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Statement on the Natural Disaster Management Rehabilitation and Reconstruction Project

(December 2013 Trough Event Project): Infrastructure Rehabilitation and Upgrade – River Training Works at Yarabaqua

Statement on the Natural Disaster Management  Rehabilitation and Reconstruction Project

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(A) PROCUREMENT PROCESS AND DECISIONS MADE THROUGH IT

The National Disaster Management (NDM) Rehabilitation and Reconstruction Project (December 2013 Trough Event) is financed by the Caribbean Development Bank (CDB). One of the important activities under this programme is the Infrastructure Rehabilitation and Upgrade – River Training of Works at Yarabaqua. The pre-bid engineering estimate for these works was EC $1,512,077. The Ministry of Transport and Works is the implementing agency tasked with the execution of the NDM programme in general including the Yarabaqua River Training works.

The Ministry of Transport and Works invited contracts to submit bids for the river training works to be carried out at the Yarabaqua River. Seven (7) bids were received on April 23, 2018, the details of which are as follows:

n OB Sadoo Engineering Services Ltd. $1,584,458.62
n Hutchinson Construction co. Ltd. $2,169,272.00
n Bailey Contractors Inc. $1,310,772.00
n Bally and Bally Investments Inc. $1,478,029
(corrected $1,468,514.60)
n Franco Construction Ltd $1,574,797.00
n Reliable Construction Services Ltd. $1,421,567.00
n Kelectric Co, Ltd. $1,325,928.45

A design and supervision consultant, IBI Group of Canada, was contracted by the Ministry of Transport and Works to provide consultancy services under the NDM programme. This group of consultants were themselves selected through the independent tendering process of the Government of St. Vincent and the Grenadines (GOSVG) with “No Objection” from the CDB; they are paid under the NDM project.

In keeping with their terms of reference, the IBI Group completed the Bid Evaluation Report of the seven (7) bids received for the Yarabaqua project. By memorandum dated August 10, 2018, the Chief Engineer submitted the Bid Evaluation Report to the Secretary of the Central Supply Tenders Board, Ministry of Finance, seeking approval to negotiate with Reliable Construction Services Ltd (RSCL) for the provision of river training works at Yarabaqua for an amount not exceeding EC $1,421,567 (VAT inclusive).

The submission from the Chief Engineer to the Tenders Board was accompanied by a letter of “No Objection” from the CDB, dated August 13, 2018, indicating that the “CDB has no objection to the Government of St. Vincent and the Grenadines awarding a contract to Reliable Construction Services Ltd. of St. Vincent and the Grenadines for the sum of XCD $1,421,567 (VAT inclusive)”.

The Tenders Board granted approach on 29th August, 2018 for the Ministry to negotiate with Reliable Construction Services Ltd. The negotiation for the works was conducted on September 05, 2018 with the NDM project staff and the principals of RCSL. On completion of the negotiations, the Ministry sought the approval of the Tenders Board on September 10 to award the contract to RCSL. The Tenders Board granted the approval for the award of the contract to RCSL on September 26, 2018 in the sum of $1,421,567 (VAT inclusive).

The decision by the Tenders Board to award the contract relied upon the Bid Evaluation Report prepared by IBI Group (the Consultant) and the letter of “no objection” issued by the CDB.

The CDB, in a letter dated April 09, 2019, informed the Director General, Finance and Planning that a mis-procurement has been declared in respect of the Yarabaqua River Defence contract between the Government of St. Vincent and the Grenadines and RCSL. The CDB further stated, that as a result of the mis-procurement, the financing for the contract has been cancelled and the sum of EC$142,156.70 which was already drawn down will have to be repaid inclusive of interest. The CDB has subsequently waived the payment of the interest on the amount drawn down. The CDB has advised that funding for all other NDM project activities remains intact.

The mis-procurement was declared by the CDB consequent upon its internal review of its “no objection” to the award of the contract; the review was triggered by a formal complaint by one of the losing bidders for the contract. The complaint focused on an allegation that RCSL did not have the track record and capacity to perform the contract as per the procurement guidelines.

It should be emphasised that a mis-procurement does not amount to corruption; indeed there is absolutely no allegation of corruption, fraud, impropriety or misbehavior in public office by any official in the Government of St. Vincent and the Grenadines or elsewhere. The CDB’s review indicates essentially that the conditionalities and rules were not scrupulously applied, thus leading to its holding of unfairness in the process of competitive bidding.

It must be underscored that the value of the current mis-procurement represents a very small percentage of the total procurements undertaken by the Government with CDB and in no way characterizes the state of the Government’s procurement system. Public procurement has always been conducted with the utmost transparency. In excess of eighty percent of Government’s procurement are conducted using the Open Competitive method. Quarterly and Annual Procurement Reports are published in the print media and on the Government’s website, showing the name of the contractor, the value and nature of the procurement and the procurement method used. Further, a modern Public Procurement Act was passed in the Parliament in December 2018.

The tendering process of the Government of St. Vincent and the Grenadines is an independent one and is not subject to any political or other undue interference. The Tenders Board carries out its obligations with due regard to professionalism, transparency, accountability, and the legal requisites of the process to the best of its ability. Both the tendering process and the work of the Tenders Board have a sound record.

The Tenders Board at the time of the award of the instant contract, and currently, consists of the following seven members: The Director General of Finance and Planning (Chairman), the Accountant General, the Permanent Secretary in the Ministry of Transport and Works, the Permanent Secretary in the Ministry of Trade and three non-public servants (Leroy Rose — a banker; Ashelle Morgan — a lawyer; and Joel Woodley — a small businessman). The non-public servants are appointed by Cabinet.

Dated the 22nd day of July, 2019.

Edmond Jackson
Director General, Finance and Planning
(Chairman of Tenders’ Board)

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