Cost overruns on Jamaica projects‘frightening’ – contractor general’s office

(Jamaica Observer) The Office of the Contractor General (OCG) says that the J$1.2 billion in cost overruns on Government projects last year was just the tip of the iceberg as the true figure could be “frightening”.

The observation contained in the 25th annual report of the Office of the Contractor General to the Houses of Parliament for the 2011 calendar year ranked high amongst several “matters of concern to the OCG specifically as they pertain to construction-related contracts”. According to the OCG, of the 410 construction projects monitored by the OCG on a sustained basis throughout the reporting year, 15 were affected by cost overruns which amounted to the J$1.2 billion, which it said was still “an exorbitant amount by any standard”.

“Bearing in mind that the number of construction projects that were monitored by the OCG was minimal when compared to the number of projects that were undertaken by public bodies, overruns on projects generally should be cause for great concern. If the total for overruns on all government projects were to be captured and added the resulting amount may be very frightening, to say the least,” the OCG said.

The anti-corruption body, while noting that numerous recommendations it has made have been ignored by successive administrations, warned that “stringent measures need to be set in place to guard against such occurrences”.

“Where these occurrences could have been avoided the culpable parties should be held accountable and the appropriate penalties imposed. The same should also apply to instances of variations on projects,” it said further.

The OCG — which is now under the leadership of Acting Contractor General Craig Beresford, who is holding the fort until a successor for former Contractor General Greg Christie — noted that other issues which occurred during the pre-contract state of various construction projects last year contributed to the overruns. Namely, he said, the failure of public bodies to properly review the project site, or to conduct soil tests resulted in Bills of Quantities and expensive architectural or engineering drawings having to be revised. In some cases it caused extensive time delays as remedial works had to be performed when soil tests came back with unfavourable results.

There were also delays because the requisite approvals or permits were not obtained prior to the works being carried out. “Post-contract issues of concern included poor project management and/or poor performance on the part of contractors and consultants which ultimately resulted in increased costs to the respective public bodies. There were also instances where contractors experienced delays in receiving payment from public bodies, owing to the unavailability of funds,” the OCG complained.
In the meantime, the body said it remained concerned that government bodies continue to award contracts utilising the emergency contracting facility.

“In awarding contracts using this methodology, the public body bypasses the proper procurement procedure and thus, may not get value for money, or may otherwise engage an entity which is not registered with the National Contracts Commission (NCC), or which is registered to perform projects of a lower grade and as such is incapable of carrying out the job to the best possible standards,” the OCG pointed out.

It said it was also aware of the deliberate use of the emergency facilities by government entities which were trying to avoid the scrutiny of regulatory agencies inclusive of the OCG and also to award contracts to preferred or ‘connected’ contractors.

Contracts that were awarded by public bodies in 2011 using the Emergency Contracting Methodology amounted to J$4.1 billion. Christie, in demitting office, lamented that the OCG was “a paper tiger and a toothless bulldog” because of the lack of political will on the part of politicians to approve the needed structural adjustments. He said he had “become extremely despondent about the deafening silence of leaders both within and without the political divide and the vacuous absence of the ‘political will’ that is now desperately required to decisively combat corruption in Jamaica and to empower and support the OCG in its efforts to ensure that its mandates are effectively discharged”.

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