not always have obtained the best possible terms in such negotiations. 7.42 However, the Committee note the undertaking by the Director of Government Supplies to produce comprehen- sive guidelines as soon as possible for issue to Controlling Officers. The Committee are of the view that these guidelines should include reference to the need for keeping proper records of all negotiations with the suppliers.
7.43 The Committee wish to be informed of the expected date for the issue of the guidelines. The Committee recommend that arrangements be made for the guidelines to be properly monitored.
7.44 The Committee attach particular importance to the involvement of specialist procurement staff in single tender negotiations where the expenditure involved is over a predetermined level, and the Committee recommend accordingly.
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