South Dublin County Council has been accused of failing to conduct due diligence on the manufacturer of a new management software tool that it plans to install across its network.

The council recently ran a tender process for the procurement of the software, which will oblige staff to read and sign off on various communications before accessing the network.

The contract, which is said to be worth between €75,000 and €100,000, was won by Dublin-based firm Espion. It intends to supply the council with software manufactured by UK-based group NetConsent.

However, one of the underbidders, Derry-based Metacompliance, has written to the council to complain about the awarding to Espion.

In its letter, Metacompliance claimed no due diligence had been carried out on the original product manufacturers and that reliance had been placed on the financials of the reseller, in this case Espion.

It points to the most recent set of accounts filed by NetConsent with the UK's Companies House, which indicate it had negative net equity amounting to £269,888 (€370,000) and net current liabilities of £53,400 (€73,100) as of March 2014.

Dire financials

Metacompliance also claimed that Espion had not made the council aware of “the dire financials” of its supplier.

NetConsent, however, told The Irish Times it was not in any financial difficulty. It said that its chief investor, a company called Integrated Software Solutions for Business, held significant assets and employed more than 250 staff across the Middle East.

NetConsent's chief executive, Dominic Saunders, said the allegations being made against it were "untrue and frankly libellous", and that it was not the first time such "desperate tactics by the same underbidder" had been deployed.

He said the accounts being cited by Metacompliance covered a period when the business went through a management buyout process and spent significant money on development.

Improved financials

Mr Saunders said NetConsent intended to lodge a fresh set of accounts with the Companies House as earlier as next week. These, he said, would show a marked improvement in its financial position, including a loss of £29,500 (€44,400) for its most recent financial year, compared with £273,863 (€375,000) for the previous year.

Espion also said it had no evidence to suggest that NetConsent was anything other than “financially sound”.

South Dublin County Council declined to comment on the matter, other than to confirm it had awarded the contract to Espion.

According to its original tender document, the council is acting as the lead authority for the procurement of new software, suggesting it may be installed in the other Dublin authorities if proves successful.

The software essentially allows the council to dispense with distributing key policy measures and compliance material via emails, which may or may not be read by staff.

Under the new system, staff will be compelled to sign off on compliance rules and read communications before accessing the council’s network in a bid to beef up governance structures.