Rogue company awarded €8.7m tender

The government’s home for the elderly St Vincent De Paule (SVDP) and the Department of Contracts are insisting on awarding a multi-million euro public tender to a rogue cleaning company that has outstanding issues with the tax authorities and also failed to file its audited accounts.

The Department of Contracts informed all the interested bidders of a long-awaited call for tenders for a three-year cleaning contract at SVDP that was issued end of 2018 that it intends to award it to X-Clean Ltd for a total of €8.7 million.

The authorities’ chose the bid submitted by X-Clean, owned by Denis Xuereb, despite the fact that it was around €400,000 more expensive than the cheapest offer submitted by rival competitor SaniClean JV.

This is the latest decision by the Department of Contracts over this closely watched lucrative tender, which has continued to raise eyebrows particularly due to a colourful history concerning this cleaning provider and its apparent close relationship with the management of SVDP and the Ministry for Family Affairs

The company was registered in April 2015 and, just a few days later, was awarded a temporary direct order for six months by the Family Affairs Ministry for cleaning services at SVDP. At that time, Michael Farrugia was Family Affairs Minister.

The ‘temporary’ direct order, which was first valued at €100,000 a month, is still in place until today – five years down the line – through the repeated issue of the same direct order every six months, with the blessing of the Finance Ministry.

The Shift is informed that, through this system of repeat direct orders, X-Clean received over €10 million in payments as the value of the company’s services inexplicably soared to around €300,000 a month. All this while flouting public procurement rules and keeping all competition out of sight.

This five-year ‘temporary’ direct order also put X-Clean in a very advantageous position to win the new tender, which was issued in December 2018.

However, the award notice decision issued by the Department of Contracts has found some resistance through SaniClean JV, the bidder with the lowest price.

The company has filed an appeal before the Public Contracts Reviews Board and is calling for the annulment of the tender, claiming various irregularities.

According to documents seen by The Shift, SaniClean JV is claiming that the evaluation committee was subjective and erroneous in its technical scores during the tender’s adjudication process and that the Department of Contracts disregarded X-Clean’s position with regards to outstanding VAT and social security contributions.

According to EU public procurement rules, companies with outstanding tax payments are not eligible to bid for public tenders until all their dues are settled.

As part of its evidence, SaniClean JV submitted a judicial letter sent by the Commissioner of Inland Revenue to X-Clean Ltd in July 2019, just one month before the closure of offers, claiming almost €150,000 in outstanding VAT payments.

The judicial letter filed by Inland Revenue Commissioner on 9 July 2019, claiming unpaid VAT.

Xuereb, who is the sole director of X-Clean, has a long record of issues with the tax authorities, through various companies, with a long list of pending and outstanding payments.

“A search in the Malta Business Registry also shows that the recommended bidder failed to submit accounts since its incorporation,” SaniClean JV said in its submissions. This was confirmed through an independent search.

Malta Business Registry document showing that the recommended bidder failed to submit accounts since its incorporation.

The Department of Contracts defended its decision in the appeal, saying X-Clean Ltd would now be asked to produce its certificate of compliance – showing no outstanding issues with the tax department – when the contract would be signed.

It also shrugged off the issue of non-compliance with regards to annual audited accounts stating that this was not the competence of the Department of Contracts.

Meanwhile, until the Review Board takes its final decision on the appeal, X-Clean Ltd will keep providing cleaning services at SVDP through another direct order.

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