Ministry single-sourced 112 Mahindra tractors on market research
Guyana
The Auditor-General’s report for 2020 says that the Ministry of Amerindian Affairs single-sourced 112 Mahindra tractors and trailers on the grounds that market research had revealed that it was the most economical of its type.
This disclosure will raise eyebrows and concerns that the ministry has flouted procurement laws. Single-sourcing is permitted in limited circumstances and usually not on the basis of market research. The Auditor General’s report which was tabled in the National Assembly on Monday was however silent on the method of procurement.
Its report said that Cabinet granted its `No-objection’ on 30 December 2020 for the award of a contract in the sum of $446.880M for the supply and delivery of 112 tractors and trailers for Amerindian Villages and Communities.
“The award was made using the single source method of procurement on the basis that market research revealed that Mahindra Tractors are the most economical tractors on the market with the four-wheel drive and 75 horse power needed for development in the Amerindian Communities/Villages”, the report said.
The Ministry of Amerindian Affairs had tendered for tractors and trailers last year and bids were opened at the National Procurement and Tender Administration Board on October 20. It is unclear if this process was proceeded with or it was set aside for the single-sourcing.
On October 20, the ministry had received seven bids ranging between $231m and $339m for the supply of an unspecified number of tractors and trailers
The Auditor General’s report said that the contract was signed between the Ministry and a local supplier on 31 December 2020. The report did not name the supplier. The signing came the day after the Cabinet no-objection.
The Auditor General’s report said that the contract stated that an advance payment of fifty percent of the contract sum was to be paid upon signing of the contract whilst, the final payment of fifty percent of the contract sum was to be paid upon submission of a payment bond.
“Six transactions amounting to the contract sum of $446.880M were processed on 30 and 31 December 2020; while, the cheques were drawn on 4 January 2021. Three payments amounting to $223.440M, which represented fifty percent of the contract sum were paid on 13 January 2021. The other three payments amounting to $223.440M representing the final payment on the contract, were paid on 5 March 2021”, the report said.
An Advance Payment Guarantee dated 30 December 2020 was provided in the sum of $223.440M, with a validity period from 30 December 2020 to 30 April 2021 – the duration of the contract. The report said that the supplier then wrote the Ministry in April 2021 requesting an extension of time to supply 112 tractors and trailers.
The report said that the basis of the extension sought was stated as disruptions “…due to several unexpected closures at the Mahindra Production Plant in India. As such, the production was delayed for a few weeks”. The report sad that the Ministry granted the extension in time up to 15 August 2021 and the Advance Guarantee was also amended, resulting in a new validity date of 20 August 2021.
The report said that as of 9 September 2021, 103 tractors and trailers were recorded as having been received by the Ministry. Of these, fifty-four tractors and trailers were still at the Amerindian Dorms, Liliendaal whilst the other forty-nine tractors and trailers were issued to various Amerindian Villages. As a result, the report said that the intended benefits from the use of the tractors and trailers were being delayed.
The Head of Budget Agency stated that the late delivery of the tractors and trailers was no fault of Ministry, and that the delay was not material in nature or would compromise the intended purpose.
Further only twenty handing over forms were submitted for audit. As a result, the report said that the Office of the Auditor General could not determine the locations of the twenty-nine tractors and trailers, and whether they were handed over to the Villages as reported.
The ministry’s response was that the handing over documents were established and were now available.
In addition, only thirty certificates of registration were submitted for audit. As a result, the Office of the Auditor General said that it could not determine whether the nineteen tractors and trailers reportedly handed over to Villages were registered with the Guyana Revenue Authority (GRA). Moreover, ownership of these nineteen tractors and trailers could not be verified.
The ministry in response stated that all the tractors and trailers were delivered to the ministry; however, certificates of registration for 11 tractors and 39 trailers were still at GRA, at the time of reporting.
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