EDITOR’s NOTE: Below is a third article by Anthony Leblanc of ACE Engineering Ltd. which is meant to clarify issues raised in two articles by the Ministry of Public Works and its Minister with regard to the tender process for Roseau River promenade project.
My earlier publications on the matter focused on attaining the next level in public procurement practice. That is, movement towards internationally accepted best practices in public procurement practices. It has been established that the Public Procurement and Contract Administration ACT #11 of 2013 was driven towards this laudable goal.
The tender process for the second round of Tenders on the Roseau River Promenade Project (RRPP), including the tender dossier submitted to contractor, the evaluation and award, all depicted undesirable practices in the procurement process.
References are made to practices in place by the World Bank (WB)[i], Caribbean Development Bank (CDB)[ii], and the European Union external action (EU) [iii].
These funding agencies have outlawed a few clauses from their procurement practices; and indeed, they are not found in our Procurement Act. In themselves, these clauses are corrupt intrusions into the transparent nature that public tenders are meant to be, and in themselves provide the opportunity for the festering of corrupt practices. These clauses purport the following:
- “The Employer does not bind itself to accept the lowest tender.”
- “The Employer is under no obligation to disclose its reasons for rejection of tender”.
- “The Employer shall not be bound to provide a reason for cancellation of the tender process.”
These clauses are indicators that the tender process may be subject to manipulations or that the technical persons preparing the documents are not at the level of expertise required for preparing tender documents.
In addition, international best practice requires that both the evaluation and awarding criteria be established in the tender documents, at the beginning of the process. The selection criteria in essence selects contractors who are capable, while the award criteria gives the basis by which a selected tenderer is awarded the contract.
The selection criteria makes provision to review information that the tenderer supplied IN THE TENDER based on criteria SPECIFIED in the instructions to evaluate:
- eligibility of tenderers based on Eligibility Requirements,
- financial and economic standing of tenderers, that is their past financial capacity and availability of cash resources to undertake the work;
- technical and professional capacities of tenderers, available equipment and their managerial staff.
Only tenderers meeting all the requirements for selection are eligible for award.
If award criteria are stipulated in the procurement notice or tender dossier, selection of the economically most advantageous tender is based using price and the other pre-established criteria. Otherwise, selection is reduced to pass or fail and price becomes the only basis of the award.
The “Practical Guide” to the European Union tendering procedure states,
“The basic principle governing the award of contracts is competitive tendering. The purpose is twofold:
- to ensure the transparency of operations and
- to obtain the desired quality of services, supplies or works at the best possible price.”
The Bidding Document for the Natural Disaster Remedial and Mitigation Infrastructure Project funded by the EU (East Coast Roads) states: “The sole award criterion will be price. The contract will be awarded to the lowest compliant tender.” Clause 24, ITT, NDMRIP 2014.
Clause 31 of the instructions to tender prepared for the 1st round of tender for the RRPP by SORELL Consulting Ltd states: “…The Employer will award the Contract to the Bidder whose bid has been determined to be substantially responsive to the bidding documents and who offered the lowest price.” .
For the 2nd round of Tender on the RRPP, the procurement practice adopted by the Technical Services Division is found very much wanting in its design to ensure competition. That is, to ensure that out of the tender process a contractor capable of executing the work to the specified quality and providing the least market price would be obtained.
The Report presented to the public purports a selection and an award criteria. In the tender documents dated March 2014, there were provisions for selecting responsive tenderers, but no award criteria was included. Hence, the default award criteria should have been utilized, that is, “The contract will be awarded to the lowest compliant tender.”
The use of the Engineers Estimate is both an archaic and a faulty basis for evaluating tenders as:
- It purports that the Engineer’s Estimate is a divine figure which is necessarily the ultimate cost of the works or services. It is only an ESTIMATE; there are no financial consequences for the Engineer if the real cost to undertake the works is above the estimate.
