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Contractor General takes Strong Stance on Procurement Practices

Contractor General Omar Mitchell is taking a strong stance on procurement practices. Love News received an internal memo from the Office of the Contractor General which explains the rules to awarding of contracts and procurement practices. Hipolito Novelo reports.

On page three of this memo, under “Confidentiality” it reads that all correspondence, memos, and emails from the OCG are confidential”. Ironically memo number one of 2021 from the Office of the Contractor General was leaked exclusively to Love News. The subject of the memo is procurement practices- it’s not a new subject but rather one that has been brought up many times in recent years by parliamentarians.

ark Lizarraga, Former Senator for Private Sector: “If the processes employed are less than transparent and if we know that party political hacks, partisan individuals continue to get these major contracts then we have to question.” 

And they did. Questions after questions, complaints after complaints were voiced to the previous government but nothing much was done. It was senators who rejected the reappointment of Godwin Arzu as Contractor General after he failed to produce yearly reports.

Arzu was succeeded by Omar Mitchell who in February 2020 was appointed to the post for three years. Mitchell is bring down the hammer on the Financial Secretary, Cabinet Secretary, Accountant General, Auditor General, CEO’s, accounting officers, HOD’s, and even the Finance Minister, John Briceno.

Mitchell’s memo is direct and strongly worded. It reminds the recipients that the law requires open tendering for contracts valued more than fifty thousand dollars. In fact, the memo reveals that in 2021 alone there have been numerous submissions to his office where the use of limited tendering were used for contracts valued more than fifty thousand dollars. Mitchell says the reasons but those reasons are debatable. These include “emergencies that have been emergencies for several months, if not a year, limited time which in reality is the result of poor planning or internal organization, dubious claims of lack of appropriate suppliers or qualified person.”

Mitchell then lays down this rule- “effectively immediately, whether it is public funds or donor funds, submissions must be made to the office of Contractor General for pre-approval for the use of limited or selective tendering for amounts upwards of fifty thousand dollars three working days in advance.” If this rule is not followed, Mitchell will not issue a certificate.

Then there is the issue of the selection of supplier. Under the previous UDP government we heard the same names receiving several multimillion dollar contracts.

Mark Lizarraga, Former Senator for Private Sector: “How it is that only one contractor seems to be favored or very few contractors seem to be favored for all of these major major works that we’re seeing done, major infrastructural works that we see throughout the country and only the few preferred contractors get these jobs and in a process that is not too transparent if I may say.” 

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Tender bypass

Procurement rule exemption for CHEC for MoBay Perimeter Road

There will be no tender process for the multibillion-dollar Montego Bay Perimeter Road project that has been designated a national development project by the Government and which is to be funded by Jamaican taxpayers.

For the current fiscal year, the Government has allocated $1.2 billion in the Budget to commence works on the project.

Finance and the Public Service Minister Dr Nigel Clarke opened debate on Wednesday on the Public Procurement (National Development Project) (Montego Bay Perimeter Road Project) Order, 2021 and a resolution by a similar name, which is intended to give effect to the first such project of its kind locally.

Clarke told his parliamentary colleagues that the order represented the first one being made in relation to the Public Procurement Act.

The order declares that the Public Procurement Act shall not apply to the Montego Bay Perimeter Road Project. The move is being made in accordance with powers granted to the finance minister under the Public Procurement Act.

It was initially proposed that a loan be obtained from the China Ex-Im Bank to execute the works and that funding would be linked to China Harbour Engineering Company carrying out the contract.

Clarke said that at a point, the finance ministry indicated that Jamaica did not need to borrow from China to carry out the major project.

The finance minister said that based on the fact that China Harbour had carried out the feasibility analysis and all the preliminary works, “the proper thing to do in terms of ensuring that we abide by good principles is that we go ahead with the other part of that plan, which is the execution by China Harbour”.

Cabinet made the decision to declare the Montego Bay Perimeter Road a national development project on March 17 this year.

Commenting on the problem of traffic congestion in the Second City, Clarke said that the economic capital of Jamaica was constrained by the inability to move. He said that people had challenges commuting to and from work and that the loss of productivity was an economic cost and burden to the society.

The order set out certain matters for which the finance minister may declare, subject to affirmative resolution, that the Public Procurement Act, or any provision of the act, shall not apply. “This paragraph indicates that the minister has the authority to make such an order subject to terms and conditions which he may specify,” Clarke said.

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Duke’s wife paid $16 million from WASA over eight years

A March 8, 2021 summary of payments by the Water and Sewerage Authority (WASA) has confirmed that the company owned by the wife of Public Services Association (PSA) President Watson Duke—has been paid a total of $16,389,436.01 between 2012 and 2020.

A copy of the reported payments obtained by Guardian Media showed that Blackstone Engineering Technologies Ltd (BETL) which is owned by Kimberly De Silva-Duke, would have been paid by both the People’s Partnership (PP) and People’s National Movement (PNM) governments.

