Review call after £1.2m Welsh Government payout case

The firm challenged the way in which an interior design contract was awarded

Calls have been made for an urgent review after new details emerged about a case that resulted in the Welsh Government paying £1.25m compensation following a contract dispute.

Legal proceedings were brought by Triumph Furniture after it challenged a contract awarded to a rival.

It has now emerged the Welsh Government was alleged by the bidder to have breached EU rules.

The Welsh Government said it was taking the issue "extremely seriously".

Welsh Government Permanent Secretary Sir Derek Jones told AMs the compensation was paid following an arbitration process.

The most senior civil servant in the organisation had said his officials were looking at whether disciplinary action against the staff involved should be taken.

Triumph Furniture, based in Merthyr Tydfil, reached a settlement with the Welsh Government after disputing the award of a contract

"In my view this was avoidable," Sir Derek had said, blaming in part "poor record keeping and some ill-judged, naive administration".

Sir Derek did not reveal the parties involved at the time, or what had been alleged by the bidder.

But Finance Minister Mark Drakeford has since told Welsh Conservative leader Andrew RT Davies that Triumph Furniture Limited challenged the award decision, and Cardiff-based Richard H Powell and Partners had been the successful bidder.

The contract related to furniture, fittings, planning and interior design on behalf of the Welsh Government, the assembly and the Higher Education Funding Council for Wales, Mr Drakeford said in written answers to questions from Mr Davies.

Russell George, the Welsh Conservative's economy spokesman, said the challenge was "highly embarrassing".

"The loss of such a significant sum of public money indicates shocking shortcomings in the Welsh Government's procurement procedures," he said.

"To minimise the risk of similar mistakes, the Welsh Government should conduct an urgent review of its procurement procedures and at the nearest opportunity instigate further training for staff handling public contracts," he said.

"The outcome of the review and its recommendations must be made public to ensure maximum transparency going forward."

Russell George said training was needed for staff handling public contracts

At a meeting of the public accounts committee in October, Sir Derek said the "large" procurement case had been decided on "some very narrow margins in favour of one tenderer".

"The Welsh Government initially defended the allocation," he said, but after legal advice it was decided it would be better to "enter formal arbitration with the claimant, which was done".

A Welsh Government spokeswoman confirmed a settlement was reached following a legal challenge by an unsuccessful bidder on the project.

A spokesman added: "We are taking this issue extremely seriously and a number of measures have already been introduced to further strengthen our procurement processes and protect taxpayers money."

Richard H Powell and Partners declined to comment.

Triumph Furniture has been asked to comment.