NPTAB should take blame for juice bid fiasco – Goolsarran

The National Procurement and Tender Administration Board (NPTAB) should be blamed for the flawed awarding of a juice contract for public schools to a Suriname company ahead of Demerara Distillers Limited (DDL), according to former Auditor General, Anand Goolsarran.

He also says that the law should be amended to allow companies that protest contract awards and win their cases to be adequately compensated and not just given a reimbursement for the preparation of their protest documents.

“This is indeed regrettable and points to the inadequacy of the law in providing relief to contractors and suppliers if they are unfairly treated,” Goolsarran told Stabroek News in an interview.

He made reference to the recent ruling by the Bid Protest Committee (BPC) that the evaluating committee in the contract for the supply of Juice for the Ministry of Education’s National School Feeding Programme did not stick to the criteria stipulated in the tender documents. DDL won its protest of the award as a result.

The BPC annulled the part of the procurement process dealing with the evaluation of tenders which implies that the process would have to be done over. It also awarded the cost of the preparation of the bid to DDL. However, there has yet been no word from the BPC or the Public Procurement Commission (PPC) on the way forward for the contract in light of the BPC ruling.

“The Act states that in the event the Bid Protest Committee considers that there is merit in a bid protest, it shall decide whether the procuring entity should retender for the procurement or provide compensation to the rejected bidder. Damages may include only compensation to recover the cost of the bid preparation,” Goolsarran noted, lamenting that it was a regrettable aspect of the law.

He believes that in the case of DDL, “Compensation should include loss of profits, not to mention the investment the company might have undertaken to construct the facility used for manufacturing the juice, the possible laying off of workers, and the termination of the agreements with farmers who provided the fruits for the manufacture of the juice.”

Goolsarran believes that there is little DDL can do now as it pertains to compensation but its legal team can consider the possibility of appealing to the High Court, to provide further relief.

Stabroek News reached out to several private companies for their views on the aspect of the law that speaks to the powers of the BPC and all were reluctant to have their companies and organisations named in the article. Some cited fear of victimisation on future bids, some offered no comment and one informed that because of a recent protest they were accused of taking the issue to the press and “politicising the matter.”

Nonetheless, those who spoke on condition of anonymity, criticised not only the award in DDL’s protest but the law itself.

“That thing will just turn contractors off from protesting because tell me nah, that making sense? After going through all the headache of …. so much money paying a lawyer and the time and energy lost, you will award the cost of the preparation of the documents for the protest? Who in their right mind would take that option?” a CEO of a popular city contracting firm asked.

“Oh my! When my attorney explained that thing to me I said it would be best I cut my losses, because I have two cases I had wanted to protest. The system set up in such a way that it seems that the contractor always end up holding the (bad) end of the stick,” another stated.

The former Auditor General says that the NPTAB should be more careful in its review of the tender process before sending the contracts to Cabinet for a noobjection.

“It is also regrettable that the violation of the law as it relates to the juice contract escaped the attention of the Permanent Secretary (of the Ministry of Education), the National Procurement and Tender Administration Board (which prepared the streamlined tender evaluation report for consideration by the Cabinet), the Minister of Finance (who submitted the report with the related recommendation to the Cabinet) and even the Cabinet. The law is clear that the Cabinet can only object to the award of a contract if the procuring entity failed to comply with the applicable procurement procedures,” Goolsarran asserted. .

“The fact that the Cabinet offered its “no objection” to the award of the contract would suggest that it was satisfied that the Ministry of Education had complied with all the procedures. In this regard, the Cabinet must have relied on detailed scrutiny carried out by the NPTAB in its offer of “no objection”, which is not an unreasonable position to take. Therefore, if one were to attribute blame, it has to be at the doorsteps of the NPTAB,” he added.

Stressing the fact that the Evaluation Committee could only use the criteria set out in the solicitation documents, Goolsarran said that the imposition of any new criterion or criteria is a breach of the Procurement Act.

He questioned the logic behind the Ministry of Education using the selective tendering method for the juice contract and still inviting DDL to bid knowing it had a difficulty with DDL’s past performance. “In fact, one of the qualification criteria for consideration for the award of a contract is that a supplier’s (or contractor’s) past performance substantiated by documentary evidence would commend it for serious consideration for the award of the contract. The fact that DDL was invited to bid for the contract would suggest that the Ministry was satisfied with DDL’s past performance,” he reasoned.

Further, he added, “There are procedures to be followed when contractors and suppliers are blacklisted, and due process must be followed before a decision is taken.

There is no evidence to suggest that DDL was blacklisted, and therefore the decision of the Evaluation Committee to deem DDL’s bid unresponsive as a result of past performance was discriminatory and violates the principle outlined in the constitutional amendment of 2001. That amendment provides, among others, for the procurement of goods and services, and the execution of works to be conducted in a fair, equitable, transparent, competitive and cost-effective manner according to law and such policy guidelines as may be determined by the National Assembly”.

And while the NPTAB should bear the brunt of the blame, Goolsarran says that the Ministry of Education (MoE) should face sanctions for the failure on its part to respond to DDL’s initial request for a review of the contract. It is because of this failure that DDL sought the BPC’s intermediation.

The MoE also went ahead and signed the contract with Surinamese company Rudisa to supply the juices without explanation, when the Act provides for the procuring entity to suspend the final contract award, pending the outcome of the bid protest, unless the procuring entity certifies that the procurement should proceed in the interest of the procuring entity.

“When DDL wrote to the Ministry of Education in relation to the decision to award the contract, the Ministry failed to respond, hence the bid protest. Sanctions should therefore be imposed on the responsible officials for the failure to do so, as the matter could have been resolved before reaching the Bid Protest Committee, thereby incurring unnecessary costs.

“In the case of DDL, compensation should include loss of profits, not to mention the investment the company might have undertaken to construct the facility used for manufacturing the juice, the possible laying off of workers, and the termination of the agreements with farmers who provided the fruits to manufacture the juice”, he argued.

Four months after it protested the $545M contract award for the supply of juice to government’s school feeding programme that went to Rudisa’s subsidiary, Caribbean International Distributors Inc, the BPC ruled in favour of DDL.

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

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 spoilage. 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.