Auditor General Deodat Sharma says that the Regional Administration of Region Five (Demerara-Mahaica) breached Section 14 of the Procurement Act of 2003 when it split a contract for $29.530 million to avoid the involvement of the National Procurement Tender Administration Board (NPTAB).
Section 14 of the Procurement Act states “A procuring entity shall not split or cause to split contracts or divide or cause to divide its procurement into separate contracts where the sole purpose for doing so is to avoid the application of any provision of this Act or any regulations made thereunder.”
However, the AG found that the Regional Tender Board, which has a financial ceiling on the value of contracts awarded, split a contract for the remodeling/extension works to the male surgical ward, A&E unit at the Mahaicony Diagnostic Centre. The AG’s investigation found that contract No-350 was for the extension of the building while contract No-349 was for the tiling, painting, electrical and plumbing of the building and both were awarded on June 25, 2020, to the same contractor and signed five days later.
“The contract for the extension had a completion date of 7 weeks after the signing, while the contract for the painting had a completion date of 4 weeks after the signing. It is not clear how the painting contract could have been finished before the extension contract, since the painting had to be done after the building was extended. Further an examination of the Accounts Sheet attached give the start and completion date for the painting and tiling contract as 7 July and 4 August respectively. While the extension contract gives the start and completion date as 3 August and 21 September respectively,” the Auditor General’s report stated.
The Auditor General also found that the Contract Register kept by the Regional Administration was not properly and accurately maintained. He noted that checks revealed that while the contracts were entered numerically, the contract dates were not stated in addition to other pertinent information such as Tender Board award number, variation, revised contract sum and dates of commencement and completion. The Regional Administration did commit to having the records accurately maintained.
Restrictive procuring
The Procurement Act 2003 Chapter 26 (1) (a) states, “The procuring entity may engage in procurement by means of restricted tendering in accordance with this section when – the goods, construction or services by reason of their highly complex or specialized nature, are available only from a limited number of suppliers or contractors, in which case all such suppliers or contractors shall be invited to submit tenders.”
However, the AG found that the Regional Administration breached this section of the Act when it failed to engage in pre-qualification of bidders for the year 2020. However, the 2017 pre-qualifications were used up to August 2020, the AG said. He added that the restrictive method of procurement was utilised by the Regional Administration pertaining to contracts awarded after 15 September 2020. Moreover, the AG notes, an examination of the RPTAB Minutes revealed that a number of new Contractors were invited to bid and they were awarded projects via the restrictive bidding process. As such it could not be determined what criteria was used to select contractors to bid for these projects.
The Region explained that contractors submitted their compliances and other documents to the RPTAB and requested to be given a chance to execute works. This explanation would raise serious concerns about the breakdown of procurement rules.
Amounts totalling $97.116 million were expended on drainage and irrigation works by the Regional Administration and an analysis of the spending found that 71 contracts were awarded in this category of which 32 amounting to $8.513 million were for manual maintenance of canals.
“Nine contracts totalling $38.632M or 39.5% was awarded to one contractor while thirty contracts totalling $50.240M were paid to ten contractors. These projects were not publicly advertised and were awarded using the restrictive method according to the Regional Procurement Tender Administration Board (RPTAB) Minutes. In addition, only three Contractors were invited to bid for sixteen projects, whilst, four Contractors were invited to bid for twenty-three projects. A similar situation occurred in 2018 and 2019,” the report stated.
Sole sourcing
The Auditor General’s report stated that 10 contracts totalling $12.744 million for the supply and delivery of crusher run were not publicly advertised and procured via the sole sourcing method which amounted to a breach of Chapter 28 of the Procurement Act.
Chapter 28 states “The procuring entity may engage in single source procurement when (a) the goods or construction are only available from a particular supplier or contractor, or a particular supplier or contractor has exclusive rights with respect to the goods or construction and no reasonable alternative or substitute exists or (b) the services by reason of highly complex or specialised nature, are available from only one source.”
It was clear that the company awarded the contract is not the only one qualified to deliver. Additionally, an examination of the Regional Tender Board’s minutes found that on November 27, 2020, approval was given to purchase crusher run for 5 Neighbourhood Democratic Councils (NDCs) from Toolsie Persaud Timber Traders Inc at a cost of $3.937 million via the sole sourcing method. However, the company later informed the Regional Administration that it would be unable to supply the crusher run and did not sign the contract.
“Ten contracts totalling $30.214M were seen where the date on the contract was before the date on the RPTAB Minutes on which the Contracts were awarded,” the AG found.
