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APNU/AFC overpaid millions for unfinished works on CDC headquarters

APNU/AFC overpaid millions for unfinished works on CDC headquarters

The 2019 Auditor-General’s Report has revealed that $25, 529,000 was overpaid under the previous APNU/AFC Government to a contractor for the expansion of offices at the Civil Defence Commission (CDC) Headquarters.
At the end of the reporting period, the works, which were overpaid for, were still not completed. This has led to the Auditor General recommending that the Guyana Defence Force (GDF) recover the overpayment or have the contractor complete works to the value already paid for.
The report has also recommended that the GDF immediately desist from certifying valuations for works that have not yet been completed.

The contract for the completion of the expansion was granted on May 31, 2019 by the National Procurement and Tender Administration Board to the lowest evaluated bidder for $69,684,000. The report found that eight transactions totalling $65, 865,000 were processed in 2019 for payment to the contractor.
However, only sums totalling $61,458,000 were paid, leaving an unpaid sum of $4,406,000. According to the report, the sum of $1,254,000 was paid to the Guyana Revenue Authority as a withholding tax on the payments. Works were scheduled to commence on the building on June 20, 2019, with a duration of six months for completion. However, two extensions were granted, with the new completion date set for August 20, 2020.

“…the basis for the extensions were not stated. As a result, it could not be determined whether the extensions were appropriately justified,” the report highlighted. It said it could not be determined whether any liquidated damages should have been applied.
In response, the Head of the Budget Agency at GDF indicated that the completion of the project was raised in a meeting on June 12, 2020. The Head said that during the meeting, the contractor raised concerns about challenges to procure items and completion of external works due to COVID-19 restrictions. Further, the report said the contractor indicated that he cannot commit to a time until the consultant submits all drawings and approvals.

“After that meeting, a revised work programme was submitted, identifying 17 August 2020 as the date of completion for the project. A letter was sent informing the consultant that the CDC has no objection to the request, but the project should not be extended beyond 20 August 2020, followed by handover on 24th August 2020,” the Head of the Budget Agency said.
The report disclosed that a physical verification carried out on the building on September 17, 2020 revealed that the works were incomplete and the work site was inactive. Also, there were no materials or equipment on site. The $25,529,000 overpayment includes works for electrical and AC installation, plumbing and sanitary installation, carpentry and joinery, fire alarm system, metal works, plastering, and other finishes.

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