‘Local’ issue over procurement contracts

Public interest means it is time the council consider the issue.

Public interest means it is time the council consider the issue.

THE issue of how many Gisborne District Council procurement contracts go to locals will be put on an action sheet for the council’s performance, audit and risk committee's future consideration.

The decision was made on the recommendation of committee chairman Brian Wilson, who said it was time the council looked at this subject because there was public interest in it.

The committee agreed to look at the council’s spend on procurement contracts excluding staff costs, said Mr Wilson.

This will cover only $39 million of a total budget of $68 million or 53 of the largest contracts as it requires a bit of work to determine the local component.

A total of 56 percent of those 53 contracts were decided to be local. Some of the biggest contractors were roading companies, who were listed as external.

Mr Wilson said the last time this subject was looked at it was found that the majority of these contracts were local spend. This included those external companies that had their origins outside the district but called themselves local by running a local people operation.

There were a lot of other grey areas where the company was external but used local contractors or employees, but was still an external company.

“We could spend a lot of time trying to decide who is local or external, which we are not going to do,” he said.

While a company might be from outside the district, the wages stayed here because they were paid to Gisborne people.

The Local Government Act says the council has to be prudent with its finances and the current weighting given to local tenderers. The weighting given to local firms when awarding contracts was 1 percent at present. That could possibly change.

One problem was that there were not a lot of local companies that were large enough to bid for major capital works.

Operations manager Barry Vryenhoek said the contracts in which the council could question what they were doing and perhaps spend more locally were in things like stationary and maybe furniture.

To be perfectly honest he wanted to spend less on paper not more, he said.

The majority of contracts which went to major firms were in the infrastructure area and Gisborne did not have any major businesses that worked in those.

Pat Seymour said the profits from SSE, which had the council’s major roading contracts, went back to Australia.
Mr Vryenhoek said the same applied to the previous contractor, Downer.

The only local construction firm of note in the wider Tairawhiti area was QRS in Wairoa, a council-owned organisation.

“The critical thing we look at is can we do those services here, and the ones I am interested in now are the major building contracts and how much is done locally,” he said.

Mr Wilson said the council did say it would look at this policy and it needed to see a paper on that from staff.

“Even if it ends up the same as it presently is I feel the public will feel that we have had a look at it and thoroughly researched it,” he said.

There was interest some time ago, with a few firms asking what exactly was the council’s policy.

THE issue of how many Gisborne District Council procurement contracts go to locals will be put on an action sheet for the council’s performance, audit and risk committee's future consideration.

The decision was made on the recommendation of committee chairman Brian Wilson, who said it was time the council looked at this subject because there was public interest in it.

The committee agreed to look at the council’s spend on procurement contracts excluding staff costs, said Mr Wilson.

This will cover only $39 million of a total budget of $68 million or 53 of the largest contracts as it requires a bit of work to determine the local component.

A total of 56 percent of those 53 contracts were decided to be local. Some of the biggest contractors were roading companies, who were listed as external.

Mr Wilson said the last time this subject was looked at it was found that the majority of these contracts were local spend. This included those external companies that had their origins outside the district but called themselves local by running a local people operation.

There were a lot of other grey areas where the company was external but used local contractors or employees, but was still an external company.

“We could spend a lot of time trying to decide who is local or external, which we are not going to do,” he said.

While a company might be from outside the district, the wages stayed here because they were paid to Gisborne people.

The Local Government Act says the council has to be prudent with its finances and the current weighting given to local tenderers. The weighting given to local firms when awarding contracts was 1 percent at present. That could possibly change.

One problem was that there were not a lot of local companies that were large enough to bid for major capital works.

Operations manager Barry Vryenhoek said the contracts in which the council could question what they were doing and perhaps spend more locally were in things like stationary and maybe furniture.

To be perfectly honest he wanted to spend less on paper not more, he said.

The majority of contracts which went to major firms were in the infrastructure area and Gisborne did not have any major businesses that worked in those.

Pat Seymour said the profits from SSE, which had the council’s major roading contracts, went back to Australia.
Mr Vryenhoek said the same applied to the previous contractor, Downer.

The only local construction firm of note in the wider Tairawhiti area was QRS in Wairoa, a council-owned organisation.

“The critical thing we look at is can we do those services here, and the ones I am interested in now are the major building contracts and how much is done locally,” he said.

Mr Wilson said the council did say it would look at this policy and it needed to see a paper on that from staff.

“Even if it ends up the same as it presently is I feel the public will feel that we have had a look at it and thoroughly researched it,” he said.

There was interest some time ago, with a few firms asking what exactly was the council’s policy.

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