BCAD ‘corrects’ certain aspects of PM Skerrit’s 2020-2021 Budget Address

The Executive of The Builders and Contractor’s Association of Dominica (BCAD) met on 13^th August 2020 and reviewed certain aspects of the Prime Minister’s delivery in Parliament during the 2020/21 budget debate with regard to local contractors.  We found that the delivery contained a generous portion of misinformation, half-truths and other inaccuracies apparently meant primarily to mislead our local contractors and the general public about government’s actions including facilitation of local contractors.  Appendix A at the end of this statement presents part of the text of the Prime Minister’s delivery which this statement seeks to correct and to provide to our contractors and the general public appropriate additional perspective on the information given through the delivery.  BCAD encourages reference to Appendix A before continuing to read this statement.

• It appears to BCAD that the Prime Minister’s passionate delivery about local contractors was an attempt to cover up the fact that the 2020/21 budget provides very little support or facilities to allow local contractors to access government work in a transparent and competitive manner that will promote responsible spending of seemingly scarce public funds in a period when it is claimed that the economy is doing very badly.

• The majority of the capital works expenditure in this year’s budget, which is not financed by the World Bank, European Union or CDB, is earmarked to be procured through non-transparent hiring of non-local contractors and other foreign firms at likely high prices than the government would pay for similar works if tendered through public, transparent and competitive manners involving the participation of local contractors.

• The majority of government works not funded by the European Union, World Bank and CDB, especially over the last five years, has been done and is being done by foreign-based contractors and firms, through contracts entered with the Government of Dominica under largely no-bid questionable procurement practices, using local funds, including CBI generated funds. For example, according to Government reports, since Tropical Storm Erika it has spent over $240Million on Housing[1]. 900 houses were completed by one firm from 2016 to 2020, with a target of up to 300 in this financial year, all given to this one firm who simply subcontracts the majority of the works to other foreign contractors and provides a package of what is apparently intended to be hush scraps to a few local contractors.  Can the Prime Minister expound to his parliamentary colleagues, for the benefit of the general public, and say how much of the $240 million was transparently and competitively tendered in such a way that local firms, including contractors, hardware stores, and joint ventures of these, working with local or non-resident firms, were engaged by the government in a transparent and competitive basis to provide public housing?  Can the Prime Minister respond to that in parliament with the data from government procurement events?
• The Prime Minister in his delivery states “The fact remains that there are international tender processes and that is what happens, sometimes … International tenders require financial bond and resumé of projects.” Can he also reveal to Parliament and present factual evidence to indicate why, for such large sums spent on housing, no international standard tender process was used to obtain the best value for Dominican money obtained by taxpayers and through the arduous sacrifice of selling Dominican Citizenship? Can he also give the details of the [performance] financial bond and the resumé of construction experience presented in 2015 or anytime thereafter, not including works performed in Dominica since 2016, by the entity who has been given to build 900 housing units so far and up to 300 more units this financial year?

• Like housing, work is a basic human right and obtaining fair opportunity to obtain work in one’s country is a fundamental right of our local contractors who pay the taxes and whose citizenship rights are being sold to obtain the finance for the housing infrastructure. House building for local families has been the backbone of local contractor and hardware sales.  The policies of this government have deprived particularly small apolitical local contractors,  hardware stores and their hundreds of pre-2016 employees of livelihoods while increasing profitability for a select few foreign firms.

• The Prime Minister in his delivery seems to be burdened by and clearly articulates his dismay at being unable to stop local contractors from successfully tendering for and efficiently constructing works financed by the CDB, European Union and the World Bank.

• The fact is that the Prime Minister as Minister of Finance is doing very little, if anything, to ensure that conditions agreed upon for the financing of works by external sources are packaged to ensure that they are within the reach of local contractors. Recent procurement events by the Work Bank, CDB and European Union has seen many of works which have been traditionally executed by local contractors, packaged with conditions that make access to these works by local contractors very difficult.  These conditions for packaging of works and services are generally enshrined in the financing agreement between these funding agencies and the Government of Dominica, represented by the Ministry of Finance.

