William Campbell writes:
Eircode – Now working for directions on Google maps for some (but not yet all) addresses….
Previously: Eircode on Broadsheet.ie
From top: Mark Griffin, secretary general at the Department of Communications, Energy and Natural Resources and Fine Gael TD Patrick O’Donovan
You may recall the Comptroller and Auditor General’s Report on the Accounts of Public Services 2014 included a chapter on Eircode.
It raised concerns about “a pattern of non-competitive tenders for consultants” in relation to the project.
This morning, Mark Griffin, the secretary general at the Department of Communications, Energy and Natural Resources fielded questions about Eircode from members of the Public Accounts Committee.
During his appearance, he spoke about the cost of Eircode and the cost of the consultants hired during the project.
He also spoke about a complaint that was made to the European Commission in relation to the procurement process that Eircode used.
From the proceedings this morning…
Patrick O’Donovan: “Mr Griffin, in 2009, when this whole thing started, your department estimated that the cost was €18million over 18 months. Then, in 2013, the cost rose to €31million. And then, in 2015, it rose to €38million. So. Can you tell me what is the actual cost of this project to date?”
Mark Griffin: “So let me go back, maybe to the sort of sequence of events that you’ve described deputy. You’re right in saying that the 2009 memorandum for Government included an estimate of €14.8million which was €18million, including VAT. Now bear in mind that was at the pre-tender stage so, as you will find with a lot of contracts, whether it’s in the public or private sector that it is quite difficult to determine precisely what the cost of a project is likely to be. The 2013 memorandum for Government included costs of €25million, again against excluding VAT. Now that included the €9.5million for encoding public sector body databases which the 2010 consultation we undertook highlighted as an important thing, in terms of gaining traction, visibility and utility around the Eircode and it also included costs for the geo directories, so if you look at that €25million cost, that was €31million including VAT. Now it didn’t include, as the C&AG pointed out, our own internal staffing costs as some additional consultancy costs. So yesterday the cost, as set out in the C&AG’s report, which we wouldn’t dispute, using the methodology which he did, includes staffing costs going back to 2005 when the, when the sort of bulk of the work on this commenced is about €38million including VAT. To date, at the end of December 2015, we’ve spent just short of €21.2million.”
O’Donovan: “Because the figures that are being outlined by the department from 2009 to 2013, they were presumably, the 2009 figure was presumably arrived at during the period 2005 to 2010 when this thing was being designed. So how did you get it so wrong that they, that the 2009 estimate was so wrong based on what actually came in in 2013, what you forecast in 2013. How can you forecast be so wrong given that you spent the previous five years looking at this thing?”
Griffin: “I suppose one of the big changes in terms of cost additions that would have arose in the period between 2009 and 2013 was including the cost of encoding public sector body databases.”
O’Donovan: “Surely that should have been known, I mean..”
Griffin: “We didn’t actually provide for that in the 2009 estimate. There was an analysis done in 2010, following a consultation process and is part of further evaluation in 2012 where the view was expressed that it would be useful and in fact essential for the public sector body databases to be included in the…”
O’Donovan: “Chairman, I’m kind of lost here, how could a postcode system have been developed and taken five years, from 2005 to 2010 without the basic information namely the geo directory issue having been sorted from the start? How did you arrive at an estimated cost without having the basic thing, which was where are the houses in the country? How did ye do that?”
Griffin: “I suppose what I’m trying to say to you is that…”
O’Donovan: “It seems to me Mr Griffin is ye arrived at a cost without having agreed with GeoDirectory as to how much they were going to require for their database. Is that fair?”
Griffin: “No, I suppose what I’m trying to say deputy is, when you look at the evolution of this project, you’re going back to a project that was first studied in substantial detail in 2006 as part of the report of the national postcode project board which settled on, for a variety of reasons, a postal sector model. If you go to the 2007, when we looked at it, we did a very substantial cost-benefit analysis in 2006. We brought it to Government in 2007, the decision taken at that stage not to proceed on the basis that the cost-benefit analysis didn’t stack up. We went to back to Government in 2009 for further consideration of the matter, best estimate at that stage, as we’ve said, is a project that would cost €18million including VAT. We did not provide for two substantial components at that stage, the biggest one being the encoding of pubic sector databases. In the intervening period it was made clear from further evaluations…”
O’Donovan: “Just on that point. Ye arrived at a cost, including the public service databases and you went to Government with a cost that included public service databases for a national postcode system that would have required, as a basic necessity, that level of information?”
