Region Eight RDC cannot justify using highest bidder to build $9.866M incinerator

Nov 05, 2018 News

– Auditor General says other contractor built larger incinerator for $7.866M

Officials attached to the Regional Democratic Council (RDC) of Region Eight have been found in a blatant breach of the nation’s procurement laws.
Expounding on this matter in his latest report, Sharma said that the contract for the construction of an incinerator at Mahdia District Hospital was awarded in the sum of $9.866M to the highest of seven bidders. When asked for an explanation for this abnormality, the RDC officials could not provide any to the Auditor General.

Auditor General, Deodat Sharma

Sharma then highlighted that the difference between the highest and lowest bidder was $3.811M.
“As such, it is unclear why the RDC awarded the works to a bidder with the significantly higher bid price without any justifications.”
Sharma also noted that for a previous contract in Region Eight, a contractor was able to build a larger incinerator and associated housing at a cost of $7.866M. This also fueled Sharma’s worry as to why the RDC went with the highest bidder.
Additionally, Sharma said that a detailed examination of the priced Bills of Quantity by the contractor revealed that the rate for two specific items in the Bills, namely the incinerator door and ash traft, are significantly higher when compared to the larger incinerator constructed for a previous project. He said that the total cost of the incinerator door and ash traft under the current contract was $4.5M which represents approximately forty-six percent of the total contract sum, while the larger incinerator door and ash traft under a previous project costs a total of $489,460.
Also troubling for the Auditor General was the fact that no document pertaining to contract bore an Engineer’s Estimate. In addition to this, the defects liability period was not stated in the contract. Sharma said that the works comprised the construction of a clay brick furnace equipped with ash traft, three metal doors, chimney and blowpipes. The furnace is constructed within a well ventilated HCB and grill work structure with roof. As at 31 December 2017, Sharma said that amounts totaling $9.677M were paid to the contractor. However, a physical verification of the works revealed overpayments totaling $210,000.
The only response the RDC gave to the Auditor General’s findings was that the amount overpaid will be recovered.
Sharma nonetheless recommended that the Regional Administration makes every effort to recover the overpayment; ensure that the award of contracts to the highest bidder is justified and that proper documentation of the tendering process is available for audit examination; and proper systems are in place to ensure all works completed are properly inspected and measured before full payments are prepared and made to contractors.