The Ministry of Health has formally responded to rejected bidder Fedders Lloyd Corporation over its concerns in the award of the contract for the specialty hospital, saying it has openly and transparently assessed the “best offer” made to the country.
The ministry’s response was sent to the company on Tuesday—a day before Head of the Presidential Secretariat Dr. Roger Luncheon announced that the awarding of an $18.1M contract to Surendra Engineering for the project will be reassessed.
On Thursday, Fedders Lloyd Senior Vice President Naresh Chandra Soral said that they found it “troubling” that on the 6th September the permanent secretary of the health ministry wrote the company to acknowledge receipt of their formal complaint and then later that day a mail arrived dated September 4th, a day before Luncheon announced the review. “It shows us that this response was pre meditated and there was never an opportunity for a fair review,” he said while expressing frustration. He said that the ministry has not answered why Fedders Lloyd was “disqualified” and they will take up the issue with the Indian authorities.
Surendra Engineering was awarded the contract for the project, for which Fedders Lloyd put in a bid of US$17.69 million (after a 23% discount from its initial bid of US$22.96 million).
Following the announcement of the award of the contract to Surendra, Fedders Lloyd charged that the procurement process was improper and said it will raise the issue with the government of India and India’s Export Import (EXIM) Bank as well as the National Pro-curement and Tender Administration Board (NPTAB) here. EXIM Bank of India is the bank responsible for the line of credit for the contract.
The ministry had initially dodged questions on the issue, including why a company with major hospital building experience was not chosen. Fedders Lloyd has built around 90 hospitals worldwide, while Surendra has not constructed any.
On August 30, Fedders Lloyd wrote to the ministry formally complaining and in a response on Tuesday, the ministry, through Permanent Secretary Leslie Cadogan, maintained that it has diligently pursued the process of tendering and awarding the contract to design, build and equip the specialty hospital for Guyana with due diligence and full transparency, “adhering throughout the process to good, sound and proper policies and procedures.”
The ministry said that the extension of the closing date for the submission of bids from May 15, 2012 to June 26, 2012 does not in any way or circumstance violate any stipulation of international competitive bidding as had been claimed by Fedders Lloyd. “On the contrary this is a standard procedure and is intended mainly to facilitate the widest participation in the bidding process,” it said. On Thursday, Soral said that Fedders Lloyd never asked for the extension even if clarification were asked for six days earlier than closing date.
The ministry said that another issue raised by Fedders Lloyd, the Addendum No 6 dated 20th June 2012, constituted mainly clarifications of questions raised at the pre-bid meeting and other clarifications raised by bidders who were not present at the pre-bid meeting. “As is the standard international practice these clarifications must be circulated, in writing, to all bidders. The issue raised that only 6 days rather than 14 days separated the official date of notification and the opening of bids could have been grounds for Fedders Lloyd or any other bidder to request a further deferral of the opening date of the bid by the appropriate number of days. No Bidder (including Fedders Lloyd Corporation) made such a request having regard to the already generous consideration of the client for earlier extensions. The Ministry of Health is satisfied that this matter does not constitute a material breach of process for Fedder[s] Lloyd to be aggrieved. If indeed this was such a contentious matter Fedders Lloyd could have requested a deferral of the bid opening date,” the ministry stated.
In relation to the bid security and the originating source, which Fedders Lloyd had contended was stipulated to be from a locally based bank, the ministry said that the Pre-Bid meeting and decisions taken thereat are binding on all bidders and override all other previous instructions to bidders. “In the particular circumstance, the pre-bid decision clarified the general conditions in the instructions to bidders Clause 13.2. The clarification and instructions emanating from that meeting- at which Fedders Lloyd was present at very senior representation- and which record was communicated to and received by Fedders Lloyd, in writing, clearly stipulated that the bid security must be from an Indian Bank. Fedders Lloyd Corporation submitted its bid security from the Bank of Nova Scotia in Guyana. There is no evidence that the bid security was supplied by the Axis Bank of India with [correspondent] Bank relations in Guyana. This is in breach of the instructions to bidders and on technical grounds Fedders Lloyd should have been disqualified on this ground alone,” the ministry said.