Griffin: “No, the decision hadn’t been taken at that time. That, as part of the project, we needed to encode public sector databases. That is why the cost was €18million rather than €18million plus an additional quantum.”
O’Donovan: “How could you have been developing a postcode system at the time, given that it was being changed from locality-based to address-based in 2012? How could you have been developing that kind of a project without the databases that were required and, at the same time, arriving at a sum for the Government which was €20million less than what it was in 2015?”
Griffin: “At the risk of repeating myself, it is not unusual in the evolution of projects, pre-tender, that the project costs that are identified, or the estimated project costs that are identified would be different to the cost that would be part of the outcome of a tender process. I mean I think if you look at projects right across the public sector and private sector, it is not unusual at all for that to happen. If I can mention the 2010 consultation process that we undertook with over 60 stakeholders at that stage. It included 10 to 15 public sector organisations, it included half a dozen postal delivery and courier service organisations including An Post, DHL, FedEx, UPS, Nightline. Other representative bodies like the Irish Exports Association, Ibec, CWU – what clearly came out at that stage, and not earlier, was that pan-Government support and earlier implementation shall provide a major positive stimulus for the dissemination and uptake of the postcode. It was that, it was the outcome of that analysis that drove the decision to provide for the update of public sector databases as part of the implementation of the project… that itself added in a €9.5million net of that.”
O’Donovan: “Because the reason that I’m asking this is the differential so begun in a period of time that also coincides with, you know running along in the same vein, since 2006, huge procurement issues in relation to this. Where procurement rules just seem to have totally gone out the window and I presume that you accept the findings of the Comptroller and Auditor General in relation to procurement?”
Griffin: “So there are two issues that the C&AG has raised in relation to procurement…”
O’Donovan: “Well, there are a number of issues but…”
Griffin: “Well I’ll group them into two. The first one was the EU pilot case, where a complaint was taken by an individual with the European Commission in relation to the procurement process itself and that complaint was concerned with the structure of the postcode request for tenders which required a minimum turnover of €40million for each member of a bidding consortium and a potential conflict of interest, involving members of the project board. So that, I suppose, the first thing…”
O’Donovan: “Can you elaborate on that for me? The potential conflicts of interest and people on the project board?”
Griffin: “Yeah. There were two individuals that have been on the project, the initial project, the national public procurement project board, back in 2006 – one representative from An Post, one representative of a private company.”
O’Donovan: “What company?”
Griffin: “A company called GO Code.”
Griffin: “And they were part of the national project board, national postcode project board team that assessed the implementation of postcodes back in 2006. I suppose the important thing to point out on this, it wasn’t a formal infringement under the EU treaties, it was what’s termed a pilot complaint. The European Commission found in favour of the approach adopted by us in relation to the procurement process. They did ask that a number of adjustments be made in relation to future procurement process. This involved a subsequent issuing of a circular by the Office of Government Procurement in relation to initiatives to assist small and medium enterprises in public procurement. In April 2015 the European Commissioned notified that the Department that that circular itself didn’t fully address the concerns. We reverted with further information provided to us by the Office of Government Procurement. They’ve taken a number of steps to support SMEs in the procurement process. The OGP published a suite of model tendering and contract documents to make it easier for contracting authorities to comply with the rules and to drive consistency in how procurement functions carried out across the entire public sector. The OGP has also engaged with SME stakeholders who have raised matters in relation to possible barriers for SMEs competing for tender opportunities and, in order to address these issues, have developed a new tendering authority service designed to give an informal outlet for potential suppliers to raise their concerns…”
O’Donovan: “That’s fine…
Talk over each other
Griffin: “The crucial bit is that the European Commission wrote to the Department on the 14th of October last and confirmed that there are no grounds to open and investigation into the matter.”
