BK to challenge $3.5B Mazaruni Prison contract in court

-accuses procurement body chair of prejudicing inquiry

With the execution of the $3.5 billion contract for the Mazaruni Prison expansion proceeding despite a protest to Public Procurement Commission (PPC) over the award, BK International Inc. has decided to seek redress from the High Court.

“I am moving to the court because if you read what the PPC [Chairperson] said, it made no sense going to them,” Chief Executive Officer of BK International Inc. Brian Tiwarie told Sunday Stabroek.

The company recently lodged a protest with the PPC over the award of the $3.5 billion contract to the joint venture between local company Nabi Construction and Trinidadian Kee Chanona Limited and a key part of its complaint was the alleged “overnight” increasing of the stated engineer’s estimate for the project from $2.8 billion to $3.1 billion.

PPC Chairperson Carol Corbin has said that although an investigation is underway, the execution of the contract would proceed as there is no provision to halt it once it is already underway. “The law says that once the contract has started, you cannot have an administrative review,” Corbin told this newspaper.

But a statement issued on Friday by the company’s attorney, Carmilita Jamieson, said BK International Inc. was not given the opportunity to seek an administrative review, while noting that the time that elapsed between the opening of the bids and the signing of the contract violated the timeline specified in the Procurement Act. It said it was on this basis that it sought the intervention of the PPC in the hope that it would stop the contract, conduct investigations and pronounce on the case. As a result, the company said it was disappointed by Corbin’s pronouncement that the contract could not be halted.

Corbin had explained that she did not want to speak on the protest but noted that once the execution of the contract had started, the company could not be granted an administrative review.

She had also explained that all was not lost for the contractor as once a decision was made by the PPC, it could guide the company on its next course of action. “A PPC finding will guide the contractor on what their next action is. If they do nothing or take some other step. Whatever we come up with, it will just support whatever they do. If we determined something that was done should not have been done, that gives them substance to take the matter further,” she added.

The PPC Chairman made clear that the investigation was in its preliminary stage.

However, from information gathered, the company had already engaged the procuring entity, the Ministry of Public Security, on why its bid lost and had received a reply. According to the Procurement Act, a company has five working days following the publication of the contract award decision to file with the procuring agency its protest of a contract.

BK had said that it wrote the procuring entity on December 29th, 2017 to highlight its concerns over what it considered breaches of the Procurement Act and the non-consideration of the project. It wrote to the PPC on January 10th, 2018.

“After receiving a formal response from the Ministry of Public Security and the reasons why BK Inc. was not considered for the contract, BK Inc. immediately responded, effectively countering all the reasons given for the failure of the Company to secure the contract. Additionally, BK Inc. requested the intervention of the PPC in light of the contract being awarded to another Company, firstly, being unknown to BK Inc. as one of the bidders, and secondly, in breach of the Public Procurement Act,” Jamieson noted in the company’s statement.

BK’s main contention was the changing of the engineer’s estimate.

When the Department of Public Information announced on October 17th, 2017, that bids were out for the project, it stated that the estimate was pegged at $2.8 billion. On December 21st, when tenders for the project were opened, however, the engineer’s estimate was announced as $3.185 billion.

But Corbin explained that while the investigation was only in its preliminary phase, what had been gathered was that an engineer’s estimate was never given when the project was advertised but a “cost estimate” from the procuring entity. “Their primary contention is that the engineer’s estimate was changed overnight, just prior to their submission of the tender. They have received notification from the procuring entity that they were not awarded the contract because of certain issues. They have written the procuring entity, the procuring entity responded to them and advised them that they were not awarded the contract and gave them the reason why. So their main contention is that the engineer’s estimate was changed within a very short timeframe just before the opening of the tender,” she noted.

“But in actual fact, the engineer’s estimate is opened at the same of the time with the tenders. So what they had seen in the ad was a cost estimate for the project. It was not specified that was the engineer’s estimate. So far, the information is there was a cost estimate that was advertised but the engineer’s estimate was opened at the same time that the tender documents were opened and that engineer’s estimate was different from the cost estimate. That is information we have so far and we are following up right now to confirm all of those issues,” she added.

In inviting bids for projects, most procuring entities give a cost estimate and while some may use the term “engineer’s estimate,” in most cases it represents the budget allocation.

But while for most government projects engineer’s estimates are given on the day tenders are opened, some international organisations, such as the European Union, would state the project estimate for consultation contracts in their advertisements.

BK contends that the PPC can quash the contract if it finds law breaches and said it is nonsensical if it cannot rescind the contract.

“BK Inc. does not subscribe to the fact that the PPC is not empowered to authorise the rescinding of a contract if it is in breach of the law. How else will one get justice if there is no remedy by a Constitutional agency set up under the Constitution to “investigate complaints” and “provide remedial actions”?” it questioned in its statement.

It also took umbrage at Corbin’s suggestion that if dissatisfied with the PPC’s findings that the company could seek redress in court. It questioned why go through the frustration of complaining and highlighting wrongdoing and then be left with the only alternative of civil litigious proceedings.” It is the company’s firm belief that without seriously addressing the concerns raised…, the Chairperson attempted to adjudicate publicly on the matter giving opinions of the procuring entity, without examining all the facts,” it added.

According to the BK statement, Corbin made statements it believes were “highly inaccurate and highly prejudicial” and has the propensity to scare other bidders from complaining to the body.

“The Chairperson has thus prejudiced the inquiry by her alleged statements. It is a bold statement which should have been delayed. Moreover, the statement by the Chairperson that nothing can be done if the contract has been consummated will surely make a mockery of the system and the Commission… It is likely that the Commission will merely highlight breaches but will fail to provide any remedies,” Jamieson added before saying that the company does not know whether it can expect justice given what has happened.

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