IRELAND 22 November 2017
Value for Money Examination 40; Purchasing of Tyres by Garda Siochana Summary
On 11 February 2001, a newspaper report alleged that senior members of the Transport Section of the Garda Síochána involved in the purchasing of tyres for the Garda fleet had been entertained on recreational trips abroad, paid for by Advance Pitstop, the principal supplier of tyres to the force. Enquiries into the allegations were commenced separately by the Internal Audit Unit of the Department of Justice, Equality and Law Reform and by Garda management.
This examination of the purchasing of tyres for the Garda Síochána was carried out
- to establish if, in the period 1998-2000, there was a loss of economy in the purchase of tyres by the Garda Síochána, and if so, how great was the loss
- to establish if the tendering and procurement procedures for tyres for the Garda Síochána accorded with best practice
- to establish the level of control over payment for tyres in the Garda Síochána.
Arrangements for Tyre Replacement
Maintenance of the Garda vehicle fleet, including the supply and fitting of replacement tyres when required, is a complex process. Around 2,200 vehicles are deployed around the country to over 400 Garda units and many vehicles have to be available for use at short notice, 24 hours a day throughout the year. Keeping such a fleet operating efficiently at reasonable cost requires strong and effective management and control systems.
Overall responsibility for management and maintenance of the fleet rests with the Transport Section, based at Garda Headquarters in Dublin. Day-to-day decisions about individual vehicles, including decisions about when tyres should be replaced, are delegated to local Garda managers.
The Garda Síochána decided in 1994 that the preferred method for replacement of tyres on its vehicles was through local supply-and-fit arrangements. Based on the results of a tender competition for the supply of tyres run by the Government Supplies Agency in 1993, the Garda Síochána entered into an arrangement with Advance Pitstop whereby most Garda vehicles would, when required, be brought to nearby Advance Pitstop depots to have tyres replaced and other related services carried out. The arrangement between the Garda Síochána and Advance Pitstop continued following a further tender competition organised by the Government Supplies Agency in 1997.
Economy in the Purchasing of Tyres
The Garda Síochána purchased a total of over 24,500 tyres for 2,162 vehicles from Advance Pitstop in the period 1998 to 2000 ? an average of around 8,000 tyres a year. The total cost of the tyres was ?1.65 million. A further ?0.45 million was spent on related services, such as tyre balancing and alignment, the provision of tyre valves, puncture repairs and so on. The amount paid to Advance Pitstop represents 88% of the total direct expenditure on tyres for the Garda fleet.
Rate of Consumption of Tyres
Overall, Garda vehicles achieved an estimated average of just over 15,000 miles per set of tyres. More than 18% of vehicles achieved an average of 5,000 to 10,000 miles per set; while over 5% achieved an average of less than 5,000 miles per set of tyres. The normal expectation is that a set of tyres fitted on passenger vehicles driven in standard conditions should be capable of delivering around 25,000 to 30,000 miles before needing replacement. Even allowing for the extreme driving conditions and demands on Garda vehicles and drivers, the average tyre mileage achieved on Garda vehicles in the period 1998-2000 appears to be low.
Type of Tyres Bought
The prices for different types of tyres vary enormously. Apart from differences in suppliers? profit margins, this price variation reflects differences in tyre size, performance rating and brand.
In the period 1998-2000, there was a significant drift upwards in the both the size and performance rating of tyres bought from Advance Pitstop by the Garda Síochána, with a consequent increase in the level of expenditure on tyres. By and large, this reflected changes in the composition of the Garda fleet ? it now has a higher proportion of more powerful vehicles that require bigger, high performance tyres.
There was also a significant shift in the brands of tyres bought from Advance Pitstop. The Transport Section decides which brand of tyres is to be fitted to each individual vehicle when it is introduced to the fleet. There appears to have been some conscious planning by Transport Section to use cheaper brands of tyres, where possible. However, there was a failure to follow up this planning because the tyre brands bought from Advance Pitstop often differed from those planned. In particular, the Garda Síochána bought significantly more Continental brand tyres ? which are supplied exclusively in Ireland by Advance Pitstop ? and significantly fewer Semperit brand tyres than planned. Size for size, Continental tyres were significantly dearer than Semperit tyres.
Overpayments to Advance Pitstop
The Garda Síochána should have ensured that the prices they paid Advance Pitstop were those offered by the company in their tender offer. Continental brand tyres increased significantly in price after the tender offer was made, but Semperit brand tyres remained at the tender prices. Consequently, the shift in brands supplied was very significant.
The Garda Síochána also paid more than the tender prices for some of the extra charge items and services provided by Advance Pitstop.
The estimated total overpayment on all goods and services supplied by Advance Pitstop in the period 1998-2000, relative to the prices offered in their tender, was around ?208,000. This is around 10% of the total amount paid to Advance Pitstop in the three years.
The prices paid for tyres by the Garda Síochána were much higher than those paid to Advance Pitstop by the Defence Forces, under the same tender arrangements. Moreover, the Defence Forces paid Advance Pitstop less than the tender prices for most of the tyres they bought.
Tendering and Procurement Arrangements
The Government Supplies Agency organised a tender competition in 1997 to draw up a list of approved suppliers of tyres to central government departments and agencies. Seven companies (including Advance Pitstop) were placed on the list. Some offered just to supply tyres; others offered a supply-and-fit service.
The responsibility for properly evaluating the various offers from the approved suppliers rested with the Garda Síochána. An evaluation was carried out within the Transport Section but on the basis of the evidence available, crucial aspects of the evaluation appear to have been seriously misleading. Management in the Transport Section appear to have considered the submission without spotting its deficiencies as an evaluation exercise and allowed the existing arrangements with Advance Pitstop to continue.
A proper evaluation of the offer from the various approved suppliers would have shown that there were suppliers who were willing to meet at least some of the Garda Síochána?s need for tyres at prices significantly less than those Advance Pitstop offered in their tender. Consequently, the choice of Advance Pitstop as the main supplier of tyres for the Garda fleet resulted in a further significant loss of economy.
Management and Control of Tyre Purchasing
Ordering of tyre requirements is divided between Transport Section, who are responsible for specifying what should be bought, and local Garda officers who decide when tyres are required. Garda personnel at unit level have no discretion about the type of tyres fitted on vehicles in their charge. However, for control purposes, they should be informed by Transport Section what tyres should be fitted, and not have to rely on the tyre suppliers for such information.
No central policies were formally set in relation to consumption of extra items and there was no guidance for local Garda officers about what might constitute reasonable use. Local officers were not even told that they were responsible for deciding on ordering extras. Without such policies or guidance, officers were generally in an uninformed position when Advance Pitstop staff raised the issue of extra services.
Garda District Officers are responsible for paying Advance Pitstop for the tyres supplied for vehicles assigned to them. In practice, they were effectively required to certify payments in circumstances where they did not have any information about the prices they should expect to pay, about the specifications of the tyres that should be fitted or about the agreed central policy on the provision of extra charge items and services.
The management and control systems in place in 1998-2000 in relation to tyre purchasing were completely inadequate. In effect, the Garda Síochána ceded control of key aspects of the supply of tyres to Advance Pitstop and allowed themselves, in crucial respects, to become captive to their supplier.