Indian firm to protest specialty hospital contract award

Fedders Lloyd Corporation, an Indian firm that was among the five companies that bid to build the Specialty Hospital at Liliendaal, on the East Coast of Demerara, plans to protest the award of the contract to Surendra Engineering, which it said did not meet the specified criteria to participate in the bidding process.

Fedders Lloyd Senior Vice President Naresh Chandra Soral said that after an extensive review of the procurement and award process, his company plans to file an official protest of the award to the India’s Export Import (EXIM) Bank and National Procure-ment and Tender Administra-tion Board (NPTAB) here. “We have reviewed the process from the beginning and the end and cannot see why we were not awarded the contract,” Soral told Stabroek News yesterday.

The US$18,180,000 ($3,689,616,400) contract to design, build and equip the specialty hospital, under a line of credit from the Indian government, was awarded to Surendra Engineering, which is the firm that was responsible for the Enmore sugar packaging facility.

Of the companies that bid for the contract, Fedders Lloyd had submitted the lowest one at US$17,679,000 (or $3.4 billion) and bid bond of US$500,000, which was obtained from the Scotiabank. The other bidders were the contractor that built the national stadium, Shapoorji Pallonji (US$42,473,600 or $8.4 billion), Jaguar Overseas Limited (US$15,658,000 or $3.05 billion) and the Vydehi Institute of Medical Sciences and Research of India (US$19.5 million or $3.8 billion).

When contacted about the claims by the company, Chairman of NPTAB Donald De Clou said he was unaware of the protest by Fedders Lloyd and that he could not comment on the issue at this time. “I am not aware of such. I do not know that there was any formal complaint filed,” he said, while adding that all the newspapers are aware of the process of tenders.

“I am not in a position to answer your question… I won’t be able to answer your questions,” he said when pressed as to the reasons why the company was not awarded the contract.

Several efforts to contact Junior Finance Minister Juan Edghill for comment were futile. However, a government official close to the project has said that Fedders Lloyd was not awarded the contract since it had submitted two bids—one at a cost of US$22.69M and the other at a discounted cost pegged at over US$17M. While the latter was the lowest bid, it was found that Fedders Lloyd’s bid was not clearly detailed as is stipulated.

However, the company has rejected this argument, saying that if it was not awarded based on the fact that it submitted two bids then it was the fault of the NPTAB since all it did was submit a bid with a 23% discount being its final price. “The procurement rules were not breached ever by our company as discounts are provided for and we clearly showed ours… the fact remains that our final bid was US$17.69 million and if that was not said to the NPTAB commission which awards contracts then it is the fault of the persons who opened the bids… we firmly believe that Surendra was awarded because of favouritism and not principle,” Soral told Stabroek News.

The official also said that the company takes issue with the fact that Surendra Engineering did not have the bid bond security from a local bank that was a requirement. “Guyana is sending a very bad image of their procurement process to India and the world-at-large because many investors want to come here, but if this is how the way things are done they will not,” Soral added.

No local company submitted a bid for the contract. All the companies submitting bids had to meet requirements set by government, including at least US$400,000 bid bond security from a local bank or affiliate and a constructive design model of what the building would look like, or their bids would be void. Shapoorji and Fedders Lloyd were the only two of the five companies that satisfied all of the requirements for bidding when they were opened by the NPTAB in June. Surendra Engineering and the Vydehi Institute were the only two companies that did not submit a bid security bond from a local bank at the time of the opening.

The bid security was to be, at the bidder’s option, either in the form of a letter of credit or a bank guarantee from a reputable banking institution, or a bond issued by a surety selected by the bidder and located in any country. If the institution issuing the bond is located outside the employer’s country, it shall have a correspondent financial institution located in the employer’s country to make it enforceable.

Fedders Lloyd is charging that Surendra Engineering submitted a US$400,000 bid bond from the Union Bank of India, which does not have an affiliate in Guyana, and therefore it should have been automatically disqualified.

Fedders Lloyd has also said that it is yet to get any official word from the Ministry of Health, the line ministry responsible for the tender, why it was not awarded the contract, although the NPTAB regulations stipulate that bidders must be informed of the reasons for their rejection. It also provides that after publication of the award, unsuccessful bidders may request in writing for a debriefing seeking explanations on the reason why their bids were not selected. After this request is made the NPTAB regulations say that the employer must promptly respond.

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