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Purchase of 28,485 water meters…Audit report slams GWI’s sole sourcing to contractor
A forensic audit report on Guyana Water Inc. has raised serious questions over the entity’s procurement practices when it came to meters.
According to the audit report, which focused on the period January 2012 to May 2015 and conducted
Former GWI’s boss, Shaik Baksh
by HLB R. Seebarran & Co, in 2013 there was a contract awarded to Florida-based UTECO to the value of US$796,156 ($165M)- this was for the procurement of 28,485 water meters.
There were many problems with this contract; the findings suggest that there was irregular intervention from within GWI to tip it in favor of a particular contractor.
As a matter of fact, when it came to water meters, GWI apparently long before February 2013 when this contract was awarded, bypassed procurement regulations, choosing UTECO via sole sourcing to be the preferred suppliers.
“Sole sourcing request was made by (Aubry Roberts), the DP (Director of Procurement), for UTECO to be awarded this contract on the basis that the meters are of the required quality set out by GWI and that it is also less costly to procure them from UTECO.”
The audit report pointed out that the National Procurement Act 2003 is specific when it comes to sole sourcing, a procuring entity may engage in single-source procurement when the goods are available from a particular supplier or contractor and no reasonable alternative or substitute exists, the services, by reason of their highly complex nature, are available from only one source…”
The most recent request for approval to be granted to sole source meters from UTECO was done on April 14, 2015, a month before the May 11 general elections.
Auditors probing the 28,485 water meters from UTECO found that GWI submitted a letter to the National Procurement and Tender Administration Board (NPTAB) on December 3, 2012 requesting the approval for 10,000 water meters and boxes from UTECO at a cost of US$796,183.
Approval to supply these items was given by NPTAB on December 28, 2012. On January23, 2013, a subsequent request was submitted to the Chairman of the NPTAB to amend the approval to allow UTECO to supply 28,485 water meters only for a cost of $796,156 and also to source the water meter boxes from Jiaxing Eastron Electrical Instruments Co.
“Cabinet considered and approved this variation on the February 7, 2013. All 28,485 meters were supplied and GWI has since continued to directly procure water meters from UTECO.”
Auditors found that there was no evidence that GWI advertised this contract and therefore we could not have determined whether UTECO was the best source.
“We have received a letter of protest addressed to the Hon Mr Joseph Harmon, Minister in the Office of the Presidency signed by Mr. Darshanand Manohar and dated June 3, 2015 who states ‘…the water meter itself is sole sourced from a company, “UTECOS” for twice the price that what other meters with superior quality can be supplied at.”
GWI wrote Manohar on June 15, 2015.
According to the report, GWI’s management in response said that its plans for the period 2012-2016 included a comprehensive metering programme that had specific targets for the supply of these measuring instruments in a timely manner to facilitate the achievement of the annual targets.
However, the public tender route for supply and installation of meters in 2011-2012 had the pitfalls.
These include a single contractor which won bids to supply and install between 3000 and 4000 meters and service connection materials but lacked the capacity to procure the instruments in a timely manner and install the meters.
“New brands of meters were introduced in the various regions. They were different from the preferred quality and type adopted by the utility in 2006. Cheap connectors, poly female adaptors and stop corks entered the distribution system resulting on many leaking service connections.
Divisional contractors were repairing leaking, meters on a regular basis…”
As a result of the developments, GWI management said it sought to procure all materials for metering program and issue installation contracts to install the meters in lots of 500 meters to the contractor’s who were repairing leaks and installing new services in the divisions.
Several audit reports released by government in recent times have raised questions over the procurement practices of Government agencies and ministries.
During the period of review, GWI’s Chief Executive was Shaik Baksh.
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