Contractors walked away with $$M for incomplete works in Region One - Auditor General’s Report

Contractors walked away with $$M for incomplete works in Region One – Auditor General’s Report

Nov 23, 2012 News

Rehabilitation of the Regional Administration Office, Mabaruma, Region One remains incomplete, but the contractor was overpaid $5.013M. However, this is not the only instance during 2011 that the Region overpaid for works done on buildings.
According to the Auditor General’s Report 2011, some $5.270M was expended on the rehabilitation of the Regional Administration Office. The contract was awarded in the sum of $11.864M. A physical verification of the works revealed that the project was incomplete and overpayments totaling $1.079M were made to the contractor by the Regional Administration, headed by Regional Executive Officer Mary Williams at that time.
However, taking into consideration liquidated damages amounting to $1.186M, value of the works completed totaling $1.336M, and incomplete works valuing $1.079M, the total overpayment amounts to $5.013M.
According to the report, a physical verification of the project revealed that the contractor had no personnel or equipment on the site. Only the foundation and ground floor columns of the building were completed at the time of the verification and the works appeared to have been abandoned for a long time.
The report also stated that the contractual completion date for the works expired since October 6, 2011, and no approval for extension of time was seen.
“The maximum allowable limit of liquidated damages under the contract is 10% of the contract price. Based on the contractual completion date of 06 October 2011, the maximum liquidated damages, totaling $1.186M would have accrued since 14 January 2012; in spite of this, no action has been taken against the contractor to date,” the report noted.
According to the Head of Budget Agency, the Regional Administration wrote to the contractor to recover the amount overpaid, however, the registered mail was returned, and it would appear that the Contractor was no longer in business. As such, the Region will be pursuing legal action to recover the amount overpaid.
The Audit Office recommended that the Regional Administration take urgent action to recover the overpayment and submit evidence to the Audit Office for scrutiny.
The report also revealed that the sum of $5.430M was expended on the construction of a students’ dormitory at Port Kaituma. The contract was awarded in the sum of $18.101M. A physical verification of the works proved that the project was incomplete and the value of the measured works at the time of inspection, on 26 May 2012, was only $633,300.
As a result, the contractor was overpaid the sum of $4.797M. In addition, the contractor had no personnel or equipment on site. Only the foundation trenching for the building was excavated at the time of the verification and the works appeared to have been abandoned.
It was noted that the contract start date was 17 June 2011, with duration of five months. Approximately one year after the signing of the contract, the works are incomplete.
Responding to the Auditor General’s report, Head of Budget Agency merely indicated that the Regional Administration terminated the contract and the contractor was written to in order to recover the amount overpaid.
Again, the Audit Office recommended that the Regional Administration take urgent action to recover the overpayment and submit evidence to the Audit Office for scrutiny and adhere strictly to the terms and conditions of the Procurement Act of 2004.

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Contractors walked away with $$M for incomplete works in Region One – Auditor General’s Report

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