- It does not allow a capable and creative contractor to undertake the works to the specified quality in a more cost effective way to the benefit of the Employer /taxpayer.
- It lends itself to manipulation of the evaluation and award process, as the evaluation is not based on a prescribed point award system that scores bids against any set of criteria. As can be seen from the report, the selection of the contractor for award is purely subjective.
- It lends itself to the corruption of the tender process as the Engineer’s Estimate can be inadvertently obtained or accidentally disclosed.
The selection process did not follow the Tender document:
The tender documents dated March 2014 included under the instructions, a Clause 10: “Required Submissions”. The body of the report does not demonstrate which tenderers met all these requirements. It is worth noting that:
1. The first sentence below the heading indicated that “The Tenderer may be disqualified for failure to submit the following:” and presented 7 items, two of which were withdrawn by addenda. There are two issues here:
a)Given that Clause 11 dealt with “Recommended Submissions”, the tender document should have given clear requirements for being considered responsive. Mandatory (required) items for submission cannot simultaneously be “may be” items.
b)Given that a few of those listed under clause 10 were included in the report presented, it should be reasonable that Tenderers who did not meet these “Required Submissions” ought not to have been evaluated further.
2. The report does not indicate which tenderers presented in their tender, the four (4) items which formed the “Recommended Submissions”. In fact, the Clause 11 indicated: “Failure to submit the following will minimize the Tenderer’s chance to win the tender.” Much of the four (4) items listed under Clause 11 are normally mandatory requirements typically listed by EU, World Bank and CDB for selection or to be considered responsive.
The report has clear inconsistencies:
a)The conclusion of the report indicated that “The Tenderers produced all the necessary documents required by the Technical Services Division; this includes, tax clearance form and social security clearance and work program.” The table compiled at the tender opening, and included in the report, does not support that claim. The report does not indicate whether these “necessary documents required by the Technical Services Division” were different from that of the Tender Dossier.
b)The corrected tender figures were not used in the analysis and there are some further arithmetic errors in the presentation.
It is clear that the conditions and requirements laid down in the instructions to tender were not used to evaluate the tenders, and therefore to select responsive tenders.
a) From the report submitted for public scrutiny, George Trucking and Excavation Services, and two (2) other tenderers ought not to have been considered further as they did not meet one or more mandatory requirements.
b) Tenderers were not rated on the recommended submissions.
There is no documentary evidence presented to the public that the report and recommendations presented by the “Ministry of Public Works and Public Utilities” and publicly defended by the Minister, was approved by the Technical Services Division, or that it formed the basis of its recommendation to the Ministry of Tourism and Legal Affairs.
From the report, it is concluded that
a) A decision to award the contract was based on an ESTIMATE, rather than market price, and the tender recommended for award was not substantially responsive in accordance with the tender documents, that is, the recommended tender did not meet all mandatory requirements.
b) That the process used for award of contract for the 1st Phase of Roseau River Promenade project
a) showed some level of professional incompetence or lack professional oversight, and
b) resulted in an award which cost the tax payers 24% more than the market price obtained from a fully responsive tender.
b) That such practice of subjective evaluation of tenders lends itself to over-taxation of the populace and possible corrupt practices.
[i] http://go.worldbank.org/BT2Z8XA8Z0
[ii] http://www.caribank.org/uploads/2012/03/Procurementguide2006.pdf.
[iii] http://ec.europa.eu/europeaid/work/procedures/index_en.htm
Tony 100% supportive of you and ACE and the great work you do on the island. You employ alot of Dominicans and allow them to feed themselves and their family which is more than our government does. Thanks for being brave and exposing this deep-seeded corruption on our island.
I love this public debate. It is a forum for education and sharing of information. It is so much more rewarding to read debates like these rather than the foolishness dished out by Tony As Taphan.
