Despite receiving large advances, a contractor has failed to deliver a water ambulance and a fibre glass boat for Region Six.
This is according to the 2017 Auditor General’s report, which has also found that the same contractor was awarded a contract to supply a bulldozer despite failing to meet the stipulated criteria.
The report, which was tabled in the National Assembly last month, said the Regional Administration entered into two contracts with the contractor for the supply and delivery of one water ambulance on November 7th, 2017 and a fibre glass boat and engine on July 17th, 2017 for the sums of $23.1 million and $8.8 million, respectively.
However, the contractor, who was identified earlier this year as K&P Project Management, “failed” to honour the terms of the agreement by not delivering these assets, even though the administration had paid over the sums of $12 million or 52% and $4.4 million or 50% of the contract price.
According to the report, it was also noted that the procurement of the fibre glass boat and engine had required the adjudication at the level of the National Procurement and Tender Administration Board (NPTAB) but were instead awarded through the Region’s Board.
Further, it was observed that the contract agreement between the two parties for both procurements was “incorrect since the terms and conditions specified in the contract are relevant to that for construction works and not purchases.”
At the time of reporting, two cheques in the sum of $10.878 million and $4.312 million, dated December 30th, 2017, were at the region’s Sub-Treasury office. These cheques, according to the report, were prepared for the supplier as the outstanding balances for the two contracts.
In response, the region explained that to date two engines and the medical equipment were received for the water ambulance and the fibre glass boat. “…the water ambulance and the fibre glass boat were not yet received,” the region, however, said.
As a result, the Audit Office recommended that the Regional Administration make every effort to ensure all items paid for are delivered.
Meanwhile, the report said that the same contractor was awarded a contract to supply the region with a bulldozer.
It was stated that the Regional Administration had budgeted under its capital programme for the year the purchase of a bulldozer at a budgeted cost of $15 million. The Regional Executive Officer stated that the purchase of a D3 bulldozer in 2017 was approved by the Council at a meeting held in August, 2016 but an examination of the minutes of that meeting which was held on August 8th, 2016 revealed that such a purchase “was not explicitly stated as one of the items approved by the Council at that meeting.”
The Regional Administration referred the tendering of this piece of equipment to NPTAB, since the budgeted cost exceeded the Region’s tender limit of $14 million as outlined in the Procurement Act, the report said.
It added that the Audit Office had conducted a special investigation into this matter and a report was issued on August 3rd, 2018. The investigation found that the supplier was awarded the contract even though there was no evidence that he satisfied the criteria, which stipulated that the supplier must have supplied equipment of a similar nature; the Regional Administration and the supplier signed a construction contract instead of a supply contract, which resulted in irrelevant terms and conditions of the contract; and a performance security was not enforced.
The investigation also found that the specific special conditions of the contract were not adhered to, especially as it related to the submission of key documents and an advance payment of approximately 52.69% of the contract sum was paid to the supplier, even though the contract did not make provision for such payment.
Additionally, it was discovered that a physical inspection revealed that the chassis plate on the bulldozer indicated that the equipment was a D4, though the Regional Administration had invited bids for a D3 bulldozer and the supplier submitted bid for a D3 bulldozer and it was observed that the equipment had various defects.
The Audit Office found that the the Regional Administration had written the contractor on January 11th, 2018, instructing him to remove the D4 bulldozer and supply the D3 bulldozer as specified in the bid document.
The contractor has since removed the equipment and the Regional Administration had levied the performance guarantee in the sum $14.8 million, which was received and deposited in the Consolidated Fund on June 25th, 2018.
