The clear conflict of interest and breach of government tendering processing was highlighted in a Public Service Expenditure Review Committee report by chairman Geoff Stoddart in July.
The report only became publically available when it was tabled in parliament last week.
In January, local computer services company Summerfield Systems Limited lodged a complaint regarding a tender for an IT infrastructure upgrade for the Ministry of Marine Resources which was awarded to D and A Solutions Limited.
The complaint alleged the tender was awarded to a company owned by the Ministry of Marine Resources information technology manager Dion Wigmore’s cousin.
Summerfield Systems also alleged the company had privileged information about the tender, giving them an unfair advantage.
A review in July revealed the tender had been put out because MMR secretary Ben Ponia had been unwilling to join the government-managed computer communications system.
“Ponia spoke of concerns as to confidentiality as his main reason for maintaining MMR separately in spite of advice that cost savings should eventuate in the alternative,” said Stoddart.
On June 20 last year, Dion Wigmore and Alfred Wigmore created D and A Solutions and were both appointed directors.
In late August, as MMR’s IT manager, Wigmore wrote to Summerfield asking for pricing and information on a list of hardware and software.
A tender for computer hardware and software was advertised from November 1 to 14.
Then on December 15, a tender evaluation group, of which Wigmore was a member awarded the tender of $41,201 to D and A Solutions. The business opened a Westpac bank account the same day.
Stoddart said MMR had failed in a number of ways.
D and A Solutions held privileged information about Summerfield’s pricing, obtained by Wigmore.
Further, as D and A solutions had no trading history, their “track record” was rated by the tender evaluators on Dion Wigmore’s connection to the company.
“PERC is of the view that the tender by D and A solutions was for all intents and purposes a tender by Dion Wigmore personally under another name,” said Stoddart.
The complaint of lack of fairness made by Summerfield was completely justified, said Stoddart.
Stoddart recommended the Minister of Finance, the Minister of Marine Resources and the Financial Secretary note the failures, and the higher standards expected of the Ministry and its staff.
He also recommended Ponia note the failings of staff involved who report to him and take the matters into account in the next performance review of those staff.
Stoddart also recommended that the Public Service Commissioner note the non-compliance and take this into account in the next performance review of the Head of Ministry.
This is the second serious case of conflict of interest revealed in a government agency, after a $70,000 marketing contract for the Cook Islands Pearl Authority was awarded to a company with a family connection to the government agency.