APNU+AFC procurement transgressions

Procurement rectitude was one of the areas the APNU+AFC government was expected to be light years ahead of the former PPP/C government. After all, the PPP/C’s failure to establish the Public Procurement Commission (PPC) and innumerable questions about projects such as the, road to Amaila Falls, the Marriott Hotel, the CJIA expansion and transactions with prominent businessmen formed the beachhead for repeated attacks on it by the PNCR, APNU and the AFC. Given the ferocity of the attacks on the PPP/C, much of which was merited, one would have expected that the APNU+AFC administration would have meticulously and punctiliously followed every provision and procedure pertaining to the procurement law and best practices.

This has not been the case. What is happening is either a shocking about-turn in an important commitment to good governance, a development which could irreversibly tarnish this government just halfway into its term, or leading officials have run amok and are unaware of what they have to do. At some point, President Granger has to begin leading from the front and sacking ministers and officials who are leading his administration astray.

It now transpires that the Dutch company, LievenseCSO which did the recent feasibility study for the new Demerara crossing had not been selected as part of a competitive bidding process. It defies belief that considering the scale and importance of the project that the government would recklessly embark on what was essentially the sole-sourcing of a consultant after having invited bids and receiving nearly two dozen of them.

In what was clearly a hurried response to the PPP/C’s exposure of the manner of selection of LievenseCSO, the Public Infrastructure Ministry (MPI) statement on Thursday night noted that while 22 firms expressed their interest and 12 of these firms were subsequently shortlisted, only two submitted bids for the consultancy. It said of the two submissions, only one firm had a valid bid but its bid price exceeded the US$800,000 budget. Additionally, it noted that concerns were also raised on the technical level.

The ministry said that it subsequently made the decision to annul the process in May, this year following permission from the National Procurement and Tender Administration Board (NPTAB) and the Ministry of Finance, adding that it nevertheless continued to seek suitable consultants due to the significance of the project and the need for its realisation.

It said that it actively sought greatly qualified consultants worldwide and it was during engagements with various companies, including

those in the Netherlands, the Dutch Risk Reduction team that had visited Guyana and in England, that LievenseCSO was recommended.

When the selection of the company was announced by Minister of State Harmon at a post-Cabinet press briefing in November last year, he provided no such explanation which reeks of the withholding of material information. What is further troubling about the process is that in its explanation on Thursday, MPI referred to a US$800,000 limit by the Inter-American Development Bank (IDB) as the reason for not going with one of the bidders who was over the supposed limit. This was a fiction as the IDB was not funding this study and therefore the Ministry appeared to be trying to fabricate an excuse. MPI fell further into the mire when two days later it said that it had confused the Demerara bridge feasibility with the Wismar bridge feasibility. Surely the senior officials of the ministry must be aware of the basic facts surrounding these huge projects.

When it decided that it wanted to annul the tender process, it was the responsibility of the government to notify the public and explain the reasons for it. By not doing so MPI has exhibited the traits of a ministry completely disinterested in what the people outside of Cabinet might have to say about its actions. Such behaviour is usually the harbinger of major transgressions. It is still to be established whether all of the bidders in the first process were treated according to the letter of the law.

It has since been disclosed that following the submission and apparent acceptance of the LievenseCSO feasibility study that the government has advertised for the pre-qualification of contractors to build the new Demerara crossing, which is to be followed by the shortlisting of three contractors. This two-stage process is patently unacceptable. All bidders who have been pre-qualified have a legitimate expectation of being asked to submit a bid. Whether they do so is another matter. It is not within the remit of the ministry to offer up flimsy reasons for restricting the number of eventual bidders. By initiating this two-phase process, the Ministry will open up itself to charges of unfairness and it may well embolden some bidders to present themselves outside of the procurement structure. This may explain the arrival here last week of the Netherlands-headquartered, European construction firm, Royal BAM which went as far as meeting a government minister and signalling its interest in the new Demerara bridge.

One of the factors behind the clumsy and pellmell actions of the ministry is the clear desire by the government for the bridge to be in place for the 2020 general elections, the stakes for which are now sky high because of the country’s oil prospects. APNU+AFC obviously wants this bridge as one of its major campaign planks. Whatever its motivations, this government must not be allowed to escape with actions that violate normative procurement standards in a major project which pertains to a mass transport facility and which will have lasting financial and other repercussions on the country. An injudicious decision by the government on the bridge – ie its design, type, location – must be avoided at all cost.

A poor track record has been established by this government when one considers the deeply questionable conduct on procurement for the D’Urban Park project, the Charlestown bond rented from one of its supporters and a whole series of questionable decisions in the health sector, underlined by the scandal over the purchase of $632m in supposedly ‘emergency drugs’ by the GPHC.

The portents are not good and will further deepen scepticism about the intentions of this government in procurement and all other spheres of governance.