APNU/AFC Cabinet approved $228M on project but contract signed for $191M

Details from the 2019 Auditor General’s report revealed that the former Coalition government had approved the sum of $228.062 million for the construction of a new annex building for the Finance Ministry.
However; the contract was signed for a figure far less… $191.674 million.
The sum of $113.711M was budgeted in 2019 for construction of the Ministry of Finance’s New Annex Building at Croal Street, Georgetown.

According to the Appropriation Account as at 31 December 2019, the full amount was expended.
That contract, according to the report, was awarded to Courtney Benn Contracting Services in 2017 by the National Procurement and Tender Administration Board (NPTAB) for $228.062 million.
No details regarding the advertisement and duration for submission of bids were presented for audit examination; the AG, Deodat Sharma, cited in his recently released report.

However, based on documents seen, it was noted that a total of 16 bids were received on July 18, 2017.
The contract was later signed on December 20, 2017 for $191.674 million, with duration of 12 months for completion and a Defects Liability Period of 12 months.
“It was observed that the contract was signed for a sum of $191.674M; however, NPTA letter of award as well as Cabinet No Objection states an awarded bid price of $228.062M. It is unclear how the contract was awarded for a price of $228.062M and the contract was signed for a lesser sum of $191.674M,” the AG said in his report.

As at December 31, 2019, the contractor received payments amounting to $182.834 million.
Courtney Benn Contraction was said to have received an advance payment of $64.557 million, representing 33.68% of the contract sum, followed by seven interim payments.
As at December 31, 2019, $38.050 million or 59% of the mobilization advance was recovered, with the remaining balance of $26.507 million outstanding, the report stated.

Moreover, the AG pointed out that physical verification by the Audit Office on October 2, 2020 revealed that the works were incomplete and only the contractor’s foreman was present on the site.
“No works were in progress at the time, despite the fact that the revised approved completion date of June 30, 2020 had long expired. Further, our assessment of the works completed at the time of our verification, revealed that the contractor already received payments for works which are incomplete and in most instances which had not even commenced,” the report said.

Further on, the AG pointed out that according to the Review of Tender Evaluation Report dated November 2017, the Evaluation Committee, which was initially set up to evaluate and recommend a contractor for award of the contract had submitted an Evaluation Report, which was not approved by all three appointed evaluators.

A minority report, he stated, was submitted by one of the evaluators instead.
The AG explained that: “The reasons for the evaluators not approving the report was not stated in the review, while it was noted that the review was carried out in November 2017, four months after the submission of bids. It is unclear if this review was carried out within the Bid Validity Period, which is normally ninety days. If this period had expired, the works should have been re-tendered.”

Added to that, it was noted in the review that bidder №.16 did not provide the necessary NIS compliance.
However, examination of the Minutes of Tender Opening attached to the review, shows that bidder №.16 did in fact submit NIS.
“It is unclear how the bidder did not have NIS compliance during the evaluation, but had it when the bids were opened,” the AG said in his report.
In response to the Bid Validity Period, the Finance Ministry explained that the date of the second evaluation the bids were still valid.

“The Tender opening for this tender according to Instruction To Bidders (ITB) 18.2 19.1, 19.2 of the Bid Data Sheet was 18 July 2017. The Review of Tender Evaluation Report is dated November 2017 and signed by the evaluators on 8 November 2017. The number of days between the 18 July 2017 and 8 November 2017 is 114 days. Therefore, at the date of the second evaluation the bids were still valid,” the Ministry said.

Further on, with regards to the Contractor not submitting his NIS compliance, the Ministry noted that the Minutes of the Tender Opening for this Tender did not record that Tender №. 16 submitted both NIS and GRA Compliances.
It explained that according to the Administrative Compliance, of the second evaluation report, labelled Review of Tender Evaluation Report dated November 2017, “The evaluation committee is in agreement with the evaluation of administrative compliance previously done which shows that Bidders №. 1, №. 7, №. 8 and 16 do not have administrative Compliance…Bidder №. 16 did not provide the necessary NIS compliance…”

“Therefore, it can be concluded that since both sets of evaluators (who during conducting their separate evaluations, would have reviewed the actual tenders/documents submitted), concluded that Tender №. 16 did not have the necessary NIS compliance, then they must be correct,” the Finance Ministry explained.
With regards to the contract price, the Ministry said it concurred with the observation made, however relayed that “it must be noted that the contract was signed for $191.674 million in accordance with ITB Clause 12.1 as stated in the Bid Document Reference. №. NPTAB 1193/2017/03.”

With all that said, the Auditor General recommended that the Head of Budget Agency; “(i) desist from certifying valuations for works which have not been completed and (ii) improve in the supervision of works and overall contract administration and (iii) ensure that Bonds and Insurances remain valid for the requisite periods.”