O’Donovan: “European Commission also said, and I presume you accept what the Comptroller and Auditor General said, the Irish authorities were requested to adapt measures to avoid similar errors in the future and to inform the EC of those measures.”
Griffin: “Which we have done. ”
O’Donovan: “So I mean everything wasn’t hunky dory then, was it?”
Griffin: “Well the important thing is to say, well first of all, if you’re familiar with the system within the European Union, if a jurisdiction is in serious trouble what the commission will do is launch a formal infringement process, this never reached that stage. It didn’t get anywhere near that stage. They issued a complaint, the complaint was comprehensively dealt with by the department and by the Office of Government Procurement, the commission have written to the department, accepting what we have said, welcoming the changes that have been introduced by the OGP and saying that there is no basis to further the investigation. So…”
O’Donovan: “Just in relation to the what the OGP also require. They also require, don’t they, that contracts of order without a competitive process where the value exceeds €25,000. And in the case of this, seven of the consultancy cases met criteria for inclusion in the department’s statements for 2008, 2013 and 2014 but only two of them were included. Why?”
Griffin: “I can’t give you full answers…”
O’Donovan: “Bearing in mind now that the issue in relation to the European Commission which you’ve just said there earlier, everything was sorted out after it, that was…but yet ye had seven issues with the OGP and you only notified them of two.”
Griffin: “We had what you’re talking about is the obligation of Government departments to provide a return under circular 40.02 where consultants have not been engaged by way of competitive tender process where the value of the contract is in excess of…”
O’Donovan: “I know what I’m talking about, because I can see it here, why didn’t you report that?”
Griffin: “Well looking, maybe deal with some of…”
O’Donovan: “We’ll deal with the individually because the comptroller has outlined them there. Consultant A, a retired public servant. From what department? Or what agency?”
Griffin: “I believe, though I can’t say with absolute certainty that the retired public servant is a former member, a former employee of the ESB.”
O’Donovan: “So a former member of the ESB, at what level in the organisation?”
Griffin: “In the EBS?”
Griffin: “I don’t know but I suspect it was quite a senior level, management level I would have thought given the experience and capability and expertise he brought to the contact.”
O’Donovan: “And, according to this, he was paid €137,000 to date? Up to 2014. What has been paid to that individual since this was reported?”
Griffin: “The total payment to Consultant A was €146,000.”
O’Donovan: “So he’s been paid €146,000 without competitive tendering.”
Griffin: “On Consultant A and Consultant B, it’s not unusual for Government…”
O’Donovan: “No, no, no, can I just stick to..he has been paid €146,000 without competitive tendering is that the case?”
Griffin: “That’s correct, yeah.”
O’Donovan: “Right. Consultant B, a retired civil servant. Where did they work?”
Griffin: “Consultant B was a former senior member of staff of the department of agriculture.”
O’Donovan: “At what level?”
Griffin: “Assistant secretary level.”
O’Donovan: “Assistant secretary? And retired. And they got €145,000. Who appointed him?”
Griffin: “He was appointed by the department, €158,000.”
O’Donovan: “And he’s been paid €158,000 without competitive tendering.”
Griffin: “I suppose it’s important to…”
O’Donovan: “I know..chairman, this is important…”
Griffin: “It is important, you’ll get all the information.”
O’Donovan: “Sorry. Consultant C is a retired civil servant, from what department?”
Griffin: “I believe it’s Jobs, Enterprise and Innovation was the final Government department that he would have been employed by..”
O’Donovan: “Have any of these? Have either A, B or C worked for the Department of Communications, Energy and Natural Resources at any stage?”
Griffin: “Consultant A would have done some work on a earlier project but he was not an employee of the project.”
O’Donovan: “So what is the full payment to Consultant C up to now?”
Griffin: “Consultant C? €44,000.”
O’Donovan: “Without competitive tendering?”
O’Donovan: “These are all now in excess of the €25,000 mark. Consultant D? What’s the total amount paid to him?”
Griffin: “Say again?”
