A slew of procurement laws were breached when a Dutch company was awarded a $148M contract for a feasibility study for a new bridge design across the Demerara River.
This is according to a recently released report from the Public Procurement Commission (PPC), which conducted an investigation of the contract award process based on a request from Opposition Chief Whip, Gail Teixeira.
The PPC found that the Ministry of Public Infrastructure headed by Minister David Patterson, did not tender for the project.
In fact, the PPC indicated that the Ministry received an unsolicited proposal from LievenseCSO Engineering Contracting BV, to provide consultancy services for the bridge project.
According to the PPC, Patterson, by way of a Memorandum dated November 18, 2016, made a request to Cabinet seeking consideration and approval to use funds from the Demerara Harbour Bridge Corporation (DHBC).
Specifically, Patterson requested funds from the company’s asphalt plant accounts to fund the feasibility study and commence a contractual arrangement with Dutch company, as of January 1, 2017.
The PPC in its investigation found that the Minister’s request to Cabinet was not forwarded through the National Procurement and Tender Administration Board (NPTAB).
Based on the PPC report, the submission by Patterson directly to Cabinet was in breach of the Procurement Act.
“The Procurement Act and regulations make no provision for the Minister of Public Infrastructure to take a procurement request directly to Cabinet for approval of award of a contract,” the PPC report states.
The PPC report points out that while Cabinet has the right to review all procurements that exceed $15M, this review shall be done on the basis of the streamlined tender evaluation report of the ‘Authority’ which in this case is the NPTAB.
There was no such report prepared by the NPTAB.
Nonetheless, the PPC noted that Cabinet considered the Minister’s submission and on November 25, 2016, approved a total of $161,514,420 to be used from the DHBC asphalt plant accounts to cover the cost of the feasibility study for the new bridge.
In December 2016, General Manager of the DHBC, Rawlston Adams, signed an agreement with LievenseCSO Engineering Contracting BV to provide the required services.
PPC found that the procurement procedure used to select the company did not meet the requirement of any of the methods described in the Procurement Act. And there is no procedure that defines how a procurement entity should deal with ‘unsolicited proposals’.
LievenseCSO had submitted a 57-page final report, in which it recommended that the proposed location of Houston-Versailles was the most ideal – with a three-lane structure and moveable part to allow for ships to pass through.
It was the best model, at the least cost, the consultant recommended.
A number of homes will have to be removed at Houston, East Bank Demerara, with talks already started with residents.
PATTERSON ORDERS TO SIGN
The report stated that Adams informed the PPC that the Board of the DHBC was not a party to the decision to use the funds approved by the Cabinet. He further informed the PPC that he ‘had not signed the contract on behalf of the DHBC, but only because he was requested to do so by the Minster of Public Infrastructure’.
More worrisome, is the fact that he told the PPC that he was the designated project manager for the consultancy.
Kenneth Jordan, the Ministry’s Permanent Secretary reportedly told the PPC that the consultancy project, though funded by the DHBC, was considered to be a project of the Ministry. However, the PPC report noted that the contract listed DHBC, and not the Ministry, as the client.
HOW IT STARTED
Initially, the Ministry advertised for the consultancy work. The closing date for this process was December 8, 2015. Some 23 foreign and local companies submitted Expressions of Interest (EOI).
Among the 23 was a submission from Lievense with Econovision and Ace Consultancy
An evaluation committee appointed by NPTAB shortlisted 12 companies, which included Lievense and its partners.
Requests for Proposals were then sent to the 12, but only two companies – China Railway First Group Co. Ltd. and MMM Group (Canada in association with CEMCO (Guyana) – submitted proposals by the March 15, 2016 deadline.
Of the two companies, China Railway failed the technical evaluation, while MMM Group’s bid price of US$848,950 exceeded the project’s budget of US$800,000.
According to the PPC, negotiations between the Ministry and the MMM Group were unsuccessful. The Ministry subsequently informed NPTAB of its decision to annul the tender and re-scope the work with a view of retendering at a later stage.
NPTBA granted approval for the Ministry to retender the project.
The project was never retendered and questions are being raised about how Minister Patterson was able to get Cabinet approval for the unsolicited proposal.
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