Committee Reports > List of Committees > Dáil > 1958 > Committee of Public Accounts > Report - Appropriation Accounts 1955 - 1956

APPENDIX XX.

PRISONS—EX-GRATIA PAYMENT TO FUEL CONTRACTOR.

Cléireach don Choiste um Chuntais Phoiblí.

In accordance with my undertaking at the proceedings of the Committee on the 9th October I am sending herewith a note regarding the circumstances in which an ex-gratia payment of £345 was made, with Finance authority, to a fuel contractor to offset an increase in the price of turf to him.

(Signed) THOMAS J. COYNE.

Department of Justice.

27 Samhain, 1957.

On the 3rd September, 1955, the Commissioners of Public Works placed a contract with a fuel contractor for the supply and delivery, as required, to Mountjoy Prison during the period ending the 31st July, 1956, of approximately 2,000 tons of machine-won turf at 61/6d. per ton.

On the 7th September, 1955, the Department of Justice reported to the Commissioners that the first two loads of turf were of very poor quality. The matter was taken up with the contractor who sought an explanation from the firm who had supplied him with the turf. On the 24th September the Department of Justice reported to the Commissioners that there had been no improvement in the quality of the turf being delivered. On the same date the contractor wrote to the Commissioners and informed them that his tender of 61/6d. per ton had been submitted on the basis that he would be able to obtain machine-won turf of suitable quality from a private Company at a rate of 51/6d. per ton but that, in view of the complaints made by the prison authorities as to the poor quality of the turf delivered by him, he had ceased to deal with the Company and would obtain the balance of the requirements from Bord na Móna. He drew attention to the fact that the extra cost of obtaining Bord na Móna turf would considerably reduce the margin of 10/- per ton allowed in his tender to cover haulage costs and profit and asked in the circumstances that consideration be given to allowing him some increase in the contract price. The turf delivered to the prison since the 26th September was obtained by the contractor from Bord na Móna at 57/6d. per ton.

On the 9th December, 1955, the Commissioners asked the Department of Finance to sanction the payment to the contractor, on an ex-gratia basis, of an increase of 6/- per ton on the contract price, representing the extra charge which he had to pay for turf. The Commissioners were satisfied that in equity and having regard to the fact that the amount allowed in the tender to cover haulage costs and profit was very reasonable this increase should be allowed to him. They added that the next lowest tender to the contractor’s had been 68/6d. per ton. (A tender at 64/6d. per ton submitted by another firm had been later withdrawn). On the 1st February, 1956, the Commissioners were informed that the Minister for Finance was not satisfied that the granting to the contractor of an increase in his contract price, other than the increase of 3/- per ton sanctioned on the 3rd January, 1956, in respect of Bord na Móna machine-won turf, was warranted.

The Commissioners asked on the 8th February, 1956, that this decision be reconsidered, pointing out that the sanction, referred to in the Finance minute, to pay an increase of 3/- per ton was a general one arising out of the decision of Bord na Móna to increase the price of machine-won turf by that amount as from the 22nd September, 1955, whereas the reason for seeking sanction to pay an increase of 6/- per ton to the contractor was his inability to obtain from the private turf company turf of a quality acceptable to the Commissioners and the necessity imposed on him to meet their requirements by purchasing machine-won turf from Bord na Móna at a price of 6/- more per ton than the price on which he based his tender. The Commissioners were still of opinion that in equity the increase of 6/- per ton was fully justified and were satisfied that to withhold it would involve the contractor in serious loss. They stated that in a letter dated 6th February, 1956, the contractor had informed them that, if they could not agree to pay him the increase sought, he would be obliged to withdraw from the contract with effect from the 11th February. While legally the contractor was not entitled to the increase or to withdraw from the contract, it would be apparent, the Commissioners said, that there would be considerable practical difficulty in persuading him to continue supplying turf to the prison at substantial and increasing loss to himself; and the interruption of supplies to the prison, pending the making of alternative arrangements with another contractor would be a serious matter. Substantial deliveries were then needed to meet the prison requirements.

In the light of these further representations the Minister for Finance sanctioned the granting to the contractor, on an ex-gratia basis, of an increase of 6/- per ton on the contract price in respect of Bord na Móna machine-won turf delivered by him to Mountjoy Prison on and after the 26th September, 1955. The sanction was to be inclusive of the general 3/- per ton increase sanctioned on the 3rd January in respect of Bord na Móna machine-won turf.