Contract splitting seen in $82.1m GECOM purchase

-nine awards made to same supplier

The Office of the Auditor General (AG) is investigating an apparent attempt by the Guyana Elections Commission (GECOM) to breach the Procurement Act by sub-dividing a contract worth $82.169 million so as to avoid cabinet scrutiny.

The 2015 Auditor General’s report, which was tabled in the National Assembly yesterday, notes that during the 2015 fiscal year GECOM expended the sum of $197.899 million for Office Material and Supplies. Included in this sum were amounts totalling $82.169 million which represented full payment on nine contracts awarded to the same supplier for the purchase of toners and cartridges.

According to Section 54 of the Procurement Act 2003 Cabinet shall have the right to review all procurements the value of which exceeds $15M. The same act in Section 14 states that a procuring entity shall not divide or cause to divide its procurement into separate contracts for the purpose of avoiding the application of any provision of the act or any regulations made thereunder.

Seven of the nine GECOM contracts which were awarded in the months of February and May of 2015 were for the purchase of toner cartridges while the other two were for the purchase of stationery and ink and stationery and Xerox cartridges respectively.  General elections were held in May of 2015.

While the total sum spent on toner cartridges was $57.653 million, none of the individual contracts reached the $15 million threshold which would have required a review by cabinet. Instead the highest sum awarded was $14.850 million.  This contract was awarded on the same day, February 3, 2015 as two other contracts totalling $12.344 million and $2.494 million respectively. It was also awarded two days before an $8.775 million contract.  The other contracts were all awarded either on May 6, 2015 or May 21, 2015.

The auditor general observed in his report that the contract awards appeared to be sub-divided which breached the Procurement Act regarding splitting of contracts and review by Cabinet. Splitting of contracts to avoid scrutiny has been a longstanding problem across a number of government agencies, ministries and constitutional bodies.

Also being investigated is the expenditure of $14.868 million for the procurement of narrow head diagonal pliers.

According to the AG’s report, of the $103.974 million allocated for Field Materials and Supplies, $68.201 million was expended as of December 31, 2016. Included in this sum was the amount spent on pliers.

The report further explains that a request for a quotation was sent to four suppliers for “high leverage diagonal cutting pliers 8 inches and narrow head diagonal pliers 6 ¼ inches.”

The suppliers provided quotations for 6 5/16 inches narrow head diagonal pliers and the lowest bidder was awarded the contract by the National Procurement and Tender Administration Board (NPTAB).

The report does not indicate why an investigation has been launched into this issue.

Radios

The Auditor General also took issue with a $99.560 million purchase of fifty High Frequency (HF) radios and related accessories of which 48 were not used.

The report details that a contract was signed on May 4, 2015 based on a Cabinet Approval dated April 28, 2015 for the purchase of the equipment. This was just days before the general election.

Using the restricted tendering method of procurement, GECOM requested quotations from three selected suppliers for the purchase of 50 Barrett HF radios. In response one supplier quoted the price of 50 Barrett HF radios, one quoted the price for 20 Barrett HF radios and the other quoted the price of 30 ICOM HF radios.

According to the AG the lower of the latter two quotations was selected and a contract signed. This contract allowed for the payment of 40% of the contract sum on signing and 60% on completion. The first sum was paid via cheque dated May 7 and the second via cheque dated July 5, 2015.

Of the radios supplied to the commission only two were used. One was issued to Chief Election Officer (CEO) Keith Lowenfield and one was issued to the commission’s sub-office in Lethem.

During this same period the commission received a donation from the United Nations Development Programme (UNDP) of 12 satellite phones and five 48 inches, flat screen televisions for use during the May 11, 2015 general elections. The commission facilitated the purchase of these items which were received by GECOM on April 30, four days before the contract for the HF radio was signed.  They were also turned over to the CEO on May 7 the same day a cheque was prepared for the payment of the first 40% of the contracted sum for the radios.

GECOM has responded to the AG’s observation by stating that the commission was unable to deploy the radios since they were received outside of the operational deployment time to train staff in their use in the remote areas which resulted in a change of plans and the donation from the UNDP which provided secure and reliable communications

The original plans for ensuring a communication system throughout Guyana were premised on the use of different mediums such as cell phones, radio, internet access and personal transmission to provide reliable, clear and accurate feedback according to the commission.

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Table showing the divisions and award of $82.169 Million worth of contracts for the purchase of toner and cartridges by the Guyana Elections Commission. All of these contracts were awarded to the same supplier.

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