In our article of 9 October 2023, we discussed the award of the contract for the construction of a sluice pump station at Belle Vue, West Bank Demerara, to Tepui Group Inc. in the sum of $865.5 million. This was in the light of Member of Parliament, David Patterson, requesting the Public Procurement Commission (PPC) to investigate whether the award of the contract was above board. Mr. Patterson contended that the company was not eligible for the award since it did not have the requisite experience stipulated in the bid documents, that is, successful completion of projects similar in nature and size within the last three years. Tepui Group was formed in August 2022, while the invitation to tender for the works was advertised in May 2023.
We examined the issue and after careful analysis, we concluded that has been a violation of Sections 39 (2), 39 (5)(a) and 39 (6)(a) of the Procurement Act for the following reasons:
The Evaluation Committee did not adhere to the evaluation criteria set out in the bidding documents to determine the lowest evaluated bid. The Act is clear that only the evaluation criteria set out in the bidding documents must be used.
Tepui Group was formed just ten months before the works were advertised and therefore did not meet the eligible criteria in terms of experience as set out in the bidding documents.
The contract was not awarded to the lowest evaluated bidder but rather to the third lowest responsive bidder. The lowest responsive bid and the lowest evaluated bid are not the same. The latter is arrived at after all evaluation criteria, in addition to price, are qualified in monetary terms.
The advertisement of May 2023 solicited bids for four sets of works, including the construction of a sluice pump station at Belle Vue. Each of these had its own Engineer’s Estimate and attracted separate bids of varying amounts. It follows that the evaluation of the bids for each of these works should have been undertaken separately to arrive at the lowest evaluated tender. In this regard, the Evaluation Committee ought not to have evaluated the bids for one set of works (in this case, the construction of the sluice pump station at Belle Vue) and apply the results to the others works, notwithstanding that they might be similar in nature and complexity.
Additionally, we commented on the functioning of the National Procurement and Tender Administration Board (NPTAB) whose chairperson is also the Head of the Project Cycle Management Division of the Ministry of Finance responsible for monitoring the implementation of the Public Sector Investment Programme. The official therefore holds two full-time positions and may be in a position of conflict of interest. Section 16(4) the Procurement Act specifically requires the chairperson to serve on a full-time basis.
We also expressed the view that the operations of NPTAB needs to be critically examined to ascertain to what event it is functioning without undue influence from the political directorate, especially considering that the Minister of Finance appoints the seven-person board, with the chairperson having a reporting relationship to him.
In today’s article, we highlight the findings and recommendations of the PPC as regards the complaint from Patterson on the award of the contract for the construction of a sluice pump station at Bell Vue, West Bank Demerara.
Investigative role of the PPC
Article 212AA requires the Commission to, among others, investigate: (i) complaints from suppliers, contractors and public entities and propose remedial action; and (ii) irregularity and mismanagement and propose remedial action. Additionally, the PPC may initiate investigations to facilitate the effective functioning of public procurement systems.
Request for submission of documents
The Commission requested Mr. Patterson to submit any documents he had in support of his complaint but did not do so. The Commission also requested NPTAB to submit seven sets of documents, but it only submitted two sets – the Evaluation Committee’s report; and Tepui Group’s bid. A similar request was made to the National Drainage and Irrigation Authority (NDIA), the procuring entity. A reminder was sent to NDIA, and after more than two months of the initial request, the Authority submitted three sets of documents. The PPC noted that neither NDIA nor NPTAB submitted any information to permit investigation until the Commission made a public disclosure of their failure to so.
We note that Article 212DD (1) provides for Parliament by law to ‘make provision for offences and penalties for non-compliance with any requirement, or decision of, or provision relating to the Commission’. We are not aware of the existence of any such provision and therefore we would have thought that the PPC would have made a recommendation to this effect.
PPC’s response to enquiry from Mr. Patterson
Mr. Patterson enquired from the Commission whether an instruction was issued to NPTAB, to place the contract on hold. This was to prevent Tepui Group from ‘benefitting from taxpayers monies due to an illegally awarded contract’, if the PPC determines that the tender was incorrectly awarded. The Commission responded by referring to Section 53(5) of the Act dealing with administrative review. That section relates to a bidder who has filed a protest with the procuring entity and requires the final contract award to be suspended during the period of the review. The protest must be lodged within five business days of the publication of the contract award decision. According to the PPC, Mr. Patterson was not a bidder and therefore this course of action is not provided for under the Act. However, by Section 52 (1), if the procuring entity fails to respond to a complaint from an aggrieved bidder within the five business, the bidder may refer the matter to the Commission in which case, final contract award is suspended during the period of investigation.
