Education ministry seeks legal advice on blundered juice contract

The Ministry of Education is seeking legal advice from the Attorney-General (AG) on the controversial $545.2 million juice contract for its school feeding programme, after a part of the procurement process was annulled due to an error in the evaluation of bids, Chairperson of the Public Procurement Commission Carol Corbin said yesterday.

Rudisa subsidiary Caribbean International Distributors Inc (CIDI) won the contract to supply juice for the school feeding programme, prompting a protest by Demerara Distillers Limited (DDL) subsidiary Topco, which had bid a lower price and previously held the contract.

Although the Bid Protest Committee (BPC) found in its favour, it did not pronounce on DDL/Topco’s request for it to order the ministry to evaluate or re-evaluate the company’s bid based on the criteria specified in the tender documents. As a result, CIDI still has the contract. Corbin, when contacted by Sunday Stabroek, explained that the commission had a discussion with the Permanent Secretary (PS) of the Ministry of Education Delma Nedd two weeks ago. She said the purpose of the discussion was to find out what action the ministry had taken, given that a part of the procurement process had to be annulled.

According to Corbin, the PS informed that the Ministry of Education was seeking legal advice from the AG, given that the contract was already signed and was being executed.

The BPC ruled that the evaluating committee did not stick to the criteria stipulated in the tender documents.

In this regard, the BPC annulled the part of the procurement process dealing with the evaluation of tenders, which implied that the process would have to be done over.

“The committee has decided that the [ministry] was obligated by law to disclose in the tender documents the criteria that would be used to evaluate bidders. Additionally, the Evaluation Committee acted unlawfully when it went outside the scope of its remit by evaluating the complainant on the criterion of past performance,” the BPC said in its December 12, 2016 ruling, which was seen by this newspaper.

DDL had filed a formal protest in September of last year following the award of the contract for the supply of boxed juices for the National School Feeding Programme that went to CIDI.

Four bids were submitted on May 24 last year, when the National Procurement and Tender Administration Board (NPTAB) opened tenders. DDL’s bid was $436.8 million without VAT or $506.6 million with VAT while CIDI’s bid was $545.2 million.

Next move

A source knowledgeable about the case told Sunday Stabroek that on the surface there was nothing that the ministry can do without becoming the defendant in a lawsuit. The source pointed out that if the ministry or the government decided to cancel the contract, CIDI could sue on the basis that an agreement was already in place. According to the source, if the contract remains as is, DDL can move to the court for a judge to decide according to the law what must happen.

The source said that when looked at from all angles, the court may be the best option for addressing the situation.

DDL had written to the government after the company lost the juice contract, which was the first time it lost the contract since 2010 when the former People’s Progressive Party/Civic government replaced milk with juices under the national school feeding programme. The programme allowed for each child to receive one box of juice along with seven biscuits as a mid-morning snack.

A few days later, government issued a press statement informing that it had received a complaint but urged bidders for contracts for the provisions of goods and services to the state to use the BPC to address any concerns about the tendering process. This was because at the time the Public Procurement Commission was not yet established.

Government’s statement had said that in the case of the contract for the supply of the boxed juice, a recommendation was made by the NPTAB to have the contract awarded to the third highest bidder (Rudisa) as it had satisfied all the technical and administrative requirements. Cabinet subsequently offered its no objection to the recommendation and the contract was awarded accordingly.

It further noted that Cabinet was advised that the lowest bidder (DDL) was not recommended for the contract in view of continued issues with past performance dating back to 2012.

But DDL fired back, dismissing the claims and filed its protest on the grounds that the procuring entity failed, refused and/or neglected “to consider only such evaluation criteria as set forth in the solicitation and tender documents contrary to sections 5 (3), 39 (2) and 39 (4) (c) of the Procurement Act, Cap 73:05.”

After the BPC ruling, DDL, through public relations consultant Alex Graham, had said that it could not immediately state what its next move would be but the company was reviewing the decision.

Meanwhile, Minister of State Joseph Harmon was asked about the matter during a post-Cabinet press briefing held last Friday. “It is still now in the domain of the Public Procurement Commission… it is out of government’s hands right now,” he told reporters, while adding that that government could not jump in and just award the contact to someone else. “It is in the Public Procurement Commission’s area and they will have to take the necessary steps,” he added.

Asked about the BPC’s recommendation that DDL be compensated, which would mean that government would have to pay, Harmon said that the AG would have to give advice on this.

DDL was awarded the cost of the preparation of its bid.