Guyana’s top court, the CCJ yesterday explained how the GGMC had breached the law in 2013 in awarding a road contract to Chunilall Baboolall.
On 4 June 2021, the Caribbean Court of Justice (CCJ) dismissed an appeal against a decision of the Court of Appeal of Guyana in the consolidated matter of Guyana Geology and Mines Commission v BK International and Chunilall Baboolall; and Chunilall Baboolall v BK International and Guyana Geology and Mines Commission [2021] CCJ 13 AJ (GY). On that date, the Court stated that it would give the reasons for that dismissal at a later date.
Yesterday, the Court issued those reasons. In a press release on its decision, the CCJ said that around June 2013, the Guyana Geology and Mines Commission (GGMC) invited bids through a public advertisement for the rehabilitation of the Aremu Road in Region 7. The advertisement stated that bidding would be done according to the Procurement Act Cap 73:05.
The summary said that the GGMC shortlisted four “prequalified” entities to submit bids but only three responded to the invitation: CB&R Mining (“CB&R”); MMC Inc; and BK International Inc (“BK”). BK tendered the lowest bid and CB&R’s bid lacked certain important documentation. “Nevertheless, GGMC contracted with Baboolall, on behalf of CB&R, to execute the road rehabilitation works”, the CCJ noted. BK was dissatisfied with the GGMC’s decision and initiated an action in the High Court to invalidate that decision.
At the High Court, the CCJ said that GGMC contended that it was not a “procuring entity” as defined in the Procurement Act Cap 73:05 and was therefore not required to follow the procurement procedures in the Act. The CCJ noted that the statutory definition of a procuring entity included Government agencies, but GGMC argued that it was a private body in law. The Guyana High Court rejected that argument, holding that GGMC was a public agency under the Ministry of Natural Resources and the Environment. GGMC and Baboolall, appealed this High Court decision to the Court of Appeal but that Court agreed with the High Court and dismissed the appeal.
GGMC and Baboolall subsequently appealed to the CCJ, which then identified three issues for determination: (1) was the GGMC a “procuring entity” under the Procurement Act? (2) was judicial review available to challenge GGMC’s decision to award the contract to Baboolall?; and (3) did GGMC comply with the Procurement Act?
Justice Winston Anderson who delivered the judgment of the CCJ stated that the GGMC was a government agency because of three main factors: (1) the public nature of its functions; (2) the extensive ministerial control exercisable over it; and (3) the sources of its funding included inflows from the Government.
“As an agency of the Government, GGMC fell under the definition of a procuring entity in the Procurement Act and, therefore, had an obligation to conduct bidding according to that Act. (Justice Anderson) also found that judicial review was available to BK because GGMC was conducting a public function, that is, a road rehabilitation project, where the funding came from the Government”, the press release said.
Further, Justice Anderson considered that BK had a legitimate expectation that GGMC would adhere to the Procurement Act. The judge then determined that there were several instances where the GGMC had not complied with the Procurement Act; for example, the rejection of BK’s bid was not done in accordance with the Procurement Act. Further, there was no proof of how CB&R, or any of the bidders for that matter, were “pre-qualified”.
Justice Jacob Wit in a concurring opinion, added that judicial review in a constitutional democracy like Guyana must be brought under the umbrella of constitutional values and principles. Doing this, he said, broadens the scope of judicial review. Justice Peter Jamadar underlined that in countries with written constitutions, courts must ensure that administrative decisions accord with fundamental constitutional and human rights values and principles.
Decision
In his decision, Justice Anderson noted that the GGMC grounded its appeal to the CCJ in the argument that it was not a government or statutory agency subject to the Procurement Act and that, in any event, it had complied with the requirements of that Act. It also contended that the Court of Appeal erred in accepting the evidence given at the High Court pertaining to the documents which had been submitted by CB&R in the bidding process. The GGMC highlighted that it was stated in the Invitation for Bids (IFB) that it reserved the right to accept or reject bids for any reason, and that the IFB only required updated documents to be provided from pre-qualified bidders. The Commission further maintained that it was a private agency in law and did not fall within the definition of a “procuring entity” under s 2 of the Procurement Act. It was of the further view that the statements contained in the foreword of the Standard Bidding Documents that: the document “has been prepared by the National Procurement and Tender Administration”; and that it “complies with the Procurement Act 2003 and the Procurement Regulations 2004”, were statements of fact of what had been done, and not commitments by the GGMC to comply with the provisions of the Procurement Act.
Justice Anderson said that the GGMC further contended that it had not acted unfairly. It said that the Special Projects Unit determined that BK’s bid was 55 percent less than the Engineer’s estimate for two items which formed most of the works, and that this had raised a concern as to the feasibility of the bid. The Special Projects Unit determined that CB&R had the technical and financial competence to execute the project efficiently. The Tender Evaluation Committee followed the recommendation of the Special Projects Unit. As such, the decision made was rational, Justice Anderson said.
The GGMC also argued that this was not a case fit for judicial review as there were contested facts such as whether certain documents had been provided by CB&R. This could only be resolved by cross examination, it said.
In his decision, Justice Anderson said that whether an entity qualifies as a procuring entity and is therefore bound to comply with the relevant provisions of the Procurement Act is a matter of statutory interpretation. He noted that Section 2(l) of the Procurement Act defines a “procuring entity” as “… the procuring entity of any ministry, department, agency or other unit, or any subdivision thereof, of the Government, that engages in procurement.” There are two main elements to this definition. First, the entity must be situated in a particular relationship with the Government and second, it must engage in procurement.
