Gross negligence… Contractor paid $3.2M after bond expired on health centre construction

May 01, 2018 News

Region Ten officials before the Public Accounts Committee yesterday.

…project still incomplete, not budgeted for 2018

Officials have unearthed a major financial discrepancy where Regional executives paid $3.2M to a contractor to construct a concrete health centre and living quarters at Wiruni, Berbice River, after his bond had expired.
The contractor has since been terminated, but the project is incomplete, and it is not part of the Region’s 2018 budget.
This information surfaced when senior officers of the Region Ten Democratic Council (RDC), appeared before the Public Accounts Committee (PAC) yesterday.
While reviewing the 2016 Auditor General’s report on the Region, it was revealed that JPM General Contracting Services was contracted to undertake the project at a total cost of $14.3M.
Regional engineer, Clive Peters, told the committee that the building should have been completed by December 2016; however, the contractor received a three-month extension to complete the works.
He said that he did not approve the extension. The Acting Regional Executive Officer at the time, Maylene Stephen, claimed to have written to the contractor to offer the three-month extension without a written approval from the Region’s Public Works Department.
Stephen concluded that since she wrote the letter, she must have received permission to offer the contract extension.
Government Member of Parliament, Jermaine Figueira, insisted that the PAC must be told who authorized the extension of the contract.
Chairman of the PAC, Irfaan Ali, continued to probe into the development, offering Regional officials time to gather the information. The Regional officials busied themselves, utilizing phones to get the requested details.
Following one of the breaks, Peters revealed that the contractor received $5.9M in 2016 then $3.27M in July 2017.
Upon further questioning from Ali, Peters stated that the construction bond, which is usually utilized when contractors default, expired on June 11, 2017, a month before the contractor received a final payment.
“You sat down with a contractor with an expired bond. The contract is not valid once the bond has expired,” Ali noted.
Peters stated that once he discovered the bond would have expired in June, he informed the Acting REO.
“You have exposed the entire government as a result of not enforcing the bond; ensuring that you have a bond that is valid. Do you understand the consequences of that action, Engineer?” Ali asked.
The engineer answered in the affirmative.
Stephen stated that since there was no bond, the Region terminated the contract.
“That is further exposure of the Government,” Ali stated.
The final payment was made although the three-month extension for the contract ended in March. The contract was official terminated in November, 2017. According to Peters, about 70% of the work has been completed.
“So you proceeded to pay the contractor after the bond would have expired. We have just established that the Region proceeded to pay the contractor after the bond was expired. I don’t know how we deal with this, but this makes the issue very complicated for us,” Ali stated.
It was revealed that the contractor remained on the job beyond the contract extension.
“Mr. Chair, as with the bond, it was an oversight,” Peters explained.
This drew a strong rebuke from the Ali.
“An oversight that the contractor remained on the job after the contract would have come to an end. The first thing you have to do is get approval for the extension of the contract. Something does not seem right with this one,” Ali stated.
He then adjourned the meeting, telling the Regional officials that they will have to reappear before the Committee.
Other Regional officials who appeared before the PAC included current REO, Orlin Gordon, and embattled former REO, Gavin Clarke.

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