BPL chairwoman Darnell Osborne said yesterday officials are in the process of “tightening” and “centralising” how contracts are awarded at the power company.
Her statement came on the heels of Ernst & Young’s (EY) audit into Bahamas Power and Light (BPL) which exposed instances where procurement decisions were allegedly influenced and processes circumvented under the previous administration,
Speaking to The Tribune yesterday, Ms Osborne said adhering to international best practices is also the aim of the improved procurement measures.
Her comments come two days after The Tribune published contents from EY’s audit into BEC now known as BPL, which accused former Executive Chairman Leslie Miller of allegedly “influencing” procurement decisions and sometimes “circumventing” the process altogether. Mr Miller has denied these allegations.
“We had put in place some stop gap measures where the bid process will now be changed,” said Ms Osborne.
“We have more individuals who must be present at the opening of the bids. We also have implemented more of a centralised procurement process and not each and every department and everyone accepting these bids and what not.
“We expect that the procurement process will be tightened and international best practices observed.”
She added: “In the meantime, we have just centralised the process. We have required that the CEO’s administrative assistant accepts and records the bids and there are more individuals who must be present.
“We are also moving towards having an email for tenders and this email being reviewed by whomever the CEO or COO has appointed. That would help to eliminate the biases that would exist where people are able to take out and look at bids and that sort of thing. So there are a number of things that are being done just to tighten it and improve the procurement process.”
Government’s promise of small contractors accessing at least 20 percent of all state contracts may be one step closer to fulfillment as the Ministry of Business prepares to roll out a pilot of the project next month.
“Next year is the year for the small business programme,” Minister of Business, Dominic Gaskin told Stabroek News recently. The Ministry of Business, through its Small Business Bureau, is charged with formulating a plan that would see this government initiative implemented.
“We are doing it and I am a lot more satisfied now than a year ago, because then we were still waiting for it to be put into action and now that is being done,” Gaskin stated.
Sarkis Izmirlian is claiming Baha Mar’s main contractor would have cost him $169 million in “grossly over-valued bids” had he not intervened in its procurement process.
Baha Mar’s original developer, in his $2.25 billion damages claim against China Construction America (CCA) and its affiliates, alleged that the Chinese state-owned contractor “misused” and failed to properly control the $4.2 billion development’s tendering system. Mr Izmirlian, and his family’s BML Properties vehicle, are instead claiming that CCA used the project’s Tender Event Schedule (TES) to “improperly” advance its interests by submitting bids on Baha Mar work ‘packages’ that were “far higher” than the project’s budget and market rates.
“In light of CCA’s failures, Baha Mar was forced to seek its own savings in procurement,” Mr Izmirlian alleged. “Baha Mar had to intervene on certain packages as CCA’s initial recommendations or bids were grossly over-valued or proved to be uncompetitive.
“If Baha Mar had not acted to protect its interests and those of BML Properties, CCA would have placed orders for works approximately $169 million over the amount it should have paid.”
CCA, as Baha Mar’s main contractor, was responsible for breaking the multi-billion dollar project down into work ‘packages’ that would then be awarded to sub-contractors.
This meant CCA was responsible for determining the scope of each ‘work package’, pricing it, putting it out to tender, and then hiring the best bidder. Mr Izmirlian, though, alleged that the Chinese state-owned contractor sought to retain most of the work for itself so as to maximise profits.
“CCA exhibited at all relevant times a lack of willingness to provide non-self perform procurement strategies or bid processes for the project,” Mr Izmirlian and BML Properties alleged.
“Baha Mar was forced to insist that CCA prepare, and continue to provide, a traditional procurement process in line with any self-perform/commercial offer to ensure market value was proven.
“For example, in the case of the Building Envelope, Baha Mar had to perform a bid process of the windows and sliding doors work package to safeguard the project schedule, which resulted in a saving of approximately $2 million against the similar scope within CCA’s self-perform offer.”
Mr Izmirlian alleged that CCA only reduced its bids when confronted by Baha Mar on its price, or threatened that the developer might perform the work itself.
“Evidencing the failures of the bidding system, and as a result of CCA’s plan or inadvertence, CCA continuously submitted bids that were far higher than the budgets and the market,” the original Baha Mar developer alleged.
THE absence of a transparent public procurement system has increased the Bahamas’ cost of doing business, the Chamber of Commerce’s chairman said yesterday, at the launch of the Government’s e-tendering system.
The system, which will also feature a supplier registry, is targeted to come online in February 2018 in a bid to enhance ‘value for money’ for taxpayers, improve tendering competitiveness and openness, and create an equitable playing field for all bidders. Mike Maura, speaking at the launch, said government procurement – the bidding and awarding of public sector contracts – has been the subject of persistent mismanagement complaints for decades.
“The absence of a transparent procurement system increases the cost of doing business and the cost of building in the Bahamas. The consequences associated with poor procurement include higher taxes, higher public debt, widespread inefficiency and a higher total cost for all of us,” said the Chamber chairman.
K Peter Turnquest, the Deputy Prime Minister, said enactment of the Public Procurement Bill 2018 was scheduled for early in the New Year. It is designed to strengthen the regulatory and enforcement framework around government procurement.
Through the bill, a Public Procurement Department and a Public Procurement Board will be established.
A Public Review Tribunal will also be established “to give recourse to persons who believe there have been an injustice rendered to them during the tendering process”.
Mr Turnquest said the new system will offer transparency. “There will be complete visibility,” he added. “All qualifying Bahamian businesses will be able to register to do business consistent with qualifications.
“Moreover, all persons visiting the portal will be able to view business opportunities, know all the offers available, monitor the process, see who is awarded contracts and at what price, and the justification behind the award.”
Mr Turnquest added: “There is tracking of every decision along the procurement chain. All bid forms are item stamped, which prevents interference following the close of bids, and every action taken by government personnel within the system is tracked.”
The National Insurance Property Development Company Limited (Nipdec) has been ordered to disclose documents related to the tendering process for a contract to supply 35 buses to the Public Transport Service Corporation (PTSC) in 2013.
Delivering a 17-page judgment in the Port-of-Spain High Court last week, Justice Eleanor Donaldson-Honeywell ruled that Nipdec could not prove it was exempt from disclosing the documents to Wescan Trinidad Agency, one of the companies that was unsuccessful in the tendering process.
In 2012, Nipdec was engaged by PTSC to procure 100 CNG-powered and GPS-capable buses in three phases over five years.
