Contract variations “a growing problem for Govt.”

Oct 03, 2014 News

“We cannot condone skullduggery, we cannot fund failure, and we cannot cover up for contractors, bidders or suppliers. We want a fair, open and transparent process.” – Juan Edghill

No contractor has a God-given right to receive any contract by simply submitting the lowest bid, which invariably leads to the mounting problem of variation of contracts and the eventual escalation of the prices.

Junior Finance Minister, Juan Edghill, addressing the procurement symposium yesterday.

This is according to Junior Finance Minster, Juan Edghill, who yesterday delivered the feature address at a symposium held at the Guyana International Conference Centre and hosted by the National Procurement and Tender Administration Board.
The forum saw a number of presentations from members of the Tender Board, including its Chairman, Donald De Clou, on mistakes made during the procurement cycle; Michael De Jonge, who spoke extensively on the bidding process; John Seeram, who addressed the issue of accountability in public procurement; and Frederick Flatts, who dealt with procurement and contract management.
The forum was attended by scores of contractors, consultants and other stakeholders from across the country.
Edghill in his presentation was adamant that the administration will in no way park any project because they are waiting on a contractor. He said that in future the administration will be looking to have reports compiled on all contracts across the region so as to ensure when a contract is awarded, that contractor has the capacity to undertake the project in a timely manner.
According to Edghill, this instruction has already been passed on to the Chairman of the Tender Board.
As part of the exercise, every head of a budget agency will now be required to send to tender board a report on every contract that was and is being executed, along with its details, such as completion dates, variations and difficulties, information to be shared with all of the relevant stakeholders.
“We cannot condone skullduggery, we cannot fund failure, and we cannot cover up for contractors, bidders or suppliers. We want a fair, open and transparent process.
“Anybody who believes that they have the God-given right to a particular job that government will have to park and wait until they finish their job to come on this job, I’ve got news for you. This will not happen, and if it is happening we intend to change it.”
Edghill noted that Regional Executive Officers and Permanent Secretaries have been advised that in the award of contracts to contractors, note must be taken of their capacity at the time to undertake the project.
“Somebody might be the lowest bidder, but they already have six jobs that are lagging behind. Why would we award a seventh…because they are the lowest? This issue about you having the lowest price must also be matched with capacity and ability to deliver,” the Junior Finance Minister stressed.
He also lamented what he called threats from contractors that should they not be awarded a project they will run to the opposition or the media.
“Let me make it very clear here today. No contractor, supplier or bidder worth his salt should be bullying any official for a job. You must get a job because you are qualified and technically competent and you are capable of getting the job done,” said Edghill.
According to him, as long as there is competitive bidding, “let the chips fall where they may”.
Edghill also sought to use the forum to depoliticize the process of bidding for contracts, saying that there were no People’s Progressive Party Civic contractors nor are there A Partnership for National Unity or Alliance for Change contractors.
He said that coming out of the evaluation process, the only consideration in awarding a contract should be based on the evaluation criteria, and politics should never be a part of the consideration.
“Let’s leave the politics out of the procurement process,” said Edghill.
He called on accounting officers and evaluators to have their actions withstand public scrutiny.
Seeking to address fears that there are only certain contractors who will secure contracts, Edghill told those in attendance that over the past two years there have been a number of recommendations coming from the tender board, many of which Cabinet is unfamiliar with.
He did stress that competitive bidding will not guarantee that anybody will receive a contract for any project.
According to Edghill, the only thing competitive bidding will guarantee is that the lowest responsive bidder, and not necessarily the lowest bidder, will receive the project.
On the matter of contract variations, Edghill lamented the fact that more and more persons are submitting very low bids and secure a contract, only to submit variations at a later date that would possibly send the contract price to double that of the actual contract sum.
“Sometimes on projects the variations are climbing almost to the size of the original award…that is a challenge for government.”
He suggested that there be more pre-bid meetings among potential contractors, which he surmised could result in the reduction of variations in contracts once they have been awarded.
Edghill used the opportunity to caution contractors who would under-price their bids only to submit claims as a result of variations when they would have secured the contract.
“They are using variations to get the real price…That is something we must avoid and heads of agencies must be on the lookout for that,” Edghill cautioned.
He was adamant that there are a number of contractors who are evaluated to be responsive based on their price and “they get the job, but once on the job the variations start coming in and when you add the variation to the price and you compare it to the second or third most responsive bidder, if you had given it to the second or third responsive bidder you would have gotten the job done cheaper anyhow, because the variations sometimes carry you above the price of all the other bidders.”