Justice Anderson said that the relationships that qualify an entity as a procuring entity are set out in s 2(l). A ministry, department, agency, or other unit of subdivision of Government is encompassed by the Procurement Act. Justice Anderson noted that then Chief Justice Chang conducted a careful review of the constitutional and statutory provisions as well as the case law and concluded that GGMC was a statutory agency within the Ministry of Natural Resources and the Environment. Justice Anderson noted that the Court of Appeal agreed with the reasoning of the then Chief Justice but made the slight distinction that the GGMC was not an agency of the Ministry of Natural Resources and the Environment but rather it was an agency of the Government falling under the purview of that Ministry.
“This Court agrees. The GGMC was established as a body corporate under s 3 of the Guyana Geology and Mines Commission Act and conferred with the functions, among others, of constructing roads for the transport of minerals and mineral materials and of assisting in providing access to mineral areas (s 4). Section 31(1) empowers the Minister of Natural Resources to give directions to the Commission of a general character as to the policy to be followed in the Commission in the performance of its functions and requires the Commission to give effect to those directions. The Commission is also required to carry out such measures of reorganisation or such works of development as involve a capital outlay on capital account in accordance with a general programme prepared by the Minister (s 31(2)); provide to the Minister information requested by him and the means of verification of that information (s 31(4), (5)). The Minister has statutory power to give directions to the Commission regarding the disposal of capital assets and the application of proceeds of such disposals (s 31(6))”, Justice Anderson said.
As an agency of government, Justice Anderson said that the GGMC was clearly “a procuring entity” that engaged in “procurement” and therefore came within the governance of the Procurement Act. “That Act governs the public procurement process and is underpinned by three fundamental principles: equal treatment or non-discrimination; transparency; and confidentiality of tenders”.
Justice Anderson added that Under s 2(j) of the Act, “procurement” is defined, inter alia, as “the acquisition of construction, consulting and other services”, which is precisely the activity undertaken by the GGMC when it sought to secure a contractor to rehabilitate the Aremu Road in Region 7. Section 4 of the Procurement Act, he noted, expressly provides, in respect of procurement by a procuring entity that, “The provisions of this Act shall apply to any procurement unless they conflict with any provisions made applicable by virtue of any international agreement.”
Justice Anderson said that the Court is mindful of the concerns expressed by Counsel for the Appellant that a finding that the Commission is a procuring entity within the meaning of the Procurement Act could have implications for scores of tendering contracts by statutory bodies which may not have considered themselves bound by the Act.
“This Court can only deal with the case before it and makes no decision regarding the contract of any statutory body not party to these proceedings. It should be said, however, that the nature of the statutory function being performed, the relationship of the statutory body to the Government, and the source of funding for the project in question will be significant in deciding whether a body is to be properly recognised as an agency of government and a procuring entity under the Procurement Act”, the judge said.
Justice Anderson also found that there was a legitimate expectation by BK that the GGMC would comply with the procurement law.
“In the present case, the invitation by way of public advertisement for bids to rehabilitate the Aremu Road specifically stated that, `Bidding will be conducted through the National Competitive Bidding procedures, specified in the Procurement Act 2003 …’. This did not, by itself, mean that the Commission became a procuring entity within the meaning of s 2(l) of the Procurement Act. Especially since it was admitted by Deputy Commissioner Newell Dennison in his Affidavit in Answer that the National Competitive Bidding Procedures, based on which the GGMC undertook to rely in conducting its bidding process, are not referred to in the Procurement Act or the Procurement Regulations. It did mean, however, that the Commission held out in its IFB that it would be bound by the provisions of the Act and the National Bidding Procedures. For the GGMC to resile from that representation, without lawful justification, would lead to the frustration of the legitimate expectation of bidders on it”, Justice Anderson stated.
He said that the Court is therefore of the view that even if GGMC could not be considered a procuring entity within the meaning of the statute, the Commission had created a legitimate expectation that it would abide by the relevant provisions of the Act and the Commission could not be permitted to shirk meeting that expectation without affording an opportunity to (BK and the other bidders) to be heard.
“The GGMC was obliged to comply with the relevant provisions of the Procurement Act because (1) it was a procuring entity within the meaning of the Procurement Act; and (2) it created a legitimate expectation that bidding for the road rehabilitation project would be conducted in accordance with the Procurement Act. There are clear advantages to bringing challenges to the procurement process under the administrative review processes available under the Act and the Court will normally be astute to ensure that this is done. However, in the present case, the nature of the complaints justified recourse to judicial review as provided for under the Judicial Review Act. The GGMC misapplied the “Standard Bidding Documents” to the procurement process in this case, given the value of the contract. Further, and more substantially, it failed to comply with the prequalification process specified in the Act”, Justice Anderson said.
It is for these reasons, he said, that CCJ issued two orders on 4 June 2021 dismissing the appeal and directing the payment of costs to the Respondent, BK International Inc.
Nikhil Ramkarran and Rebecca Khan appeared for the Guyana Geology and Mines Commission; Edward Luckhoo SC and Robin Stoby SC appeared for BK International Inc, and Chandrapratesh Satram, Roopnarine Satram, and Ron Motilall appeared for Chunilall Baboolall.
