Coalition Govt. overpaid $8M for fence

Jan 23, 2021 News

Kaieteur News – It has been highlighted in the 2019 Auditor General’s (AG) report that the Ministry of Social Protection, under the former coalition government, overpaid a sum of $8.330 million to a contractor for works under a fence contract.
The contract for the construction of a fence at the New Opportunity Corp., Onderneeming, Essequibo Coast, was awarded in the sum of $69.536M by the National Procurement and Tender Board Administration in 2018, to the lowest responsive of twenty-eight bidders.
This is the second time that overpayment has been flagged in an AG report, the first instance was noted in the 2018 report which stated that as at 31 December 2018, the sum of $69.216M was paid to the contractor and the works have since been completed. However, based on a physical verification conducted by the Audit Office on August 11, 2019, where measurements and calculations were taken, it was found that the contractor was overpaid the $8.330 million.
A table in the report noted that the contractor was tasked with supplying and placing crusher run to the surface of the facility’s access road but physical inspections revealed that no crusher run was ever supplied. It was for that set of works under the contract that the contractor was overpaid.
The Audit Office had recommended that the Head of Budget Agency recover the overpayment and reconcile the final payment for works executed; ensure that the completed works are accurately measured and quantified before payments are made to contractors.
But up to the final reporting last year, the overpaid sum had not been collected.
In the 2019 report, in the Ministry’s response to the obtaining of the overpayments, it was said that they are currently following up on the matter. The audit office has once again recommended that the Ministry makes every effort to recover the overpayments and also put proper systems in place to avoid future recurrences.
Other findings had also revealed that the engineer had estimated the project to be $81.614M, which is over the cost. Further, it was stated that the advertising details including the date on which the contract was signed, start date, completion date and defects liability period could not be determined from the documents presented for audit examination.
However, the Ministry responded with the relevant information saying, “that in accordance to Form 3: contract Agreement and page 34: special conditions of contracts (SCC) the contract was signed: 13 August 2018, Start Date: seven days after signing of contract (20 August 2018), duration of contract: six months (19 February 2019), defects liability Period: six months (20 August 2019) and that variation order was done for Item 2.3 of the Bill of Quantities.”

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