Gov’t, GPL face court challenge to $4.6B contract to Chinese group
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15th Feb 2017
Source: Stabroek News
-rejected bidder says contractor unfairly selected
The government and the Guyana Power and Light Inc (GPL) are being asked to defend their decision to award a $4.6B contract to a Chinese group for the rehabilitation of the power company’s low and medium voltage distribution network, which one of the bidders says was “improperly” done.
Acting Chief Justice Yonette Cummings-Edwards has ordered the government and GPL to show why the High Court should not hear the application by rejected bidders Fix-It Depot, which is contending that the contract was awarded to China National Machinery Import and Export/China Sinogy Electric Engineer-ing Co. Ltd “in flagrant breach” of the Procure-ment Act and the bid invitation as it did not meet the tender evaluation criteria.
In a supporting affidavit for a Notice of Motion filed by his attorney Devindra Kissoon, Paul James, of Fix-It Depot, also contends that his company’s bid, which was the lowest, was unfairly rejected and that GPL set out a vague criteria for the award of the contract and even then did not apply it.
As a result of James’ application, Justice Cummings-Edwards has ordered that the Ministry of Public Infrastructure, Senior Minister David Patterson, Permanent Secretary Balraj Balram, GPL, and the National Procurement and Tender Administration Board (NPTAB) and their representatives show why an order should not be issued for the court to review the decision and quash the rejection of the Fix-It-Depot’s bid as well as the award of the contract to the Chinese group.
The case comes up for hearing again tomorrow in Chambers.
The rehabilitation of 328 km of GPL’s low and medium voltage network, including the procurement and installation of smart meters throughout the network, is part of the Power Utility Upgrade Pro-gramme, which is intended to enhance the company’s operational efficiency. It is being funded through an Inter-American Develop-ment Bank (IDB) loan.
The engineer’s estimate for the project was $3.8B, while Fix-It-Depot’s bid was $3.5B. According to James, based on the criteria in the Procurement Act and in the IDB Procurement Policy, not only did his firm, in a joint venture with Colombian civil engineer Enrique Lourido Caicedo, submit the lowest evaluated tender but it had also submitted the lowest evaluated cost.
“The decision to award the contract to [the Chinese group] in no way benefits the public since the tendered sum is G$1,093,737,993 higher than the Applicant’s tender, that amount resulting in a waste of tax payers’ funds, being approximately 25% higher than the Engineer’s estimate…,” he says in his supporting affidavit, filed on January 31, 2017.
In the document, he explains that the invitation for bids (IFB) stipulated that in order to qualify for the award, bidders, among other things, would have to have experience as a prime contractor in the construction of at least the number of works of “a nature and complexity” equivalent to the planned works and that these should be at least 70% completed.
Further, he says that the Bid Data Sheet also stipulated a minimum qualifying criteria for bidders, including experience as a main contractor, with works at least 70% completed in a five-year period.
James notes that the Chinese group had submitted financials from the same subcontractor that he listed in his company’s tender, Ramoutar and Sons.
He contended too that Caribbean Engineering and Management Consultants Inc (CEMCO) issued a report to GPL on November, 2014, in which it criticised the Chinese group’s past performance and it specifically cited it for installing “non-conforming, non-compliant and defective equipment,” including corroding workstations throughout Guyana. He also cited the report’s conclusion on the selection of the Chinese group for the previous project, where CEMCO stated, “The firm selected for this substantial contract is not a construction company being mainly a trading company for the export of Chinese engineering products; it appears that pre-qualification or post-qualification assessments [were] either not done or adequately performed during the tendering or selection phase of the project. The Contractor engaged other Chinese firms to perform all aspects of the contracts save for purchasing of goods for the contract and even this aspect was not adequately performed, evidenced by shortage of materials and factory defects.”
He also cites another report to GPL, done by Powerline Wireless Communications and dated December 9, 2016, where it was found that effectiveness of the configuration and operation of the equipment installed by the Chinese group on seven GPL substations was not more than 49% for all.
As a result, James says it was clear that the Chinese group did not satisfy the evaluation criteria set out in the bid invitation, “it not having the experience to satisfy the bid requirements.” As a result, he argued that the decision to award the contract was “irrational, unlawful and a manifest error.”
According to James, GPL said Fix-It-Depot was disqualified as a bidder because it “did not satisfy evaluation criteria for experience in similar works of the nature and complexity to be undertaken” but no explanation was given as to how that decision was reached.
He says too that GPL also advised that the terms of the loan contract mandated that the IDB procurement policy be used, thereby “ousting” the terms and regulatory oversight of the Procurement Act.
Additionally, he says that an explanation for the rejection of his tender, given by the IDB’s Office of Institutional Integrity also ended up highlighting the flawed decision making process and the lack of specific evaluation criteria.
James maintains that the award violated the terms of the Procurement Act and argues that even if the IDB procurement policy prevails, GPL failed to follow its evaluation process and properly apply the evaluation criteria. He adds that he has been advised that the bid invitation failed to sufficiently disclose the contract award criteria and weightings in advance, which was a breach of both the IDB policy and the GPL’s duty “to fairness, equality and transparency,” thereby making the entire tender award process “flawed and illegal.”
James adds that based on information contained in the CEMCO report, had GPL followed the evaluation process and equally and fairly applied the evaluation criteria, it would not have awarded the contract to the Chinese group, which did not meet the minimum requirements for bidders.
As a result, James has asked the court to prohibit the respondents from concluding, entering into, or bringing into force, any contract with the Chinese group, to order that they reissue the bid invitation with clear criteria or to reconsider his bid on the basis that the award to the Chinese group was unlawful. He noted that up to January 18, 2017, no money had been advanced to the group and no contract was yet in force.
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London House Chambers represented the Government of Guyana in a US$750 million
Attorney Devindra Kiss
Source: Newsroom Prominent Attorney Devindra Kissoon was on Wednesday elected, u