-matter referred to Auditor General
Following a complaint by Correia & Correia Ltd, the procurement commission has found that a $2.1b GDF wharf contract was incorrectly awarded to Kares Engineering Inc and the matter has now been referred to the Office of the Auditor General.
The summary of the findings of the Public Procurement Commission (PPC) on June 7th this year will add further to concerns about corruption in the state contracting system. To make matters worse, the National Procurement and Tender Administration Board (NPTAB) did not provide a response to the draft summary of findings by the PPC.
Following its investigation, the PPC in its recommendations said “In light of (the) commission’s finding that the tender was awarded to the lowest bidder but not the lowest evaluated bidder as required by S. 39 of the Procurement Act, Cap. 73:05, the matter herein is referred to the Auditor General, pursuant to Article 212AA(1)(l) of the constitution”.
Article 212AA(1)(l) of the constitution states that the PPC could “liaise with and refer matters to the police and the Auditor General”.
Kares Engineering Inc has come to be seen as a contractor favoured by the government and in 2022 it won a contract for the reconstruction of the North Ruimveldt Secondary School even though it had performed poorly on the Kato Secondary School contract in 2012.
On March 18th, 2024, the PPC received a request for an investigation from Correia & Correia Ltd. into the award of Tender Reference No. 260/2023/53 – Provision of Works for Construction of Coast Guard Reinforced Concrete Wharf – Ruimveldt, Georgetown.
Attached to the correspondence from the complainant dated March 18th, 2024, were a completed “Application for Administration Review” Form, a completed “Bid Protest Form” and the “original complaint” lodged with the procuring entity, the particulars of which the complainant relied on.
The complainant, who had bid on the said tender, alleged several breaches of the procurement process:-
The awarded contractor, Kares Engineering, was “non-responsive based on the Financial Assessment within the Evaluation Criteria” and therefore ought not have been awarded the contract,
NPTAB and not the procuring entity awarded the contract,
There was no formal notification or information provided to Bidders that the contract in issue was awarded,
There was no published notification in the public domain that the contract was awarded,
The Bid Security was improperly being held.
On March 21st, 2024, the commission acknowledged receipt of the complainant’s letter and put the allegations of the complainant to both the procuring entity, the GDF and NPTAB. They were invited to submit a response and further requested to submit within five business days of the date of the said letter:
-a complete copy of the tender proceedings, including the Evaluation Report and bid submitted by all tenderers,
-confirmation whether the contract therefor has been entered into and if so, particulars thereof,
-whether the S. 39(3) of the Procurement Act, Cap. 73:05 was complied with, that is, whether the Report of the Evaluation Committee was sent to the procuring entity and they gave their approval or disapproval prior to the contract award decision and publication, and
-whether the contract award decision has been published on NPTAB’s website as mandated by Section 11 of the Procurement Act, Cap. 73:05, and if so, the date of publication.
The PPC said that the NPTAB responded by way of letter dated April 3rd, 2024, and received by the commission on April 11th, 2024, in which it addressed the matters set out in the commission’s letter.
The GDF responded by way of letter dated April 15th, 2024, in which it acknowledged receipt of the commission’s correspondence and said that: “we are carefully preparing our response, which will be appropriately transmitted to your office on or before April 22, 2024.” The PPC said that this was not received.
Six bidders
Based on the information supplied by the NPTAB to the PPC, there were six bidders and all were deemed responsive. The six were R Bassoo and Sons Construction Company, S Jagmohan Construction and General Supplies Inc, Correia and Correia Ltd, Arjune Construction Ltd, Memorex Enterprise, Kares Engineering Inc, Ivor Allen and Gordon Winter Company Ltd.
Correia and Correia Ltd’s contention was that Kares’ bid was not responsive as it was less than 80% of the Engineer’s Estimate. This was the benchmark set in the evaluation criteria in the bid documents and the PPC agreed. Kares’ bid was at 77.8% of the Engineer’s Estimate while Correia and Correia’s was at 82%. Ironically, the PPC found that S. Jagmohan would have been the lowest evaluated bidder but it did not lodge a complaint.
