Lack of capacity leads to overpayment, termination of High Court contracts

Nov 14, 2013 News

Even as Government continues to boast of “value for money,” Auditor General, Deodat Sharma, in the recently released 2012 audit report, said that he found it alarming that four contracts were awarded for work at the Lethem and Linden Magistrate’s Courts to the same contractor who lacked the capacity to effectively undertake such works.
According to the AG’s report, the contracts were awarded on different dates and based on the outcomes, where it was awarded works had had to be terminated on May 21, last, since it is clear that the contractor lacked the capacity to effectively undertake such works simultaneously.
In 2012, a contract in the sum of $32.5M was awarded for the completion of Phase II of the Lethem Magistrate’s Court.
The contract commenced on August 8, 2012 and was scheduled to be completed on November 30, 2012. However the completion date was revised to January, 15, 2013, as a result of additional works required under the contract.
Over the period, amounts totaling $30.1M was disbursed to the contractor, who nevertheless failed to meet the revised deadline.
After several attempts by the courts and the consultant, no contact was made with the contractor. These circumstances resulted in the termination of the contract on 21 May 2013.
Up to time of the report earlier this year the building was still to be completed.
Another contract for the Linden Magistrate’s Court was awarded in the sum of $43.5M.
This contract was signed on November 25, 2011, with commencement date of December, 22, 2011 and a planned completion date of May 25, 2012.
The completion date was subsequently revised to 31 March 2013, owing to the Linden unrests and several other matters.
The contractor however, failed to meet the extended deadline.
The contract was eventually terminated on 21 May 2013. To the time of termination the contractor was paid a whopping $42.3M.
The contract for the completion phase of the Linden Magistrate’s Court was $12.8M.
That contract was signed on July 4, 2012, with a duration of four months following the commencement date of 10 July 2012.
There was a planned completion date of November 18, 2012. As a result of variations, the contractor was given extensions in time, which revised the completion date to January 4, 2013.
Like the first contractor, this one failed again to meet the revised deadline and several attempts to contact him, by both the supervising consultants and the client, proved futile.
The contract was eventually terminated on May 21, 2013. At the time of termination, the contractor was paid amounts totaling $14.2M.
It was recommended by the audit office that the department immediately undertakes a full review of the contractor’s obligations under the contracts to ensure that these, including applicable liquidated damages, are fully satisfied, without any overpayments.
Meanwhile several discrepancies ranging from fraudulent acts to overpaying employees were also unearthed at the Supreme Court.
According to the report from 1995 to 2001, there are nine matters which are either being investigated by the police or pending before the court.
In each of the cases they were based on apparent irregularities or suspected fraudulent acts perpetrated against the state.
The estimated losses, which remain outstanding to date, stood at $14.5M.
The Supreme Court had indicated that it was pursuing these matters with the relevant authorities.
A reminder dated November 27, 2012 was sent to the Permanent Secretary of the Ministry of Home Affairs, requesting a status update as advised by the Public Accounts Committee.
“It is unclear whether this request was sent to the auditor’s general’s office.”
GPL owes …
The report unearthed also that the sum of $21.5M was expended on electricity charges for 2012. However, of the 26 meters installed at the Supreme Court, three were not functional.
Despite this, payments totaling $2.4M were made to the Guyana Power and Light Company (GPL) on these meters.
According to the Auditor General’s report, the Supreme Court tried to have the power company reimburse the money to a functional meter, or refund the money, but neither was granted. However the head of the budget agency explained that the Guyana Power and Light is currently verifying the meter to have the amount appropriately credited.

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Lack of capacity leads to overpayment, termination of High Court contracts

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