The consulting contract for the proposed New Demerara Harbour Bridge

On 18 September 2017, the Public Procurement Commission (PPC) received a request from the political opposition to investigate the award of the contract to LievenseCSO for the conduct of a feasibility study and design of the proposed New Demerara Bridge. The PPC completed its investigation and issued its report on 2 August 2018, the contents of which were highlighted in the media. It is not clear whether the report was presented to the National Assembly, as provided for by Article 212CC (2) of the Constitution.

 Considering that the PPC had tabled a similar report on the irregularities in the procurement of drugs and medical supplies for the Georgetown Public Hospital Corporation (GPHC), one would expect it to do likewise in respect of this report. This is especially so in the light of the political opposition’s request to the Special Organized Crime Unit (SOCU) to carry out its own investigation with a view to laying criminal charges against the Minister of Public Infrastructure. Incidentally, the GPHC report is required to be published in the newspapers within 45 days of its issue to the Assembly, but there was no evidence that this was done.

In our article of 2 October 2017, we had referred to the award of the contract to LievenseCSO amid allegations that there was a violation of the Procurement Act relating to single source procurement. The Ministry of Public Infrastructure (MPI) had explained that qualified consultants were sought worldwide, and LievenseCSO was recommended. Accordingly, the MPI selected the consulting firm through single source method with the “knowledge of the National Procurement and Tender Administration Board (NPTAB), which also granted permission for its engagement with LievenseCSO”. The Ministry further stated that the firm’s bid was subsequently found to be the best, technically and financially.

Requirements Relating to Consulting Services

A procuring entity shall issue a Request for Proposals (RFP) from consulting services firms, which have been included in a short list. Short lists are to be prepared on the basis of expressions of interest received in response to an invitation to express interest published in the newspapers of wide circulation.

When foreign firms are expected to be interested in providing the services, the notice shall also be published in a newspaper of wide circulation or in an appropriate trade or professional publication of wide international circulation. The RFP shall include: (i) the manner in which the proposals are to be prepared and submitted; (ii) the evaluation criteria and the manner in which they are to be applied; (iii) the minimum qualifying technical score; (iv) a statement informing the consultants that they may be excluded from future participation in procurement of goods, works, services or consulting services resulting from the assignment for which the RFP was issued; and (v) the draft contract.

The Evaluation Committee shall evaluate the proposals based on technical quality of the proposal, including such considerations as the consultant’s relevant experience and the expertise of its staff, the proposal work methodology and the price of the proposal. The method of selection stated in the RFP may be based on either: (i) a combination of quality and price, according to the relative weights stated in the RFP; (ii) the quality of the technical proposal within a predetermined fixed budget specified in the RFP; or (iii) the best financial proposal submitted by a bidder that has obtained the minimum qualifying score.

Where the consulting services are of an exceptionally complex nature, will have a considerable impact on future projects, or may lead to the submission of proposals which are difficult to compare, the procuring entity may select the consultant based exclusively on the technical quality of the submitted proposal.

By Section 49, the procuring entity may engage in single source procurement where the services to be procured require that a particular consultant be selected due to its unique qualifications or where it is necessary to continue a project with the same consultant. However, the contract is awarded only if the selected consultant agrees to be subjected to cost verification during the performance of the services. The contract shall indicate the accounting obligations of the consultant, including the obligation to present appropriate accounts or documents allowing for the determination of the cost of the services. The procuring entity may also negotiate the terms of the contract with the selected consultant but under no circumstances may engage in negotiations with more than one candidate simultaneously.

Sequence of events

The following table provides a summary of the sequence of events leading to the award of the contract, as outlined in the PPC’s report.

# Date  Details

1    Not stated (most likely November 2015)  Ministry of Public Infrastructure (MPI) advertised for expression of interest for consulting services for the construction of the New Demerara Bridge with a closing date of 8 December 2015.

2   8 December 2015  At the tender opening, 23 firms submitted expressions of interest, including LievenseCSO. Evaluation Committee shortlisted 12 firms, including LievenseCSO. These firms were invited to submit detailed proposals

3  16 March 2016  Only two firms submitted proposals – China Railway First Group; and MMM Group (Canada) in association with CEMCO. The Evaluation Committee’s assessment was that MMM Group achieved the minimum score of 80 points while China Railway achieved 74.9 and was therefore not eligible for further consideration. MMM Group’s financial proposal was US$848,950 which was higher than the budget of US$800,000. The Evaluation Committee recommended that MPI enter into negotiation with MMM Group with a view to agreeing on a price that was acceptable to both parties. 

