Letter to the Minister

1 October 2009

Hon Anne Tolley
Minister of Education
Parliament Buildings

Tēnā koe Minister Tolley

Auditor-General's inquiry into how the Ministry of Education managed the 2008 national school bus tender process

On 4 December 2008, you wrote to the Auditor-General and requested an inquiry into the Ministry of Education’s school bus transport tendering process. You were concerned that many operators believed that the process had been unfair and illegal, and you thought that an impartial investigation by our Office would be helpful.

Our inquiry role involves looking into financial, accountability, governance, or conduct issues in public entities. Our inquiries usually result in reports to the public entities concerned. Sometimes we also present our reports to Parliament. Where appropriate, our reports can include recommendations for a public entity’s consideration. The Auditor-General is not able to nullify contracts or overturn decisions that public entities make.

In February 2009, we announced the terms of reference for our inquiry into how the Ministry of Education managed the 2008 national school bus transport tender process. Our inquiry examined:

  • how the Ministry prepared its overall procurement strategy and Request for Proposal (RFP) for the 2008 bus tender process;
  • the extent to which the RFP reflected the Ministry’s earlier consultation with stakeholders, where appropriate, and the clarity with which any important changes to the RFP were communicated to stakeholders;
  • the extent to which the RFP rules were applied correctly and consistently by Ministry staff, contractors, and the Tender Evaluation Committee; and
  • the extent to which the Ministry responded promptly and effectively when concerns were expressed about aspects of the 2008 bus tender process.

We formed our terms of reference after considering how any inquiry work we carried out could provide some useful assurance to you as the Minister of Education, Parliament, the Ministry, and interested stakeholders about the 2008 bus tender process.

We reported the detailed findings and conclusions of our inquiry work directly to the Ministry today. The report is available on our website. I have attached a copy for your information.

Overall, the Ministry’s procurement approach was sound. No process is perfect, and we found a number of areas for improvement that we expect the Ministry to address in any subsequent bus tender processes. The errors and inconsistencies we found do not, in our view, undermine the overall outcome of the 2008 bus tender process. However, the Ministry must strengthen the quality assurance arrangements it has in place in subsequent bus tender processes.

Price was an important determining factor in the 2008 bus tender process. The influence of price in the 2008 bus tender process does not cause us concern, given the Ministry’s stated value-for-money objectives. There is no suggestion that safety was compromised as a result of this emphasis on price.

If you would like to discuss our inquiry, please have your staff contact me on 917 1500.

Heoi anō

Pania Gray
Sector Manager

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