The State gave us two or three statements about what happened in the tendering and award of phase 1 of the promenade project. And it was very clear that the process is flawed because it is based on the Almighty Engineers Estimate which the State seem destined to honour (or honour when is wants to). What is also difficult for the public to digest is the reason why a reputable firm is denied a contract SIMPLY because it is efficient enough to deliver the project at a cost less than what the Engineers estimated. How on earth does the Minister of Works expect the public to believe that! How on earth does Mr Blackman expect us to believe that only the budget submitted by a contractor is relied upon to make a determination about who gets the contract! Isn’t there an analysis of previous works undertaken by the contractor? I feel ashamed when I read such nonsense by senior pubic officials. On the other hand, Mr Leblanc’s point is that a more sturdy and competent system should be used to determine the award of public contracts. I agree with him! He writes over and over that we should be moving in the direction of a law which comes into effect next year. One of the reasons provided by the State for the late coming in effect of the new contract law, is that they needed time to get things in order. But we are seeing than less than five months before the law comes into effect, the State is still forming the royal. And we seat there talking about Lennox while all these shit goes on in the State.
Tony you keep your head up! In this land of low standards and corruption this is the most difficult stance to take. It is the moral stance and it is the admirable and courageous position to take. So many of our professionals lack this courage and support the demise of this democracy.
So are we upset because we are no longer able to get the contracts. Have we fallen out of favor
Tony I noted that George Nanthan had not received clearance from SOCIAL SECURITY. Since the respondents ft pundits it necessary to put the report of the award as a means to discredit our concern maybe they should have been been more aware that some of us do read. By the rules of engagement George and the other contractor who were not in good standing with the SS division should have been automatically disqualified.
Tony on the issue of the engineer’s estimate, I disagree with your opinion that the EE is archaic. It is used everywhere as a yard stick to the owner. Is the Engineer’s Estimate gospel? No it isn’t. Many times the EE is way below the “street value”. It is from the EE estimate that the owner makes critical decisions pretty and post bid.
A more proven system of award need to be implimented. That should include the adoption of bid and performance bonds. The contractors may complain but the bond are a necessary evil. The added cost to be assumed by the owner but will protect the owner from low ballers who passed the qualification process.
The 5 to 10% range system is what I think is archaic in a design bid delivery system. The objective of design bid procurement system is that award goes to the lowest qualified bidder-period. The lowest quslified bidder may be disqualified post bid and the award must then go the second lowest qualified bidder.
Tony there is so much information in what was presented by and I really love this line…” Engineers figure is a divine figure…….It is only an estimate.”This is so true . The engineer may have overlooked something which could blow up the figure. Anyway thanks for so much information. I will comment again but will have to read this document again and again. One thing I know is that the selection criteria as stated by you, Mr Nanton does not meet those requirements and should have been disqualified.
Thanks for “standing up Sir!”
Sometimes we destroy our own credibility and tend to blame others. That is what you have done tony. I hope you advisers has some projects line up for you. Good luck in getting more projects from this administration.
Please explain just do not make this blanket statement – show us by counter arguments please. Else it is you who will end having little or no substance.
my god will he be banished because he spoke up and he is not in line with the government? what does he have to lose anyway from all observations the government will corrupt all procurement procedures to give jobs to their people.
Look Dominica is a small country.
If these ppl want to destroy the economy all they have to do is keep frustrating the business community .
Good work!
From what I saw in the award process it appears that the result was predetermined.
i appreciate your high level of discourse. Thanks for disclosing and educating the public and therefore exposing corruption plus being professional in doing that.
Tony you have lost all credibility, I suspect Lennox plagiarize that one for you
You obviously don’t understand the meaning of plagiarism so it is fair to conclude that you are just another one of Tony’Stewart monkeys.
Would you really know ‘credibility’ even if it came up and introduced itself to you? Here the man lays out chapter and verse from a professional point of view … and this is all you have to say? If you think he is wrong ..point out where …’cause I can’t spot it yet.
@ The lowest Bidder……..And Skerrit brain washed you! Sick People! I dont think you understood anything the article said…Go educate yourself!