Final Report - European Commission - Europa

Chapter 3 Explaining the performance of the Phare programme 49
• For infrastructure contracts, the terms of the framework contracts under which many of
the design consultants were retained generally gave little or no leverage over their
performance 80 .
Some of these reviews also found that in the past the Delegation directly contributed to
financial and contractual irregularities, combined with lack of transparency, which in turn
resulted in serious deficiencies in the quality, timeliness and cost of work performed under
these contracts. For example:
• In the road sector, out of seven works contracts analysed, six were awarded to contractors
whose bids were not the lowest. In a number of cases, the subsequent performance of the
contractors was seriously deficient. 81
• Analysis of the tender evaluations highlighted a number of irregular practices and
inconsistent applications of procedures. 82
• Relationships between PMU staff and supervising consultants; and between supervising
consultants and contractors have been unhealthily close in a number of cases.
Supervising consultants in some instances supported excessive claims. 83
• With respect to the contract for construction of border crossing with Greece, a review
found interference on the part of the Delegation in the process by which supervising
consultants were appointed; which led to extremely poor implementation of the contract
(see section 2D) and to serious irregularities in the payment of claims; the review
recommended legal action against the contractors. 84
Delegation response
The commissioning of the studies described above on the part of the current Head of
Delegation was intended to be a first step in improving the effectiveness and impact of the
programme. The Delegation has begun to improve its systems for financial management and
supervision and has recently improved the efficiency with which it processes project
documentation.
However, the Delegation has not received support from Headquarters on this work. The
Delegation has provided copies of the reviews described above to EuropeAid and DG Relex,
but as yet no response has been received. Discussions with Headquarters staff shows that
they do not share the analysis of the Delegation either with respect to the seriousness of past
problems, or to the actions required.
This disagreement has contributed to a total breakdown of team work between Delegation and
Headquarters staff (demonstrated in interviews for this Evaluation) which in turn seriously
hinders programming and implementation. This is one of the most important findings in this
Evaluation. Management action to address these issues is essential.
80
81
82
83
84
The contracts were fee-based, rather than lump sum, and offered 80% advance payments with
no requirement for bank guarantees.
Examination of transport projects (see footnote above).
Including decisions on evaluation criteria after opening of financial envelopes. Source
footnote above.
“Internal Audit on the Police Training Academy”, 28 February 2001, Frank Sutcliffe, and
other reports in this series; “Internal Audit on the Completion Works for Border Crossings at
Tri-Urat and Konispoli”, Interim Report, February 5, 2001, Frederick W Sutcliffe;
Examination of the Procedures in the Civil Works Sector for the Implementation of Phare
Transport Projects; Final Report; 9 September, 1999. P. Riembault.
“Internal Audit on the Completion Works for Border Crossings at Tri-Urat and Konispoli”,
Interim Report, February 5, 2001, Frederick W Sutcliffe.