Bahamas
An audit of Bahamas Power and Light (BPL) revealed at least one purchase order (PO) to the tune of nearly a quarter of a million dollars was not signed off on by the CEO or chairman, and another $1.3 million purchase order that had the chairman’s signature, but did not reflect board approval.
FTI Consulting was contracted to conduct an audit following the controversial termination of members of the Bahamas Power and Light (BPL) board in 2018 — under the Minnis administration.
The report is expected to be tabled in Parliament this week.
“In this instance of the two POs requiring board approval, FTI also did not find clear evidence from board meeting minutes that these POs were discussed or approved,” read the report commissioned by former Prime Minister Dr Hubert Minnis.
“Despite the absence of approval evidence in these cases, it is possible that approvals were obtained.
“For example, the required approvals may have been given by email.
“In any event, this absence of evidence raises concerns about record-keeping practice.”
FTI also found that in seven of the 55 purchase orders reviewed, documentation such as an executive summary or proof of competitive bidding was missing or at least not provided to FTI for the purchase orders that had no clear competitive bidding exemptions.
It said if such documentation does not exist, the cases may represent “more serious policy deviations”.
FTI reported that while the missing documents did not necessarily indicate that policy violations occurred, the absence of the documentation prevented FTI from making such an assessment.
Among the vendors with missing executive summaries or evidence of competitive bidding was Sancon Contracting Ltd with a $230,860 purchase order; Rocky Mountain Institute for $33,500; Caribbean Pavement Solutions for $19,600; Proguard Ltd for just over $48,000 and ABC Trucking Services Ltd for nearly $19,000.
Additionally, investigators noted that BPL’s internal audit department notified FTI that it was unable to locate service or sales contracts for the “vast majority of the POs in FTI’s sample,” read the report.
FTI said the presence or absence of a contract separate from the purchase order itself was not a focus of FTI’s review due to the fact that, in many cases, the PO’s act as contracts, and no separate vendor agreements are used.
The firm said this was explained by BPL CEO Whitney Heastie, who pointed out that separate contracts were not required when POs go through the approval process and the purchase is not subject to tender.
BPL’s internal audit report dated April 20, 2019, found, among other things, that BPL had paid Sancon over $400,000 during a one-year period with “no contract in place and no evidence of tendering”.
“BPL’s internal audit department recommended that the company enter into a contract with Sancon,” read the report.
“In response, Rollins, BPL’s executive director, noted that Sancon’s engagement had been ‘approved by the board’ in November 2017 and that services [from Sancon] were facilitated via several purchase orders.
“This response seems to suggest that POs were used in lieu of a contract with Sancon and that such use was appropriate for the services purchased.
“The circumstances in which a vendor contract is called for in addition to a properly authorized PO may be more of a legal question than a business one.
“Accordingly, the existence of contracts to support POs was not a focus of FTI’s sample testing.”
FTI’s testing showed that Sancon was issued a post office box on January 3, 2019, for technical services for Abaco generation, transmission, and distribution in the amount of $230,860.
It said notwithstanding any lack of contract, the support documentation provided to FTI showed no indication of tendering or an executive summary, and the purchase order was signed only by Ferguson.
It said for two of the 50 purchase orders, the supporting documentation was partially corrupted and unreadable and FTI was unable to determine if the requisition for them was properly approved.
Outside of those two POs, FTI also identified 16 cases where requisition approvals did not appear to adhere to BPL’s accepted procedures.
Three requisitions were reportedly missing and at least one approval; and in 13 instances, the same individuals appear to have approved a requisition at more than on authority level — the same initials appeared for both the department and division heads approval.
The investigators said while this could be by extenuating factors such as emergency purchasing needs, “if records documenting such factors exist, they were not provided to FTI”.
In all three instances where this issue occurred, the resulting PO received all necessary approvals, according to the FTI.
It said: “Due to the lack of written policy at BPL addressing requisition approval exceptions and overrides, FTI cannot affirmatively conclude that policy deviation occurred in these instances.”
According to the procurement policy, executive summaries must be signed by the sponsoring director, CFO, COO, and CEO.
The executive summaries associated with several POs in the same did not appear to reflect all required approval signatures.
In 14 executive summaries alone for purchases of $100,000 or more, three were missing at least one of the four necessary signatures.
This included an executive summary for $108,125; $150,000 and $1.31 million, the latter of which contained the signatures of the chairman, CEO, CFO, and division head, but was missing the signature of the COO.
more
image: pexels-karolina-grabowska
Read more
Bahamas
Bahamas Power & Light’s (BPL) chief executive dealt with “a significant issue” by warning staff they faced termination if goods and services were purchased outside established protocols.
Whitney Heastie told consultants that addressing the ingrained habits of long-serving BPL workers was one of his first moves upon taking the post in October 2017 after the state-owned utility’s management services agreement with PowerSecure was terminated.