O’Donovan: “Consultant D, what’s the total amount paid to Consultant D, now to date, to 2015?”
Griffin: “Consultant D, which are a private sector company, is €53,000.”
Griffin: “Consultant E is a legal company that were employed by way of an open tender in 2011, five tenders received, the value of that contract, the final value of that contract was €109,000.”
O’Donovan: “And the last one then, Consultant F was engaged by Ervia…”
Griffin: “Seconded in from Ervia.”
Griffin: “It’s not unusual for the department to second in, from our agencies or commercial semi-States, the final update, €201,000.”
O’Donovan: “Yeah, because one of these consultants, then as well, was expected to be paid on the basis of milestones arrived at weren’t they? But instead were paid just, they were just paid on a monthly basis. And PA Consulting, they’ve gotten €399,000, isn’t it?”
Griffin: “So PA Consulting have done work for the department for the postcode’s project for a number of years now.”
O’Donovan: “They were awarded without a competitive tender?”
Griffin: “No they were awarded by way of competitive tender. The first one, in 2005, there were six bidders for that contract. PA Consulting were the successful tenderer. The second one, in 2010, there were 11 bidders for the contract.”
O’Donovan: “The contract in 2008 for €55,000 was awarded without a competitive process.”
Griffin: “Yeah, correct.”
O’Donovan: “Why was that?”
Griffin: “I beg your pardon?”
Griffin: “Because I think that, the view was taken at that stage, that PA Consulting were familiar with the project. As I understand it the rules in relation to public procurement allow an extension that brought out the contract and in circumstances up to a value not exceeding 50% of the original tender. So..”
O’Donovan: “But I mean, since then, since the contract was awarded to PA Consulting, and again this is from what the Comptroller said, the contract was awarded to PA Consulting on the basis that payment would be made on receipt of monthly invoices for the support provided in the previous month rather than on the basis of milestones as what was requested under the tender. So while ye engaged in a tendering process, ye didn’t adhere to it.”
More to follow.
Previously: No Honour, No Code
“An Post spent €2.4million preparing the way for it and the Department of Communication, Energy and Natural Resources tell me “An Post were actively involved in every stage of Eircode, from design through to dissemination.”
“So I asked An Post how many people were using Eircode as part of their addresses. Now they initially said to me, in their response that the usage was low.”
“And I suppose low could mean several hundred thousand pieces of mail, so I went back to clarify what we’re talking about in terms of low and they did say that ‘we’re talking about single digit usage in percentage terms’ so less than 10% are using it.”
“I asked An Post how does it work actually, in practice, because I was being told by a number of postal workers, off the record that they don’t have any way of interpreting the code... Postal workers were telling me, Seán, that sometimes they might use their own smartphone to check the codes from time to time.”
“But that really was about it. And I asked An Post how it worked out. For example, if you have an address that’s incomplete but if there is a postcode on the letter, how does it work? And they said that the Eircode on the address can be recognised by sorting equipment, so that’s centrally, and from then on the post person uses the postal address, not the Eircode, to complete the delivery.”
“And they say that it was never intended that the postal address, that postal staff would spend time checking every letter, or any of them, as part of the standard delivery work procedure…”
RTÉ One journalist Brian O’Connell during a report on the controversial Eircode system for the Today with Seán O’Rourke show
Following on from Mr O’Connell’s report, Minister for Communications Alex White was interviewed by Mr O’Rourke.
Seán O’Rourke: “This is something that you feel is worth the, well it now seems like a €50million investment?”
Alex White: “Well I don’t know where the €50million comes from but…”
O’Rourke: “Well €38m and the €12m between the…”
White: “Yeah…I don’t know about the…”
O’Rourke: “€38m from the Comptroller and Auditor General..”
White: “€27million was paid out and then, you know, the Comptroller and Auditor General pointed out that you have to add in the cost of external consultants, you have to add in, you have to put a price on the cost of my staff, the staff in my department, which wasn’t in factored in, and there’s VAT. So certainly there’s a cost here and I don’t doubt that there’s a cost but I think that it’s a very, very worthwhile investment for this country, a critical piece of public infrastructure…”
Readers may wish to note that Mr O’Rourke never asked Mr White about the particular concerns raised in the C&AG report in relation to non-competitive tendering during the hiring of consultants for the Eircode project.