Considering that the Commission agreed to investigate the complaint from Mr. Patterson, it is unclear whether Section 53 (5) can be made applicable. The PPC argued that ‘on the entry into a contract, privity of contract issues arise [sic]. There is nothing within the statutory framework which permits the commission to revoke, rescind, recall and or in any way alter, suspend or stop the contract once entered’. Article 212AA, however, makes it clear that the Commission is required to propose remedial action once there has been a violation and therefore it can be argued that recommendation for the suspension of the contract could be one of the remedies.
The PPC emphasized the need for bidders to be vigilant, considering the short timeframe within which to file a complaint. One would have thought that Commission would have recommended that the Act be amended to not only extend the timeframe to say ten business days for the filing of a complaint but also to allow for other stakeholders, particularly Members of Parliament, to file complaints with the procuring entity and the Commission. However, it is well-known among the business community that aggrieved bidders are reluctant to file complaints for fear that they may be discriminated against in relation to future award of contracts. Where does that leave us?
Evaluation criteria relating to experience
According to the bidding documents, the tenderer must ‘demonstrate specific construction experience by providing copies of contracts with previous clients that show the bidder has completed one (1) project of similar nature within the past five (5) years. (Similar projects shall include pump stations, sluices and drainage structures)’.
Tepui Group submitted two contracts that it entered into for the upgrading of road in the Diamond area and the construction of a concrete wharf at Providence. At the time of the bid submission, the related works were 20 percent and 30 percent completed, respectively, according to the electronic submission of the bid documents. However, the original bid showed 80 percent and 100 percent completion. NPTAB contended that that ‘the information provided in the original bid document takes precedence’. The fact of the matter is that these works were not completed in their entirety, and they were not in the nature of ‘pump stations, sluices and drainage structures’.
NPTAB argued that: (i) there were similarities between the construction of sluice and pump station at Bell Vue, and those of the two projects undertaken by Tepui Group; and (ii) the decisions regarding bid evaluation were consistent with past practices, where ‘leniency was extended to bidders lacking direct pump station construction experience but demonstrating proficiency in similar projects’. It provided two examples in support of its argument: the construction of pump station at Devonshire Castle, Region 2 and similar works undertaken at Den Amstel, Region 3. NPTAB further stated that similar leniency was given to the successful bidders for the other three pump stations that were advertised at the same time since they lacked prior experience specifically in pump station construction.
The PPC concluded that:
Whether the Evaluation Committee has a discretion in determining what is a “project of similar nature” is dependent on the terms of the evaluation criteria. So, while there may be precedent for the exercise of such professional judgment and or discretion, an Evaluation Committee should not assume such discretion onto itself but ensure that it is acting within the terms of the evaluation criteria for the specific tender being evaluated. Similarly, the procuring entity in setting the evaluation criteria should ensure that the criteria is [sic] expressed in simple, clear and unambiguous terms.
We note that the Commission has made 13 recommendations as a form of remedial action. However, there was no mention of any recommendations as regards sanctions being imposed on the members of the Evaluation Committee for their failure to adhere to the requirements of the bidding documents relating to bidders’ experience. And what of the NPTAB which is responsible for exercising jurisdiction over tenders the value of which exceeds such an amount prescribed by regulations, appointing a pool of evaluators for such period as it may determine, and maintaining efficient record keeping and quality assurances systems? Surely NPTAB is not a “post office”, accepting evaluation reports without examining them to ensure that all the laid down requirements have been followed, and the determination as to the lowest evaluated bid can stand the test of independent scrutiny. This is especially so, considering that NPTAB is required to prepare a streamlined tender evaluation report for Cabinet to enable it to issue its “no objection” to the proposed award.
And what of the procuring entity, NDIA? By Section 39 (3), if the procuring entity does not agree with the Evaluation Committee’s determination as to the lowest evaluated bid, it is required to issue an advisory recommendation to the Evaluation Committee regarding which bidder should be the lowest evaluated bidder, which recommendation the Evaluation Committee must observe.
Should Cabinet also not be held liable? Section 54 (2) requires Cabinet to object to the award of the procurement contract if it determines that the procuring entity failed to comply with applicable procurement procedures. That apart, Section 51 (1) requires Cabinet and the PPC ‘to review annually the Cabinet’s threshold for review of procurements, with the objective of increasing that threshold over time so as to promote the goal of progressively phasing out Cabinet involvement and decentralising the procurement process’. After almost eight years since the Commission became operationalised, there is no evidence of any action taken to implement this requirement.
To be continued –