“Nevertheless, the evaluation committee did not disqualify Fedders Lloyd on this ground. On the other hand, the winning bidder supplied its bid security from an Indian Bank with [correspondent] banking relations with a local Bank,” it added, saying it hoped that this puts to rest the concerns of Fedders Lloyd and that it will have the humility “to be a gracious non-winner in this particular bid and inform its publicity campaigners and spokes-persons of the pertinent facts.”
In response, Soral said that the bid security from Fedders Lloyd was established from Axis Bank, India which complied with the pre- bid meeting clause and then it was confirmed by a local Bank (Nova Scotia) which completed the conditions as stated in the tender documents. In light of this, he questioned where the “confusion” was and said that the stance of the ministry reflected a biased stance.
Meantime, the ministry said that the NPTAB acknowledged and announced the official bid price as per the contractor’s bid. The NPTAB also acknowledged and announced the 23% discount offered on a supplemental attachment within the bid document, after, this was brought to the attention of the NPTAB at the time of opening. The ministry outlined that the official price of a bid is what is contained in the contractor’s bid, which is an obligatory, non contestable issue. It said that no supplemental document can compromise that bid price, irrespective of wherever else such adjustment in the price is made in the body of the bid. Further, it said that if Fedders Lloyd is offering a price discount then that discount must be clearly made on the contractor’s bid but “the fact of the matter, however, is that Fedders Lloyd’s bid was not deemed non-responsive on the grounds of the discount being offered and or the manner in which it was offered.”
The ministry said that with the discounted price of 23% of the bid price, Fedders Lloyd correctly assumed that it offered the “lowest priced bid”. “What is most pertinent to point out here is that it is not necessarily the “lowest priced bid” that is the successful bidder. The NPTAB rules prescribe that the winning bidder will be the “Lowest evaluated Bid,” the ministry said.
“The Ministry of Health is not responsible for the lack of knowledge and or understanding of Fedders Lloyd to the evaluation criteria. The evaluation criteria utilized for the assessment of the bid-as is the standard operating procedure for all tenders in Guyana-is administrative compliance, followed by technical compliance, and followed by price. Clearly neither technical nor financial compliance is of any material value if the tenderer fails administrative compliance,” the ministry asserted.
Further, it said that the association of Fedders Lloyd with other companies was not a matter for the attention of the bid. “The bid was made in the name of Fedders Lloyd Corporation Limited and not as Fedder[s] Lloyd in consortium with NOUS Hospital. If Fedders Lloyd intended to bid as a consortium then the legal arrangements of the consortium would have had to be made clear in the bid proposal. In such a formulation, the bid security would have had to be in the name of the consortium and not Fedders Lloyd alone. Clearly Fedders Lloyd is unclear of what it wants to be and is guilty of trying to modify the process to fit its nebulous state,” the ministry declared.
Soral said that the consortium agreement between Fedders Lloyd and Nous was enclosed with the bid and stipulated the relationship between the two. The bid bond need not necessarily mention NOUS in case of consortium bid, he said.
The Ministry, meantime, also said that the other matters raised pertains to personal aspects of the corporate nature of Fedders Lloyd Corporation and are all immaterial to the consideration of the bid. “That Fedders Lloyd work[s] in many areas and in several countries and is engaged in an assortment of activities is not a unique nor propriety feature of the Fedders Lloyd Corporation. While it is information that is useful to know such information [is] not factored into the rigorous and detailed criteria used to assess the “lowest evaluated bidder” for the project,” the ministry said. “We trust that your concerns have been allayed and that your corporation has accepted that we have [endeavoured] to openly and transparently assess the best offer made to the country,” it added.
Soral has questioned where is the review committee mentioned by Luncheon and questioned the “u-turn” by government. He said that the ministry still has not spelt out why his company was disqualified. “We thought justice would be done to Fedders after reviewing the tenders evaluation but it disappointed us,” he said adding that the company will raise the issue with the Indian authorities “about all these irregularities in the whole evaluation process.”