Listen back to the report in full here
I can only agree with Gerard Bennett (January 11th) that Eircode was a huge waste of money. I was awaiting a package from Hong Kong. Using internet tracking I watched it make its way to Cork, from where it was quickly returned to Hong Kong.
The reason An Post gave was that it could not tell where to deliver the package as the address was incomplete. I consulted the company with whom I had placed the order, and they had left a line out of the postal address. However, it did have my name and the Eircode right. I contacted An Post to ask why that could not have been used? The answer was that it did not have the technology to look up the Eircode.
Previously: In Defence Of Eircode
Nothing encapsulates the awful level of Irish policy discourse like Eircode.
Rather than an objective analysis of the pros and cons, the “debate” is dominated by a series of illogical, contradictory and inaccurate tirades from individuals and vested interests who refuse to consider the bigger picture or long-term benefits.
First and most importantly it is never acknowledged that the only way to bring about a near-hierarchical addressing system would be to allocate road or route numbers to every single non-unique address in the country.
As most roads traverse more than one townland and most townlands contain more than one road, the traditional townland line will not fit properly into these new addresses. Space would have to be reserved for new buildings, resulting in address such as “J Murphy, No 3001 L3867, Ballymagash”.
Do your correspondents really think this would be a significant improvement over the Eircode system? Given the vast resources (dwarfing the Eircode outlay) that would be required to assign route numbers to every highway and byway, mansion and cottage in the country, it would need to be.
Eircode features code redundancy and checking so that a emergency telephone operator immediately sees if an Eircode is valid or if a character is incorrect.
That is not the case with regular street numbers or a GPS system; therefore Gerard Bennett’s advice (January 11th) that readers should avoid Eircode (presumably in favour of manual directions) is truly baffling, if not dangerous.
The Eircode website features an excellent mapping system that can link to a mobile phone’s mapping app. Offline maps from the leading manufacturers will soon be available and will work in areas with no mobile phone reception. This will be an enormous boon to the emergency services and lost tourists.
If adopted by Government and the public service, the new unique addresses have the potential to reduce fraud, waste and errors in many services and in revenue collection and disbursement. As a law-abiding and tax-compliant citizen, I would certainly welcome this.
I also look forward to the day when I can send birthday gifts to my niece without a courier telephoning me to request turn-by-turn directions.
Previously: Eircode Red
Pat Flynn, in the Irish Examiner, reports:
“The €38m system is not being used by An Garda Síochána, the National Ambulance Service, and the country’s fire services. The navigation system for the emergency services does not support Eircode and is not likely to in the near future.”
“The Emergency Call Answering Service (ECAS) which handles emergency calls through the 999/112 numbers also does not support the new postcode system.”
“…one senior fire officer said: “As it is, Eircode is worse than useless. We were expecting that the postcodes would be incorporated into satnav systems to make our jobs easier but it appears to be a right waste altogether.””
Previously: Auto Incorrect
FTA Ireland tweetz:
“Autoaddress gets their own #Eircode wrong.”
— Loc8 Code (@loc8code) November 17, 2015
From the chapter on Eircode in the Comptroller and Auditor General’s Report on the Accounts of Public Services 2014 published today.
Good, familiar times.
Previously: No Honour, No Code
Richie Gardiner writes:
Missent to Canada… is Eircode to blame?
Who really benefits from Eircode?
You? The postman/woman?
The country in general?
Answer: none of the above
Blogger ‘Be Your Own Reason’ [link below] asks:
Guess who was on The Postcode Working Group?
John Tierney himself. Of Poolbeg and Irish Water fame. He resigned his position upon starting at Irish Water.
The contract was tendered in breach of EU regulations on procurement, and was set up so that any company with a turnover below €40m wouldn’t be considered.