Information contained in the three-page document shows the total value of contracts awarded to BETL was listed at $16,984,326.18 – which means that De Silva-Duke is still owed $594,890.17 by WASA for completed works.

Of the $16.3 million paid thus far, BETL would have collected $11.4 million under the PP regime, while the PNM would have paid out $4.9 million.

A breakdown showed BETL collected the largest payment of $6,524,188.86 from the PP between October 2012 to May 2014.

And between June 2014 to December 2014, BETL received $3,279,391.92. During the period January 2015 to September 2015, BETL was paid $1,667,593.11.

Under the PNM government, BETL collected payments totalling $4,918,272.12.

Three months after the PNM assumed office under Prime Minister Dr Keith Rowley, BETL was paid $281,393.50 between October 2015 to December 2015.

And from January 2016 to December 2020, the firm netted $4,636,878.62 in payments.

BETL has received no payouts for this year so far.

The document quoted from a review of the Oracle Financial System for the period June 2014 to February 2021, which outlined contracts awarded to BETL under the following three WASA Tender Committees (WTCs).

WTCs 05/2010 and 101/2013 for the provisions of mains repairs, installation of stop corks, curb valves and metres on an as and when required basis for a two year period;

WTC 30/2014 for provision for ground maintenance services at various facilities throughout Trinidad for a three year period.

The document stated, “The contract for the provision of main repairs, installation of stop corks, curb valves and meters was awarded to a pool of bonded contractors, : fixed rates for the provision of various services on an as and when required basis.”

It further stated that the last works awarded to BETL were for the provision of ground maintenance for a six month period from May 2017 to October 2017.

The total VAT-inclusive value of payments made to BETL over the period June 2014 to February 2021, was $9,865,247.15. It is as follows:

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Belize Business Bureau calls for a Commission of Inquiry on Questionable Contracts

The Belize Business Bureau is calling for a commission of inquiry into a contract that may have been facilitated with insider information and influence.  The Bureau’s President Arturo Lizarraga has written the Contractor General Omar Mitchel expressing concerns with a specific tender process and bid selection. In the letter, Lizarraga tells Mitchel that the Bureau has (quote) been made aware that the Belize Electricity Limited (BEL) was assigned the procurement responsibility for the purchase of weather stations for the Belize Meteorological Office (BMO) back in 2020 under the ERCAP project via the tender process. (unquote) According to the letter, the Belize Business Bureau did some investigation and found out that the original weather station and pricing was obtained from Campbell Scientific and that they became the benchmark for the tender assessment. The Bureau also found out that this same company, Campbell Scientific was allowed to bid and subsequently selected even though they were not the lowest of the 4 bids. Reporter Hipolito Novelo has the story.

On its website the National Meteorological Service says that in an effort to standardize the sensors and equipment used in automatic weather station network it uses equipment from Campbell Scientific, an international brand with offices in dozens of countries. It began operations in Central America in 2009 and its specialty is hydrology, meteorology and agriculture.

The company is still active and tonight the Belize Business Bureau is calling for a commission of inquiry into a contract the company received in 2020. This is a copy of a letter dated March third sent by the Bureau’s president Arturo Lizarraga to the Contractor General Omar Mitchel who is informed of a contract between BEL and Campbell Scientific. It has an estimated value of $1.8 million and is for the procurement of weather stations for the met office. Concerns are being expressed regarding the tendering process and the bid selection and that’s because the Bureau’s investigation revealed that the original weather station and pricing was obtained from Campbell Scientific which then became a benchmark for the tender assessment. The investigation also revealed that Campbell scientific not only submitted a bid but also won the contract even though the company’s bid was not the lowest of the four submitted. In fact, a local company’s bid was lower and the Bureau says that the local supplier’s bid was soundly rejected for no substantive reason. Allowing, Campbell Scientific created an unfair playing field and it begs the question was this contract may have been facilitated with insider information and influence? We asked Mitchel this and he told Love News, that is a fear and refused to comment further. However, Mitchell did assured our Newsroom that he is on “top of things” and will not approve anything until his mind is clear, that it’s transparent and that the interests of the people of Belize are being served at all times. He says that he will not endorse any contract documentation unless he is certain that the interests of the people of this country are being served.

Lizarraga also wrote to BEL CEO, Andrew Marshalleck, telling him that having an unfair or rigged bidding procurement process does not bode well for any enterprise. Lizarraga is asking for BEL to investigate the matter to ensure that it was done right with a procurement process that is transparent and not a fixed bid, where the local business cannot win.

Mitchel has written to the Financial Secretary, procurement officer in the Ministry of Finance, the CEO of BEL, Belize Meteorological Office, asking for clarification on four areas. The Office of the Prime Minister has been made aware of the matter.

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Bidders not being told of outcome of major drug tenders