In the wake of underbidding by contractors to ensure that they win contracts, following which they would apply for increases amounting to millions of dollars, government yesterday said that new tender guidelines will be created that will see penalties for works delivered late.
“Some persons deliberately bid low and the contracts were awarded to the lowest bidder, knowing fully well that they will come back for variations which eventually took the contract sum beyond what was the engineer’s estimate,” Minister of State Joseph Harmon told a post-cabinet media briefing yesterday.
Harmon singled out the Kato Secondary School which started off with an estimate pegged at $500 million but now costs over $1 billion and the works are still not completed. Kares Engineering had won the contract for the construction of the school with a bid of $691,972,139.
Harmon related that the matter of delinquent contractors was raised when the contract for an extension of consultancy services for the consultant overseeing the building of the school was put forward for Cabinet’s ‘No Objection.’ That sum for the extension was over $4 million.
“Cabinet had some very firm words to say to the manner in which the contracts were executed under the previous administration and the fact that contract sums were being extended, extended, extended beyond a sum that was actually catered for in the award of the contract but it would appear to cabinet that some of these contracts were deliberately underbid,” Harmon asserted.
He disclosed that Cabinet gave clear directions to the Minister of Education under whose ministry the matter falls, to call in the contractor and have “some strong words with him” as they will not tolerate any further extensions. He said government was fed-up of bidders who set the stage for winning the award because their bids were lowest but could not produce. “People were bidding low and knowing fully well that they were going to come later on for variations, so that in a process like that, tenderers who were bona fide, who could have done the work, they were actually cheated out of the contracts because some persons bid low,” Harmon stressed.
The Kato Secondary School was built as one of the pre-conditions for a proposed investment by the European Union of €1.8 million for the Kato Hydropower Project. However, the funds expired in February without the project getting off the ground.