The contract was “awarded” to Capita Business Support Services Ireland, a UK consortium. It was famously nicknamed “Crapita” by Private Eye for its numerous “failures and setbacks in the Public sector”.
Why a national postcode system would be awarded to a foreign company is hard to comprehend to start with, and harder still given its track record.
But it might be easier to understand when you learn that Crapita was appointed as servicer to NAMA in 2013:
“Under the contract, Capita will deliver primary servicing for NAMA loans with nominal balances of €41 billion. For €5.1 billion of this, Capita will also provide special servicing in the management of over 300 debtors under a framework from NAMA. The contract is worth approximately €80 million (around £69m) over 4 years and will commence on 12 August 2013. An additional 140 employees will be taken on by Capita as a result of the contract.”
The postcode consortium is headed by Capita but also includes: Bearing Point, Autoaddress, Tico Group and An Post. Some of them were on the working group set up by the Government, either directly or through proxy. This is more than a mere conflict of interest.
Mr Alex Pigot was seated on that postcode working group. His company, Tico Group, specialises in bulk mail and direct marketing. He is also a Board member of Federation of European Direct Marketing (FEDMA). Tico Group is now an Eircode consortium member.
An Post was represented on the working group by Diarmuid O’ Conghaile, Head of Regulatory Affairs, and Liam O’Sullivan, Director of Mails Processing. An Post is now an Eircode consortium member.
While not on the Working group, other members of the consortium have undisclosed interests.
Autoaddress directors, Feargal O’ Neill and Patrick Donnelly, are also directors of Gamma. Autoaddress and Gamma share the same address, 17, Inns Court, Winetavern St, Dublin (Eircode D08 XY00 )
While not being immediate members of the consortium, it is clear that Autoaddress directors have access to information that could increase business for their other company, Gamma. This might explain Gamma’s eagerness to get the codes accepted, as shown on their website (above)
As we have seen, they all have a vested interest in the types of business they are involved in (Direct marketing, geolocation, consultants etc ) either directly or indirectly, and some were sitting on the very board designed to set up Eircode by the government. Yet they are now directly involved as members of the consortium.
But what links Capita, Bearing Point, Autoaddress, Tico Group and An Post? It is stranger still.
Autoaddress/Gamma’s Feargal O’ Neill and Patrick Donnelly share yet another directorship: Bizmaps, a newly launched online location finding company is currently finalising a £750,000 (€952,000) seed financing deal for the first phase of its development.
Bizmaps has developed software which provides businesses with online access to mapping, listings, routes and directions-on-demand services for the Irish market.
While searching for data on the company, I came across the published Purchase Orders for the Dept of Agriculture. Looking at the spreadsheets, I found these companies had all provided services to the department.
Between 2012 and 2015, BearingPoint pocketed €180,290 for “IT Support and HR Shared services”, Bizmaps €227,765 for “IT Services”, and Tico Group more than half a million Euro (€587,239 ) for “printing and postage”. An Post, naturally, is also a big supplier to the dept. It provided services amounting to more than €7.82m between 2012 and 2015.
But something else stood out in those Purchase Orders. A little outsourcing company in Clonakilty, Co Cork. A little outsourcing company with a bigger turnover from the dept than even An Post.
Southwestern had invoices totalling €18m for the period 2012–2015.
SouthWestern manages the animal passports process on behalf of the Department of Agriculture & Food. Its other clients include Bord Gáis, the Department for Environment, Food and Rural Affairs, Bord Bia, Eircom and Failte Ireland.
And guess who snapped UP Southwestern last year?
The head of the Eircode consortium, Capita.
Members of the consortium, put together, made €26m from the Dept of Agriculture alone.
In 2013, Southwestern was refinancing €11m of IBRC debt. Their owners, Ion Equity, were also fighting O’Brien on Topaz. Was Capita in a position to snap it, as a servicer to NAMA?
Were they provided insight into the value of business to Southwestern by The Dept Of Agriculture?
A Fine Gael government, giving a brand new consortium to a UK Company despite enormous conflicts of interest, appointing it as a NAMA servicer, and providing it with companies well serviced by Government Ministries……How many hornets in a hornet’s nest?