An audit of the contract for the provision of food and beverage services at the Malta Life Sciences Park

The National Audit Office (NAO) reviewed the request for proposals (RfP) issued by the Malta Life Sciences Park for the provision of food and beverage (F&B) services at the Malta Life Sciences Centre and the Malta Digital Hub Ltd (MDH) in November 2015. A lease agreement was entered into between the MDH and Cook & Co Ltd in May 2016. After several years of operation, Cook & Co Ltd maintained that the RfP was fraudulent, in that the premises was not as described, giving rise to operational difficulties.

The NAO noted that the RfP provided bidders with an understanding of the broad objectives of the call; however, shortcomings were noted. Its heading was ambiguous in that, rather than procuring an F&B service, Malta Enterprise was leasing a site from which this service was to be provided. The RfP lacked detailed plans for the site, considered relevant given that its use was changed from a childcare centre to a catering establishment, necessitating adaptations. The NAO noted inconsistencies between the actual premises, the plans annexed to the RfP and those submitted by Malta Enterprise in its planning application for the change of use. Visibility was curtailed since no site visit was held during bidding.

The process of evaluation undertaken by Malta Enterprise adhered to the conditions established in the RfP, with the criteria set and relevant weightings fairly applied to both bids received which effectively led to the selection of the bid that was the most economically advantageous. Notwithstanding this, shortcomings during this process were noted, including gaps in documentation, the meeting held solely with Cook & Co Ltd during evaluation, and the notification of the successful outcome of its bid prior to the referral of the evaluation report for the endorsement of the Malta Enterprise Board of Directors.

The lease agreement specified the rights and obligations of the MDH as landlord and Cook & Co Ltd as tenant. The main concern that emerged was the state of the premises and the onus of the works required to render it suitable for the envisaged use. While the agreement specified that the property was being transferred tale quale, the RfP only provided a limited understanding of its condition, did not specify that it was being transferred ‘as is’ and did not provide warranty on use.

Cook & Co Ltd started operating the Zenzero restaurant in January 2017, several months after the stipulated date. This delay could not be solely attributed to Cook & Co Ltd for several defects were noted when assuming ownership, necessitating rectification. Responsibility for the works remained contentious, with latent deficiencies complicating matters. While the endorsement of the MDH for works undertaken was sought and provided, the procedure specified in the agreement was not followed.

The Planning Authority permit for the change of use of the site was issued on 24 August 2016, a week prior to the stipulated commencement date. Moreover, the permit was subject to conditions necessitating works to adapt the premises. An attempt by Cook & Co Ltd to sanction the works undertaken revealed a discrepancy in the area of the site, which was not in conformity with the permit. The NAO established that this incongruence was not attributable to either party but arose during the planning screening process. Of concern was that Cook & Co Ltd carried out the works without the prior sanction of the Authority. Nevertheless, the MDH had visibility over the works and ought to have ascertained that these were covered by a permit. Delay in the issuance of the permit prolonged the process of obtaining an operating licence, with a temporary licence secured on 12 December 2016. When this expired in March 2017, Cook & Co Ltd continued to operate the restaurant for several years despite not having a valid licence.

The NAO asserts that Cook & Co Ltd’s failure to pay rent and other charges constituted a breach of the lease agreement. While the NAO noted that there existed several grounds for the rescinding of the lease, it is pertinent to note that judicial action instigated by the parties was ongoing at the time of reporting.

To view report (.PDF) please follow link.