Following questions raised concerning the controversial retendering of a contract for steel some three times, the Ministry of Agriculture (MoA) yesterday said that the decision was made because the increase in global prices for the metal far surpassed its budgetary allocation and it insists that there was “no mischief afoot” in its decision.
The MoA confirmed yesterday’s Stabroek News report that it is now mulling a cancellation of the stockpiling of steel and said it is awaiting an alternative course of action from the National Drainage and Irrigation Authority (NDIA).
“There is and was ‘no mischief afoot’; efforts were made in this case repeatedly through open tender, however, all failed so far,” the ministry yesterday asserted in a statement.
“As a result of the continued high prices and shipping costs for steel, the NDIA at this stage will have to consider a solution whether to proceed or to withdraw the project and wait for 2022 to see if the global shipping costs and cost of steel will come down. The Ministry of Agriculture is waiting to be advised by the NDIA if it has an alternative solution to propose for its consideration under these circumstances. To reiterate, this issue was one of exorbitantly high prices for these imported materials at the required specifications and insufficient budgetary allocations…,” it added.
Yesterday, this newspaper reported that following three tenders for the supply of steel to the NDIA and the National Procurement and Tender Administration Board (NPTAB) rejecting responsibility for those decisions, the authorities are considering whether to cancel the tender altogether and cease the practice of the Authority stockpiling steel.
After a chiding from the NPTAB for wrongfully laying the blame for the decision with the agency, the Ministry of Agriculture on Tuesday withdrew a statement that blamed the NPTAB and promised to clarify the issue yesterday.
An NPTAB official had told Stabroek News that the Board will want to clarify its role, including that it “does not decide on retendering,” because if a contract should be advertised again it lies solely with the procuring entity, which “recommends and justifies” such decisions. “NPTAB merely facilitates the decision of the procuring entity,” the official explained.
The Board met on Thursday and discussed its position with the NDIA after which it was promised a public clarification on the issue.
Sources had told this newspaper that the tender in question had to be retendered after the winning contractor of the tender last November subsequently informed that he could not accept the contract because the prices he had quoted had increased significantly.
Withdrawal
Following the contractor’s withdrawal, the Ministry of Agriculture had approached NPTAB for permission to retender and it was given. A retendering of the project soon followed.
The retendering notice was issued in April of this year and another set of bids submitted. An evaluation was done but there was a dispute since many of the bids had given quotations without adding Value Added Tax on the steel.
Bidders in the meantime informed that the price of steel had again gone up and that there would be variations.
The procuring entity asked yet again for all the tenders to be scrapped but NPTAB rejected the request.
However, the project was again retendered and this saw last week’s submissions from 12 companies.
The Ministry of Agriculture repeated much of what this newspaper was told but did not admit that it had retendered the project without necessary NPTAB approval.
The MoA said that it is public knowledge that due to the Covid-19 pandemic; the cost of shipping has “increased astronomically and therefore world market prices have also increased. This has impacted particularly on construction materials, such as steel, being imported to Guyana at what are their highest levels in years.”
While not informing of a common practice at the NDIA to stockpile on steel sheets and then have it distributed to contractors for respective projects within the agency, as is the case according to officials, the NDIA said that the 2021 Budget for all agencies was calculated at available prices for 2020 and the NDIA is no exception.
“The NDIA, as a statutory agency, has a budgetary allocation approved by the National Assembly. This it uses for the administration of the agency and to execute capital works according to the approved capital programme in their budget. This, as for every year, also happened in 2021. The NDIA, as the procuring entity, went to public tender for steel sheet piles with specifications set by its technical staff. The NDIA asked for an extension of the closing date which was granted by the NPTAB,” the NDIA noted.
It said that those bids were closed and evaluated and Cabinet had a no-objection.
However, since the establishment of the Public Procurement Commission, Cabinet can no longer by law, give a “no objection” but merely notes respective projects.
The Ministry of Agriculture said that the NPTAB issued the award to the successful bidder who subsequently wrote withdrawing from the process as he could no longer provide the sheet piles at the tendered price.
Annul
“The NDIA requested to retender a second time and this was granted by the NPTAB. The new open tender went through the same process as the first and it was found that the prices quoted by the bidders were even higher as a result of increased cost of shipping. The NDIA then proceeded to retender the third time but inadvertently omitted to annul the second tender. This, the Ministry believes, is what caused some confusion among the bidders and led to media attention. The results of the third tender, however, were the same, the prices were exorbitantly high and above the budgetary allocation for that capital project,” it said, giving an over-view of the sequence of events leading up to the last tender.
As it pertains to examination and evaluation of tenders, Section 39 states that “(1) the procuring entity shall transmit to the Evaluation Committee all tenders timely received from contractors or suppliers promptly following the bid opening ceremony for the evaluation. (2) The Evaluation Committee shall, using only the evaluation criteria outlined in the tender documents, evaluate all tenders, determine which tenderer has submitted the lowest evaluated tender, and convey its recommendation to the procuring entity within a reasonable period of time, but not longer than fourteen days. (3) The procuring entity shall, if it agrees with the Report of the Evaluation Committee, publicly disclose the name of the tenderer identified by the Evaluation Committee as the lowest evaluated tenderer.”
The Procurement Act makes clear the role of the procuring agency, in this case the NDIA
It continues, “If the procuring entity does not agree with the Evaluation Committee’s determination, the procuring entity shall issue an advisory recommendation to the Evaluation Committee regarding which bidder should be the lowest evaluated bidder, which recommendation the Evaluation Committee shall observe.”
The law says also that the “procuring entity may ask, within a reasonable period of time, suppliers or contractors for clarifications of their tenders in order to assist in the examination and comparison of tenders.” However “No change in a matter of substance in the tender, including changes in price and changes aimed at making a nonresponsive tender responsive, shall be sought, offered or permitted.”