When asked by the PPC to provide an explanation, NPTAB in its letter of April 3rd, 2024 to the PPC , asserted that the “Financial Assessment” did not form part of the Evaluation Criteria. It stated:
“Regarding the financial assessment among the bidders, it’s important to clarify that the paragraph in the bidding document stating “Financial Assessment (b) Any bidder whose bid is less than 80% of the Engineer’s estimate WILL BE CONSIDERED Non-Responsive” is not a part of the evaluation criteria. Discretion is exercised to ensure the best cost per value. All criteria were meticulously met, and there is no disadvantage in awarding the contract to the bidder, who is a reputable firm. The purpose of the 80% benchmark is not to eliminate bidders but to prevent unqualified ones from submitted unrealistically low bid prices that could lead to issues during the project’s execution.”
The PPC did not agree with this position of the NPTAB. It found that the financial assessment was part of the evaluation criteria.
According to the PPC: “The aforesaid explanation of NPTAB appears to be inherently contradictory and inconsistent with the Report of the Evaluation Committee. On examination of the Report, the Committee having considered whether the bidders had satisfied the ‘administrative requirements’, then went on to conduct a non-financial assessment of the bids to determine which would then be considered for the next and final stage in the evaluation process of `Financial Assessment’”, the PPC said.
The PPC said that the Evaluation Committee therefore appeared to consider that the “Financial Assessment” was part of their evaluation process.
The PPC added that the Evaluation Committee made arithmetic checks in accordance with the “Financial Assessment” and that the Procurement Act also provides for the Evaluation Committee to correct “…arithmetic errors which are discovered during the examination of tenders…”
In addition, the PPC said that the form of the subject document also does not support NPTAB’s contention of the Financial Assessment not being part of the evaluation criteria.
“The procuring entity having expressly represented that “Any bidder whose bid is less than 80% of the Engineer’s Estimate will be considered “non-responsive” and that “The Contract would be awarded to the Bidder whose bid is determined to be substantially responsive to the Bid Document and who has offered the lowest evaluated Bid Price within range” is bound thereby. It cannot arbitrarily disregard same and or purport to exercise a discretion which is not expressed and of which bidders (potential and actual) would not be aware”, the PPC asserted.
A number of other problems were addressed by the PPC. This included the non-notification to Correia and Correia of the award to Kares.
Although the allegation was put to NPTAB and the procuring entity by the PPC neither NPTAB nor the GDF provided a response. Nonetheless, the PPC noted that the Procurement Act does not invalidate the tender process and or provide any other sanction for non-compliance with the said provision.
Correia and Correia further alleged that the contract award was not published in the public domain. It stated in its letter of complaint to the PPC dated March 5th, 2024, that-
A comprehensive search of the NPTAB website does not list this contract and attached an Excel spreadsheet of the CSV file of awarded contracts downloaded from the NPTAB website, and
It did not see any information published in the newspapers.
The PPC said that the complainant “appropriately expressed” that, “transparency is of paramount importance for contracts funded by public/government sources; and especially for public works contracts of this size, scope, and complexity.”
The PPC noted that the Procurement Act mandates that: The procuring entity shall publish notice of procurement contract awards within seven days of awarding such contracts.
In response to the PPC’s query as to whether the contract award was published on NPTAB’s website and if so the date of publication, NPTAB stated in its correspondence to the commission dated April 3rd, 2023, that-
“… we would like to confirm that the decision regarding the contract award has been officially published on the NPTA’s website, as mandated by Section 11 of the Procurement Act, Cap. 73:05. You may access this information through the following link: https://www.npta.gov.gy/tenders-awarded/”
The PPC through its Operations Department, made a search of the NPTAB website on March 7th, 2024 for the subject contract award. The Report of the Operations Department by way of Memorandum dated March 26th, 2024, states-
“On March 7th, 2024, on the direction of the Chairman, a check was conducted to verify if the said project was awarded. It was not seen as the time on the website. However, the NPTAB officer was contacted, and I was told by the officer to keep checking. Further, checks were conducted on the said day, and it was then seen posted on the website. When I checked the website again today, March 26th, 2024, the award was no longer there. However, there is no mechanism in place on the website to indicate the date when the award was published”.
When a check was later made of the NPTAB website, and as recent as May 23rd, 2024, the contract award appeared there.
The PPC said: “The publication of contracts is of upmost importance not only for information and related transparency purposes, but also for the lodging of a ‘Bid Protest’, the statutorily prescribed time for lodging therefor being calculated from the date of “publication of the contract award decision”.
It is unclear what the PPC’s referral of the matter to the Auditor General’s Department will achieve. The PPC has been criticized for not taking decisive action to rectify clear breaches of the procurement act. It has cited privity of contract as an issue and repeatedly pointed to the need for legislative amendments to the Procurement Act.
