Clerk of Works, contractor implicated in construction fraud

Nov 01, 2016 News

– cause Education Ministry to pay more for inferior items

Fingers have been pointed to the Clerk of Works and a contractor in a matter that saw the Ministry of Education making payments for items that were of lesser value than was outlined in the Bill of Quantities of a construction project.
The Clerk of Works has been implicated in light of the fact that the inferior items were reportedly identified even before payments were made.
This development has been highlighted among the discrepancies detailed in a review of the works completed on the $204 million Zeeburg Secondary School in East Bank Essequibo.
It was in fact the Audit Office of Guyana that made the disquieting revelation in its Report of the fiscal year ended 2015 where it has called on the Ministry to ensure that all contractors adhere to the specification as stipulated in the Bill of Quantities.
According to the Audit Report, in 2014 the National Procurement and Tender Administration Board granted approval for the award of contract in the sum of $204.837M for the construction of the Zeeburg Secondary School.
The contract was awarded to the lowest of four bidders. According to the contract, all works were expected to be completed by October 24, 2015.
But according to the Audit Report, the Education Ministry was granted approval by the Finance Secretary on December 31, 2015 to enter into multi-year contracts. However, the auditors observed that there was no evidence that the contractor was granted an extension to complete the works in 2015.
During the course of the audit it was found that in 2014, amounts totalling $89.437M were paid and in 2015, amounts totalling $74.350M were paid to the contractor, bringing total payments on the contract to $163.787M.
Although physical verification carried out in September 2016 revealed that works were practically completed, a number of discrepancies were also observed.
Among them was the fact that the contractor supplied and installed pine doors to the school and laboratory buildings instead of hardwood (kabukalli) doors, as specified in the contract.
Further, it was found that the Ministry accepted the pine doors (softwood) doors and paid the same rate as that of the hardwood doors, although the contractor had supplied doors of lesser value and lesser quality.
Added to this, the contract specified that pre-painted roof sheeting be installed to the school buildings. However, the contractor supplied and installed unpainted roof sheeting to both the laboratory and school buildings. In another surprising twist, the Ministry again accepted the unpainted roof sheeting and the contractor was paid the full price as pre-painted roof sheeting.
But this wasn’t the end to the observed discrepancies.
According to the Audit Report, even the doors installed to the stalls of the sanitary block were found to be smaller in size and made of plywood instead of hardwood, as was specified in the contract. However, payments were again made for hardwood doors by the Ministry.
When faced with the discrepancies, the Ministry informed the Audit Office that “the Head of Budget Agency indicated that the Ministry will be writing the contractor along with the Clerk of Works on this project with the view of having all corrective works done.”
But the Ministry currently has an advantage, since according to the Audit Office, “at this point of time the Ministry still has unpaid sums owing to the contractor and as such, if the contractor fails to undertake the correction, the value of the corrected works will be deducted from the sum owing.” A sum of $41.050 million is currently owed to the contractor.

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