The Far North District Council will review its tendering processes after the High Court found a local firm's tender was wrongly excluded from a cycleway project.
The court ruling could hit ratepayers in the pocket with the company that won the dispute, Okaihau-based Rintoul Group, seeking more than $500,000 in compensation.
Mayor John Carter said a proposal to set up a review panel, which would examine the council's procurement processes to make sure they were fair and robust, would be tabled at the June 22 council meeting. The panel would start work as soon as possible afterwards. Changes would be made if the review found any faults.
"Our aim is for all contractors, residents and ratepayers to be confident that our procedures are fair, robust and transparent."
Mr Carter's statement about a review came after outspoken councillor Dave Hookway issued a statement of his own.
Mr Hookway said he was "extremely concerned" by a number of points raised in the court ruling, so he was calling for a public investigation.
Rintoul Group's price for the four sections of Twin Coast Cycle Trail being tendered was more than $630,000 cheaper than its competitors, a large sum for a small local authority even when Government funding for the bike trail was taken into account.
"The true reasons for excluding Rintoul Group tenders must be made clear and accountability sought for such decisions," he said.
Mr Hookway said a growing number of ratepayers were approaching him with concerns about the quality of council decision-making. Much of their disquiet related to issues from the previous term.
It appeared the lessons of a Serious Fraud Office investigation in 2014 had not been learnt, Mr Hookway said. While the SFO found no intention to commit crime it did find evidence "that both council members and employees apparently failed to comply with internal systems and controls designed to ensure that proper processes were followed in the approval of council projects and the expenditure of public money."
Mr Hookway said the council had to show it could address ratepayer concerns and do so in a transparent way.
In March 2016 five companies, including Rintoul Group, tendered to build four sections of the Twin Coast Cycle Trail.
Rintoul Group had previously built the Kawakawa-Taumarere section but an evaluation group alleged inconsistencies in information supplied about the project, that it had not been finished and went over budget. The council then excluded the company from the tender process and invoiced it for more than $60,000 in deductions.
Company director Ken Rintoul told the council it was "totally bizarre" that his firm had been shut out.
Justice Mathew Downs ruled in the High Court at Auckland last month that the council was wrong to exclude the company.
The two sides were given 15 working days to agree on compensation. The council can appeal the ruling.