4   27 July 1016 NPTAB wrote to MPI supporting the recommendation.

5   17 November 2016  MPI informed NPTAB that: no agreement was reached; the tender was annulled; the project would be re-scoped; and there would be a retender.

6    Not stated  MPI received an “unsolicited” proposal from LievenseCSO.

7    3 November 2016 MPI wrote to the Ministry of Finance to reallocate the earmarked funds for the project. Details of the reallocation were not stated.

8    10 November 2016  Ministry of Finance approved the reallocation of funds.

9   18 November 2016Minister of Public Infrastructure sought the Cabinet’s approval to use funds from the Demerara Harbour Bridge Corporation (Asphalt Accounts) to fund the feasibility study for the proposed new bridge and to commence contractual engagement with LievenseCSO as of 1 January 2017.

10    21 November 2016  NPTAB wrote to the MPI supporting the annulment of the tender and approved the retender of the project.

11   22 November 2016  MPI wrote to MMM Group notifying it of the cancellation of the tender.

12    25 November 2016  Cabinet approved of the use of G$161.5 million from the DHBC’s Asphalt Accounts to fund the feasibility study and design.

13    9 December 2016General Manager of the DHBC signed the contract with LievenseCSO at the request of the Minister of Public Infrastructure without the involvement of the DHBC’s board. The project was not included in the DHBC’s work plan.

Findings of the PPC

The following are the main findings of the PPC:

(a)   The MPI did not place any advertisement for retendering the project;

(b)  There was no evidence that any restricted procurement process was undertaken for the consultancy nor was there evidence that a request was made to the NPTAB for approval to use of single source method; 

(c)    There is no defined procedure for dealing with “unsolicited proposals” such as the one reportedly received from LievenseCSO; and

(d) Cabinet has the right to review all procurements exceeding $15 million based on a streamlined tender evaluation report adopted by the NPTAB. There was, however, no evidence of NPTAB’s involvement, and the Minister submitted the report directly to Cabinet which was a breach of the Procurement Act.  

Ministry’s Response to the PPC report

The MPI acknowledged that it had received an unsolicited proposal from LievenseCSO which had considerable technical expertise and capability. Having regard to the lengthy and rigorous process that failed to identify a suitable consulting firm, it felt that it was in Guyana’s interest to take advantage of the proposal, Accordingly, LievenseCSO was invited to make a presentation to a multi-stakeholder group comprising representatives from MPI, Ministry of Finance and other agencies.

The stakeholder group considered the presentation as being consistent with what is required for what is a complex technical matter and at a reasonable and competitive price. The fact that there are no established rules for dealing with unsolicited proposals, the Minister felt it necessary to involve the Cabinet and submitted a paper accordingly. The Cabinet approved of $103,978,580 and $57,535,740 being used from the DHBC to the fund Stages 1 and 2 of the project.

Conclusion

It is true that the NPTAB had recommended a retendering for the project. However, nearly a year had elapsed and after a rigorous process, no consulting firm fully met the specified criteria to undertake the project.  In the circumstances, one could question whether it makes sense to spend another year going through second round of procurement cycle for a project of such national importance and whether the results would in any way be different. This is especially so, considering that Section 49 of the Act allows a procuring entity to engage in single source procurement for consulting services where a particular consultant is selected due to its unique qualifications.

We have stated on several occasions that it is not within the authority of the NPTAB to approve of a particular method of procurement. The Act sets out in precise terms under what circumstances single source procurement can take place and what procedures are to be followed.

The MPI has obviously erred in not informing the NPTAB of the unsolicited proposal from LievenseSCO and not involving it in the process. It would have been interesting to learn what might have led LievenseCSO to take the time and effort, not to mention the associated costs, to prepare and submit such an unsolicited proposal. Considering it was one of the 12 shortlisted firms, was it a case where it had missed the deadline and on second thought decided to make a submission? Or, was it contacted to submit a proposal?  These questions apart, to bypass the NPTAB and engage the Cabinet directly is a breach of Procurement Regulations which provide for the involvement of NPTAB for consulting services exceeding G$5 million in respect of MPI.  The Cabinet should have also known of the provisions of Section 54 of the Act which require the NPTAB to prepare a streamlined tender evaluation report for its review.   

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