PPC flags award of $2.1B GDF wharf contract to Kares Engineering Inc.

Jun 27, 2024 News

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…Hughes calls for structural changes, law amendments for NPTAB

Kaieteur News – The National Procurement and Tender Administration Board (NPTAB) is once again under scrutiny for allegedly flouting procurement guidelines. This time, the award of a $2.1 billion Guyana Defence Force (GDF) wharf project to Kares Engineering Inc., is under the microscope despite the company missing the benchmark for being a responsive bidder.

Correia and Correia Ltd, feeling wronged by the decision, lodged a complaint with the Public Procurement Commission (PPC).

The complaint included allegations that Kares Engineering’s bid was “non-responsive based on the Financial Assessment within the Evaluation Criteria” and therefore should not have been awarded the contract.

The PPC noted in the findings that NPTAB’s response to queries was deemed inadequate. In a letter dated April 3, 2024, NPTAB claimed that the “Financial Assessment” did not form part of the evaluation criteria, asserting that discretion was used to ensure the best cost-value outcome. However, the PPC found this explanation “inherently contradictory and inconsistent with the Report of the Evaluation Committee.”

The PPC’s findings indicated that Kares Engineering’s bid was 77.8 percent of the Engineer’s Estimate, below the 80 percent benchmark set in the evaluation criteria. In contrast, Correia and Correia’s bid was at 82 percent. The PPC noted that S. Jagmohan Construction and General Supplies Inc. would have been the lowest evaluated bidder but did not lodge a complaint.

Correia and Correia Ltd. further complained that the contract award was not published, hindering the ability to lodge timely objections.

Early December 2023, eight contractors submitted their bids to NPTAB for the project. The firms are: R. Basso & Sons Construction Company – $5,688,972,220, S. Jagmohan Construction & General Supply Inc. – $2,146,098,430, Correia & Correia Limited – $2,176,084,034, Arjune Construction Inc. – $2,063,024,470, Memorex Enterprise – $2,950,673,991, Kares Engineering Inc. – $1,839,524,630, Ivor Allen – $5,942,806,223, and Gordon Winter Co. Limited – $5,191,750,016.

By December 27, 2023 the project was awarded to Kares Engineering. To this, the PPC underscored the importance of transparency, stating, “The publication of contracts is of utmost importance not only for information and related transparency purposes but also for the lodging of a ‘Bid Protest’.”

The PPC’s investigation revealed inconsistencies in the NPTAB’s contract publication process, adding to concerns about transparency and accountability. While the NPTAB claimed the contract award was published on its website, the PPC’s checks indicated otherwise, undermining confidence in the procurement process.

The PPC, after investigating the complaint, issued a Summary of Findings on June 7, revealing significant irregularities. It stated, “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”.

Meanwhile, Alliance for Change (AFC) party member Nigel Hughes issued a statement on Wednesday calling for significant structural changes to the NPTAB. Hughes criticized the current structure for its persistent failures and lack of representation from essential professional bodies, civil society, and the Opposition.

He pointed out that the NPTAB does not include members from the Guyana Association of Professional Engineers or the Guyana Association of Architects, and also excludes civil society and Opposition representatives, which he argues undermines the board’s integrity and fairness.

Recent exposures have highlighted the biased nature of the NPTAB under the current administration, Hughes said. He cited a controversial $865 million contract awarded to a company owned by ‘Guyanese Critic’, which has sparked allegations of favoritism and lack of transparency. Another instance Hughes mentioned was the $2.1 billion contract awarded to Kares Engineering Inc. for the construction of a wharf for the Guyana Defence Force (GDF), despite the company’s financial submissions being deemed non-responsive.

Hughes highlighted that these examples reflect a broader pattern of nepotism and mismanagement that erodes public trust in the government. He called for an urgent review and amendment of the legislation governing the NPTAB to ensure representation from professional bodies, civil society, and the Opposition.

“These issues are not just administrative failures; they are an affront to the people of Guyana,” Hughes stated. “We must strive for a system that reflects our commitment to transparency and fairness. Better must come.”

The AFC member call for reform underscores a growing demand for accountability and improved governance in Guyana’s public procurement processes.

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• amendments, Chairman of the NPTAB, Guyana Defence Force (GDF), Kares Engineering Inc., Tarachand Balgobind

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