On August 24th, a contract valued at $566.9m was signed for the reconstruction of the North Ruimveldt Secondary School which was des-troyed by fire on June 19 last year. The Ministry of Education said in a statement that following a public tendering process the project was awarded to Kares Engineering Inc.
Ordinarily, there may have been no raised eyebrows except that the winner of the contract had been deemed to be culpable for disastrous work on the Kato Secondary School – the $728.1 million contract which had been awarded in 2013 under a previous PPP/C government – delaying the functioning of the institution and requiring costly remedial work at the expense of the contractor.
With oil revenues literally pouring into the country on a regular basis, billions and billions of dollars in public sector contracts are being awarded under the Ali administration based on the evaluations of the National Procurement and Tender Administration Board (NPTAB) committees. The cup runneth over but absolute care must be taken to ensure judicious and justifiable expenditure of public monies and this government, its ministers and public agencies must be aware that they will be under close scrutiny.
One should first be reminded of what transpired with the Kares contract for the Kato Secondary which was signed in 2013 when the current Minister, Priya Manickchand also presided over the education sector.
The school was found to be riddled with major defects after the construction by Kares ended in 2015. A tour by the Ministry of Public Infrastruc-ture of the school complex in 2016 had shown evidence of poor construction with cracked and crumbling concrete floors and walls, steel protruding from the walls, unstable safety bars, termite-infested wood, poor installation of equipment in the science lab, and cheap bathroom fixtures, among a number of other defects.
Rodrigues Architects Limited (RAL), which conducted an audit of the works had said that at least $144 million would be required to fix the defects. In the audit report, RAL stated that in addition to the fact that the works were poorly done, the engineering design information was incomplete and unreliable for construction. In addition, it pointed out that the bills of quantities were scant and in many instances imprecise and not reflective of the remote location of the project.
Based on the general poor quality of concrete work, reduced steel reinforcement and numerous substitutions of materials, RAL concluded in the report that the construction was poorly done to maximize profit. A damning report that would make anyone think hard about awarding another such contract to Kares. Indeed, then Presi-dent Granger had declared that Kares would no longer receive government contracts
There are two issues that are now germane to this contract. The first is the debarment of contractors who perform major contracts in a shoddy manner. Immediately upon the Kato scandal, the development of debarment guidelines was taken up by the NPTAB and the Public Procurement Commission (PPC). Said guidelines when developed led to the historic debarring of 13 companies and persons in October 2019, 12 of them to replicate debarment by the Inter-American Development Bank and one on the basis of an application by an agency here.
It is unknown whether the former PPC headed by Carole Corbin was ever asked to consider debarment of Kares on the basis of an application or in its own deliberate judgement but the life of that body came to an end in 2019 and amid the tumult surrounding the March 2 2020 general elections and the PPP/C’s disinterest in regulatory bodies it was only on July 1st this year that a new procurement commission was installed. Hopefully, this commission will show some energy in contemplating how companies like Kares should be considered in relation to disastrous projects that they have presided over.
The second matter of interest is the role of the evaluation committees of the NPTAB – the ones that essentially make decisions on who should be awarded contracts. Are their evaluations sound and can they stand up to scrutiny? During his budget presentation this year, Minister in the Office of the President with responsibility for Finance, Dr Ashni Singh described improvements that were being made to the NPTAB.
In part, he said that the three-person NPTAB evaluation committees have been remodelled and that those sitting on the committees will be drawn from persons and sectors other than from the procuring entity.
“This was aimed at correcting fundamental checks and balances and control inadequacies that were prevalent under the previous administration, where the chairpersons of the evaluation committees were the same persons that chaired the ministerial or regional tender’s board,” he said.
He had also averred that “The business of the (NPTAB) board is captured, in structured minutes for each board meeting, and is kept for future examination as is necessary. This is in contrast with the ad hoc arrangements under the previous APNU+AFC government”. There may be good reasons for the minister and the public to examine the minutes pertaining to the award of the Kares contract.
Despite having only the third lowest bid, the NPTAB awarded the contract to Kares. The bids for the reconstruction of the school were opened on June 23, 2022. Some nine companies were on record as having submitted bids for the project which is estimated to cost $622,375,321.
According to the NPTAB’s website the following bids were received – Platinum Investments Inc $679,122,111; Dry Rock Construction Inc $687,163,051; QCD Construction Inc $521,690,454; M&P Investment $606,636,675; S&K Construction Consultancy Service & General Supply $595,000,000; Dundas Construction Inc $ 620,000,000; CB General Contracting Service Inc $531,787,715; Builders Hardware General Supply & Construction $614,853,630 and Kares Engineering Inc $566,975,350.
What weight was assigned at all to the fact that only years ago, Kares had presided over the poor construction of a major school? Were the other two bids below Kares not responsive? Should the bids higher than Kares not have warranted consideration given the track record of the company? These minutes should make interesting reading and if Minister Singh is good to his word he should move to have them released.
The decisions of the evaluation committees of the NPTAB were questioned last November in relation to another school contract award to St8ment Investment, whose principals are the owners of the entertainment company Hits and Jams and football promoters Kashif and Shanghai. They were awarded a $346m contract for a Primary School at Bamia/ Amelia’s Ward, Linden when they had no track record at all in construction.
The evaluation committees are also at risk of political interference. According to the Procurement Act, the Evaluation Committee using only the evaluation criteria outlined in the tender documents has to evaluate all tenders, determine which tenderer has submitted the lowest evaluated tender, and convey its recommendation to the procuring entity within a reasonable period of time, but not longer than fourteen days.
According to the Act, the procuring entity shall, if it agrees with the Report of the Evaluation Committee, publicly disclose the name of the tenderer identified by the Evaluation Committee as the lowest evaluated tenderer. If the procuring entity does not agree with the Evaluation Committee’s determination, the procuring entity shall issue an advisory recommendation to the Evaluation Committee regarding which bidder should be the lowest evaluated bidder, “which recommendation the Evaluation Committee shall observe”.
As noted in the Stabroek News editorial of November 15, 2021 ”There is a lot of room in these provisions for the selection to go awry and the Procurement Act is ripe, as are many others, for amendment”.
Given all the issues raised and the apparent good relations between PPP/C governments and Kares, the NPTAB must defend this award.
