Govt. mulls Procurement Act amendments

Aug 13, 2013 News

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–    Aims to restrict “overwhelmed” contractors

By Keeran Danny

Government is considering amendments to the Procurement Act to restrict contractors from bidding for more projects than they can handle, in light of large civil works projects experiencing significant delays and an uncompetitive construction industry.
Cabinet Secretary Dr. Roger Luncheon made this disclosure during a recent interview with Kaieteur News.
“There is obviously the need to restrict contractors who are way behind time, and contractors who are not performing satisfactorily, from being eligible for bidding on additional projects.”

He pointed out that the law does not restrict a bidder from tendering for projects, even if that bidder is engaged in other projects.
“The law says if you meet the requirement of the bid and are the most responsive you get the work…The law has not contemplated you the contractor having so much work that you should not have bid. You have to change the law. These new dynamics in the procurement of civil works we could indeed amend in the law have got to be well considered provisions that say if you have “X” amount of jobs and you are not 50 percent through on all of them, you can’t submit new bids.”
Luncheon said Government needs to be mindful of this move, “so as not to throw out the baby with the bath water”.
“You don’t want in your movement forward, to have a totally negative impact on the industry.”
Speaking on the East Bank and East Coast Demerara Public Road expansion projects, Luncheon gave some brief insights as to why they are significantly delayed.
In relation to expansion works on the East Bank of Demerara, from Providence to Diamond, Luncheon said “man proposes and God disposes”.
The contracts for the Three Lots between Dipcon Engineering Services Ltd, GEICO Construction Company in association with General Earth Movers, BK International and Government were signed on October 3, 2011, with an 18-month period of completion. Delays to the project – particularly Lot Three, from Diamond ‘high bridge’ to Diamond Housing Scheme entrance which was stalled for several months – were blamed on poor weather conditions and existing utilities.
A Partnership for National Unity (APNU) Parliamentarian, Joseph Harmon, had expressed concern that the contractor, BK International, responsible for Lot Three, is “somewhat overwhelmed” with projects.
However, BK International in a press statement had distanced itself from the delay in East Bank Demerara road project and blamed the presence of utilities and other problematic elements.
Meanwhile, Dipcon Engineering Services Ltd., responsible for carrying out works from Providence to Prospect, is also executing works in more than one lot on the East Coast Demerara road-widening project.
According to Dr. Luncheon, development of the East Bank Demerara thoroughfare is now expected to conclude in February 2014. The delay proved inconvenient for visitors and locals traversing the East Bank Demerara Public Road when Guyana recently hosted Caribbean Premier League Twenty20 cricket fixtures.
“Had those infrastructure works been completed, we would have had a less negative impact, because many visitors had to deal with that traffic and the traffic congestion, and that is why even before cricket returned to Guyana, work was being done there. Unfortunately, man proposes and man disposes,” Dr. Luncheon said.
Similarly, on the East Coast Demerara Public Road, the intention was to incrementally move the expansion project from Better Hope east to the Railway Embankment.
“Providing a more user-friendly thoroughfare has also been obstructed by…I don’t know if I should blame God this time… We have a few carpenters and contractors, who could indeed be blamed for the delayed in the completion of those works.”
Contracts for the first two lots were inked in September 2011. Falcon Transportation and Construction Services was responsible for Lot One, from Better Hope to Montrose. The company’s contract was terminated based on poor performance – a claim the contractor denies. It was later given to Dipcon Engineering Services, who is yet to conclude expansion works for Lot Two from Montrose to Golden Grove.
According to Dr. Luncheon, Prime Minister Samuel Hinds has reflected on the fact that some contractors are being awarded too many contracts.
“I would agree that on the basis of the uneven…it is uneven, you see… if you had an industrial environment where you give “X” amount over a period. But what has happened public expenditure, particularly investments, has grown significantly. If you go back to 1992 and look at the way expenditure of the PSIP (Public Sector Investment Programme) has grown, and go and look in the registry to see how investments by contractors have grown, you would see where the disparity keeps growing more and more. In other words, the volume of contracting businesses, that is, contractors and those who support contractors, clerks of work and quantity surveyors, the economy is just not churning them out fast enough,” he said.
Luncheon said this is sad, but what Guyana is trying to achieve now should have been done long before. He emphasized that the rest of the English-speaking Caribbean passed over these hurdles between the 1960s and 1990s.
“We are on the road to try to overcome what we have been visited with through those last years. We have to dig up; if they move 10 miles we have to move at 40 miles per hour, he said.
He opined that if there were restrictions, more companies would be encouraged to join the sector thus leading to a competitive industry. However, he is pessimistic about the reaction from “experts” who would want to object to the restrictions, even though in the advocacy stage they would have agreed.

 

 

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