The FTI Consulting report, which has been seen by Tribune Business, disclosed: “Heastie said that this was a significant issue when he became chief executive in October 2017. At that time, he recalled, there were certain long-tenured employees at BPL who believed it was within their purview to independently commit to purchasing goods and services.
There is no realistic way to completely prevent this behaviour, although without an approved purchase order any resulting invoices would in theory be rejected by BPL’s accounts payable department.”
Both Mr Heastie and Joy Darling, supervisor of BPL’s grid solutions unit, said the utility had “made efforts to discourage such behaviour and to encourage compliance with procurement protocols.
For example, Heastie said he had recently sent a company-wide e-mail reminding employees that such behaviour is prohibited, and may result in termination,” the FTI Consulting report said.
The report and its contents have come under attack for being incomplete and one-sided, with the existing BPL Board and management, as well as the former Board faction headed by ex-chair Darnell Osborne, either complaining they were never interviewed or not given a chance to review and respond to the findings before the final version went to the Prime Minister’s Office.
Tribune Business understands that Desmond Bannister, former deputy prime minister and minister of works, who had responsibility for BPL under the Minnis administration, did not see the report and was unaware of its contents until disclosure by the media. It is also unclear if Dr Hubert Minnis, the former prime minister, reviewed it as no action seems to have been taken by his office.
Meanwhile, BPL’s outgoing Board and existing management are understood to feel they and their reputations have become ‘collateral damage’ in an effort by the newly-elected Davis administration to dig up “dirt” on its predecessor. And, until the full report is published, they are unable to properly defend themselves since they have not seen the findings themselves.
FTI Consulting, in conclusions dating from when it completed its work in 2019-2020, asserted: “BPL lacks a coherent approach for the management and control of its written policies in relation to procurement and tendering.
“In general, FTI found a significant degree of disorganisation and confusion over which written policies have been approved by the Board, which have been superseded, which are in use, and who is or was responsible for managing them.”
The report acknowledged that Shervonne Johnson, who joined BPL in June 2019 as director of risk and compliance, had been given responsibility to clean this up but “disagreement over the protocols for policy approval” was holding this up.
And FTI Consulting also described BPL’s procurement policies as “lacking in several important areas”, including exceptions and overrides to existing policies. “This could diminish employee accountability and have negative effects on the overall culture of compliance,” it warned.
“Although BPL has an approved tender policy, the policy lacks significant detail in a number of key areas, including tendering procedures, the appointment of tender evaluation committee member and committee composition, conflict disclosures and bid evaluation.”
more
image: freepik
Read more
Guyana
The National Procurement and Tender Administration Board (NPTAB) yesterday distanced itself from a decision to retender a contract, as claimed by the Ministry of Agriculture, and its Board will meet next week to discuss the issue.
An NPTAB official said that the Board will want to clarify its role, including that it “does not decide on re-tendering,” as if a contract should be advertised again it lies solely with the procuring entity, which “recommends and justifies” such decisions. “NPTAB merely facilitates the decision of the procuring entity,” the official said.
Chairman of the NPTAB Tarachand Balgobin yesterday told Stabroek News that he is currently on leave and won’t be back at work until next week. He said that the Board is scheduled to meet next Tuesday, when the issue will also be discussed.
He noted that he is not au fait with the matter, which involves the recent retender for the supply of steel sheets for the National Drainage and Irrigation Authority (NDIA).
Following the retender, which received 12 bids, the Ministry of Agriculture issued a press release on Monday in response to a Kaieteur News report that highlighted the retendering.
The Ministry and the NDIA, which announced the withdrawal of the release last night, sought to deny any role in the decision to retender as it claimed that the decision would have to have been made by the NPTAB. “…by virtue of the Procurement Act 2003, public procurement of goods and services up to a certain limit is done exclusively by the NPTAB, a body that is independent, separate and apart from both the Ministry of Agriculture and the NDIA. The NPTAB has its own employees and the BIDS received through the tendering process are assessed by evaluators drawn from across the public sector by the NPTAB. Indeed, no evaluators are drawn from the sector whose BID is being evaluated. In summary, therefore, the Ministry of Agriculture nor the NDIA plays any role whatsoever in the tendering of contracts,” the release stated.
“The tendering of bids, acceptance of bids and subsequent award of bids are done through the [NPTAB] once it is above a prescribed limit. All these projects named in the articles are above that prescribed limit and therefore falls under the ambit and control of the NPTAB and not the Ministry or the NDIA,” it added.
The release further said that if an aggrieved bidder wishes to know the ground for the rejection of the bid, they can contact the NPTAB for such information.
