A high-level review has begun into the way a city council contract to install fibre optic cable in Birmingham’s new civic library was awarded to Capita.
Council chief executive Stephen Hughes, who is personally handling the inquiry, said he wanted to make sure the decision was “above board”.
The unusual intervention follows complaints levelled by the boss of one of Birmingham’s oldest specialist electrical providers.
Andrew Percival, managing director of Witton-based Mayflex, claims his firm was treated unfairly when bidding for the library job.
Mr Percival alleges that a key clause in the specification for the library cabling systems did not become clear until towards the end of the tendering process, making it impossible for his company to win a contract believed to be worth about £700,000.
The contract was awarded to Capita-led Service Birmingham, which has an exclusive agreement to provide the council’s IT services and already has contracts worth about £1 billion with the local authority.
Mr Percival said the council’s initial specification required a “standards-based” cabling solution, prompting Mayflex to enter a competitive bid for the work.
Mayflex proposed installing its Excel structured cabling system and in July this year the Excel solution was recommended to the council by the company with overall responsibility for delivering the library’s mechanical and electrical requirements.
The council’s response was that Excel was not suitable and that Krone cabling, a branded product, would be required.
Mayflex is not able to offer Krone cabling, although Capita can do so, according to Mr Percival.
He complained in writing to Mr Hughes, pointing out that Krone cabling is significantly more expensive than Excel.
Mr Percival added: “Why was a tender issued as early as 2009, then again in 2011 for a standards based structured cabling solution, that is no brand mentioned, if the council had already made its decision on the brand required?
“The council will have incurred significant costs, directly or indirectly, for what appears to have been a pointless tender exercise. If the council is insistent on a single brand, how does it believe this is a competitive tender?”
He said it was far from clear who at the council made the final decision to award the contract to Service Birmingham.
Mr Percival, whose company was founded in 1917 and employs 180 people, said he had “grave concerns” about the way the council had treated a small firm seeking to create jobs and work in Birmingham during the current economic crisis. He added: “In a time of cuts and redundancies within the council how can it sign off expenditure on the basis of a brand name?
“This is not a competitive situation, and not an acceptable use of public money in a design and build project.
“The council is not delivering best value for money and is willingly spending more than it needs to achieve its published technical requirements.”
Mr Percival said his attempts to get to the bottom of the tender process had been rebuffed by council officials.
“This is clearly a decision that no one at the council wants to take any ownership for, or offer any explanation for.”
Mr Hughes described the procurement process as “complicated with no one person in charge of every detail”.
He promised an investigation into Mr Percival’s claims, although he insisted that Service Birmingham’s bid for the library work remained the best value.
Mr Hughes added: “The city council has an exclusive contract with Service Birmingham to deliver IT services.
“Not withstanding that, we still decided in this instance to go through a value engineering exercise to see if we could obtain better value from elsewhere in the market place. Our conclusion after undertaking this exercise was that we could not and Service Birmingham remained the best option.
“I have written to Mr Percival to advise him accordingly and have personally promised to conduct a detailed review of the decision to ensure everything was above board.”