DDL wins juice contract protest

-evaluation committee criticised

Demerara Distillers Limited (DDL) has won its protest of the award of the contract for the supply of juice for the Ministry of Education’s school feeding programme after the Bid Protest Committee (BPC) ruled that the evaluating committee did not stick to the criteria stipulated in the tender documents.

The BPC therefore annulled the part of the procurement process dealing with the evaluation of tenders which implies that the process would have to be done over. DDL was also awarded the cost of the preparation of its bid. It had also asked for the BPC to order the ministry to evaluate or re-evaluate the company’s bid based on the criteria specified in the tender documents but the BPC made no reference to this in its decision.

Rudisa subsidiary, Caribbean International Distributors Inc (CIDI), presently holds the $545.2M contract for the supply of juice for the feeding programme.

“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 12th, 2016 ruling, which was seen by Stabroek News.

Through public relations consultant Alex Graham, DDL said that it could not immediately state what its next move will be but the company is reviewing the decision. When contacted, Public Procurement Commission (PPC) Chairperson Carol Corbin explained that she had this week received a copy of the BPC’s decision but could not comment on it as she was still finding out if all the parties involved were notified of the decision. She, however, promised a comment on the matter on Friday.

The Ministry of Education was not aware of the judgment when this newspaper visited its office yesterday afternoon as Chief Education Officer Marcel Hutson relayed a message from the procuring entity’s Permanent Secretary Delma Nedd. “She said that it is with the Bid Protest Committee and a decision has not yet been made,” Hutson informed after exiting Nedd’s office where he went to make the query for Stabroek News. Told that a decision was made, he replied, “Well I can only go with what the lady told me.”

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 24th last year when the National Procurement and Tender Administration Board (NPTAB) opened tenders at its Main and Urquhart streets office:

DDL produces Topco juices and Guyana Beverages Inc. is the distributor for the Fruta Kool Kidz juices.

DDL had written to the government after the company lost the bid to supply juices to nursery schools, the first time since the former People’s Progressive Party/Civic government replaced milk with juices back in 2010, 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.”

‘Past Performance’

The BPC ruling stated that the bids were evaluated against administrative criteria by an Evaluation Committee comprising of Nedd and Chief Electrical Inspector of the Ministry of Public Infrastructure Roland Barclay. Also on the committee was the Ministry of Public Telecommunications’ Assistant Secretary General Jolene BrownGriffith.

According to the BPC, all bidders satisfied the administrative criteria, however, DDL was deemed non-responsive because the Procuring Entity had said that it experienced numerous problems with it in the past pertaining to expiry dates and spoilages.

“As a result of being considered non-responsive the Complainant’s bid was not further evaluated,” the BPC decision noted.

Through its Chairman, Komal Samaroo, Topco wrote to the ministry seeking a review of the decision to render its bid unsuccessful and requested that its bid be evaluated or re-evaluated in accordance with the criteria set out in the Bid Documents but the ministry “failed to respond,” prompting the move to the BPC.

The BPC added that by letter, the ministry then responded to the complainant’s reasons for review, “stating that the law makes provision for them to evaluate the Complainant on the criterion of past performance. The ministry also stated that “despite knowing of the past performance of the Complainant, because the method of procurement was restricted tendering, it felt compelled to invite the Complainant to bid.”

On the 29th, November, 2016, the BPC held a hearing into the matter. At the hearing, DDL was represented by Allison Thorne, its Company Secretary, who maintained her company’s reasons for review, relying on, among other things, sections 5 (3) of the Procurement Act.

Section 5 (3) states“Any requirement mentioned in this section shall

be set forth in the prequalification documents, if any, or in the solicitation documents and shall apply equally to all suppliers or contractors. A procuring entity shall impose no criterion, requirement or procedure with respect to the qualifications of suppliers or contractors other than those set forth in this section or the regulations. The BPC said subsection (3) places two burdens on the Procuring Entity. “The first duty is that while the Procuring Entity can choose any criterion to evaluate bidders, whatever criterion is chosen it must be set out in the documents that are given to bidders and must apply equally to all bidders. The second duty is that the Procuring Entity must not include any criterion, requirement or procedure that is not provided for under section 5 or the regulations. This means that while the Procuring Entity is given discretion to choose any criterion to assess bidders, the criterion must be disclosed in the tender documents. It must be a criterion that is provided for in section 5 of the Procurement Act and the Regulations made under the Act and the criterion must apply equally to ALL bidders,” it noted.

As a result, in its decision, the BPC found that the ministry could use past performance as a criterion for the contract without it being expressly stated in the tender documents. “The [ministry] had a duty to disclose how all bidders would be assessed in the tender documents so as to ensure that all bidders could be evaluated in a transparent and objective manner,” it said.

It was noted that the ministry’s representative had admitted that only DDL’s past performance was considered by the Evaluation Committee and that the reason past performance was not applied to other bidders was because they had no previous relationship with the ministry. “This argument is unacceptable because not only must the criterion be disclosed but it must be applied equally to all bidders; if it cannot be applied equally then it should not be used,” it added.

‘Hands tied’

During its deliberations and evidence gathering, the BPC also said that it asked the ministry why, if it knew that DDL had bad past performance and was dissatisfied with it, would it continue using the company’s service and not terminate the contract. DDL had also informed that there was a termination clause in their agreement with the MOE but this was never used.

The Ministry of Education’s justification was that its “hands were tied” and it “could not terminate the contract and that from the beginning of the national distribution programme the Procuring Entity was in a single-source arrangement with DDL and felt compelled to maintain the status quo.” That argument was not accepted by the BPC, which said that the ministry was not bound to remain in a contractual relationship with DDL since its 2012 contract catered for termination. Added to that, it said that if past performance was as important as the ministry stated, it should have been listed in the bid documents.

“However, the Evaluation Committee not only took into consideration the clearly outlined extensive criteria but sought in their determination to consider what was revealed to them by the Procuring Entity. In essence they embarked on an unlawful procedure taking into consideration numerous problems that the Procuring Entity stated that they had encountered since 2012 with the Complainant. This resulted in the Complainant being adjudged non-responsive despite responding positively to the bid documents and being the lowest bidder,” the BPC ruling stated.

Although the ministry also tried to argue that the crux of the matter was the “preservation of the wellbeing and best interest of the child,” the committee said it found it hard to reconcile the argument that this was “always etched in the Ministry’s mind” in light of complaints that had been received from several schools over the years.

The BPC cited a complaint, dated October 24th, 2012, of expired juice; a complaint dated September 5th, 2013, about shortages in the juice and an unpleasant taste; a complaint dated January 10th, 2014, of cartons of juice that were rat bitten and roach infested; and a complaint dated June 24th, 2014, of swollen cartons of juices that were smelly and contained worms.

“A Ministry that had the welfare of the children in their contemplation should have at minimum ensured that the criteria for the assessment of bidders were tailored in such a manner so as to ensure that there was not a repeat of the experience complained of. Past performance would have been the ideal criterion to assess all tenderers in this project that had children as the main focus,” it added.