The Ministry quoted Section 40 of the Procurement Act as it sought to explain that it was merely following instructions. “Section 40 of the Procurement Act 2003 states that “(1) Subject to approval by the National Board, if so specified in the solicitation documents, the appropriate board may reject all tenders at any time prior to the acceptance of a tender. The appropriate board shall upon request, communicate to any supplier or contractor that submitted a tender the grounds for its rejection of all tenders, but is not required to justify those grounds. 2) The appropriate board shall incur no liability, solely by virtue of its invoking subsection (1), towards suppliers or contractors that have submitted tenders. (3) Notice of the rejection of all tenders shall be given promptly to all suppliers or contractors that submitted tenders.”
“Therefore, based on the above, the Ministry of Agriculture nor the NDIA cannot request retendering or rejection of bids. It is only the National Procurement and Tender Administration Board (NPTAB) that can do so. The NDIA only provides the engineers estimate which is published along with the tenders for bids. Therefore, it cannot be said that the NDIA (the budget agency) has been turning down competitive bids as is being claimed in the September 19th, 2021 [Kaieteur News] article,” the release added.
more
image: pexels-tima-miroshnichenko
Read more
British Virgin Islands
For one day only, the Recovery and Development Agency will host a procurement workshop aimed at improving contractors and supplier’s capacity to effectively respond to general bidding opportunities as well as for projects financed by the Government of the Virgin Islands, and the Caribbean Development Bank.
Acting Chief Executive Officer of the Recovery and Development Agency Anthony McMaster shared that the workshop will provide contractors with the opportunity to understand how best to develop their tender submissions and the key areas for consideration.
The CEO stated, “We have collected 12+ months of data on projects, the tender processes, the evaluation process, the types of bids submitted, and we think its appropriate for us to show and share this information with contractors so they can see where success lies and what has been the challenges in the submissions.”
The CEO hopes that contractors will walk away with the knowledge needed to apply this information during the next round of tender submissions for recovery projects to be administered by the RDA.
Gilbert Fontenard, Managing Director of FDL Consultant Inc. is the special guest presenter at the workshop. Mr. Fontenard serves as the Road Rehabilitation Consultant with the Caribbean Development Bank (CDB) Rehabilitation and Reconstruction Loan (RRL) who holds oversight for the eight road rehabilitation projects being executed by the RDA.
Other topics for discussion include, ‘CDB Tender Process’, ‘Evaluating VfM for Projects’, ‘Common errors in tendering’, and ‘Tips for the Preparation of Tenders’
The RDA has administered $28Millon dollars’ worth of recovery projects which span eight slope stabilization and road rehabilitation projects, four reservoirs, three government buildings, the Halls of Justice, West End Ferry Terminal and two schools in addition to earlier recovery projects funded directly by the Government of the Virgin Islands.
The workshop will be held on Thursday, 30 September from 9:00 a.m. until 1:00 pm. at the Moorings Conference Room.
The RDA is a statutory body under the Premier’s Office is responsible for delivering recovery projects outlined by the Government of the Virgin Islands in the Recovery to Development Plan.
more
image: pexels-thirdman
Read more
Belize
Prime Minister John Briceno has responded to the Belize Chamber of Commerce and Industry (BCCI) on the issue of SMART’s contract on the Microsoft 365 contract. Briceno told the BCCI that their claim for a fair and level playing field would mean giving all suppliers an unbiased opportunity to bid and to be selected fairly. The letter further states, quote, “(1) According to the Chamber, BTL should be allowed to match the prices that are in the market, but you give no recognition to the fact that it is free competition within the market that sets the fair market value of the service. What you propose in our view constitutes a monopoly for BTL with regard to any telecommunications service to be offered to the government. However, the regulatory framework in Belize under the Telecommunications Act does not contemplate or support the operation of such a monopoly. (2) Please be advised that we did not use a “selective tendering process” in relation to the contract for the Microsoft software licenses. Pursuant to the Finance and Audit (Reform) Act (the “Act”), the Government is empowered to enter into procurement of contracts using either the limited tendering procedure, the open tendering procedure or the selective tendering procedure.
In this case the limited tendering process was used.” End of quote. The 2-page letter goes on to state that the tendering process was done transparently and that there was no preference shown in the process. It continued saying, quote, “We categorically reject your assertion that we are “diverting” business from the BTL to SMART. CITO went to great lengths to ensure the process used was transparent and fair to all parties invited to tender. There was a bid committee, the requirements were put to all those invited to bid at a meeting attended by all of them, the bids were password protected, and the bids were opened live by the committee in the presence of all bidders. BTL was even allowed to submit an updated bid. In the end, the party with the lowest bid was successful in accordance with the terms of the procurement. As a government we are bound contractually to accept the outcome of the process. It is not open to us to change the rules of the process because some do not like the outcome.” End of quote. The response from the Prime Minister has to do with the contract awarded to SMART which is a company whose shareholders include relatives of PM Briceno.
more
Image: pexels-nothing-ahead
Read more