• We have had recent cases where one of the Government’s preferred large foreign contractors, who has been awarded government works and subcontractsworthTens of Millions of dollars, is actively competing with small local contractors for CDB BNTF works valued between $500,000.00 and $2.0 million. The Contract and Public Procurement Act No. 11 of 2012 which came into force in January 2015 has provisions under Section 10 and 40 which are meant to protect the interest and facilitate the growth of small contractors and suppliers.  Can the Prime Minister tell Parliament why, after more than five years, he, as Minister of Finance, has not seen to it that these provisions are utilised to facilitate and promote the non-discriminatory growth and advancement of small contractors?

• Notwithstanding these government ordained challenges that the local contractors face, the Prime Minister is well aware that in recent times, local contractors have successfully tendered for works, in an open transparent manner, against his preferred foreign contractors whose offers were at times greater than 200% more than local contractors. For example in a recent public tender opening, a company called CEI who is currently engaged to undertake significant public works via unclear procurement practices made priced offers on five(5) work packages at 131% to 230% higher than offers from local contractors.  Another foreign company similarly held in high esteem by the Government of Dominica,  NHI  offered prices for these five(5) work packages at 118% to 204% higher than offers from local contractors.  This is an indication that our government is paying significantly more, at times more than double the market price, for construction works under its current procurement methods for locally and CBI funded works.   Given that some of these entities are subcontracted by another foreign firm, the real impact of government’s current procurement on public financing may be far greater that is declared or easily apparent.

• It may be insinuated, given the many recent public tenders put out by these external funding agencies, that our government is apparently being irresponsible and wasteful of funds obtained under the CBI programme in providing no-bid work to many foreign contractors and firms while denying local contractors opportunities to contribute not only to the development of the country, but in helping the country manage its scarce finances by submitting conscientious offers for these works.

• BCAD, therefore, challenges the Prime Minister to engage a firm, local or foreign, through a transparent process similar to those under CDB, World Bank or European Union consultant hiring protocol, to undertake a forensic audit of the massive amount of no-bid-work procured by the government through foreign firms with the aim of assuring the public on value for money, quality of construction, economic impact and relevance. We request the Prime Minister to present the report of this investigation to Parliament within the next six months. This should include a report to the country as to why a contract which was awarded to a supposedly Barbadian entity for constructing a 1000 houses on an emergency fast-track basis immediately after Hurricane Maria in December 2017 has deliveredonly112 houses to Dominican families as of July 2020[2].

• The Prime Minister alleged, “As a result of this government investments in local contractors, because before we came into government there was no local contractors who could tender for a CDB project, or for an EU project, or for a World Bank project. And because this government have empowered local contractors some of them are now able to tender for CDB, EU and World Bank projects.”It is sufficient to educate the public with regard to externally funded projects:
  1. The Grand Bay Secondary School and the Castle Bruce Secondary School were built before 2000 by local contractors and funded by the CDB
  2. The Rural Water Supply Project largely executed before 2000, was funded by CIDA (Canadian Government) and constructed by local contractors.

• That local Contractors who were qualified to tender and construct works funded by CIDA, CDB, World Bank and the European Union before 2005, would have gained this qualification based on works before 2005.

• Interestingly, however, the Prime Minister has failed to indicate, for the last five years for example, which locally funded (tax or CBI) project that local Contractors, who qualify to tender and deliver on CIDA, CDB, European Union and World Bank-funded projects, have been allowed to tender and construct works under a transparent and competitive basis.

• The Prime Minister alleged, “There was a tender for the North East Comprehensive School – the Auditorium – a Trinidadian Firm won the tender, the bid, and I stood up and I said no, give it to Stewco.”Briefly, The Trinidadian firm “Plumber” won the bid and started executing the work but could not complete the delivery. By a short-listed process, under European Union procurement rules, Stewco Construction Company Ltd, a local Contractor, was awarded the contract to complete the works and did so successfully in 2005without any central government interference in the procurement process.

• BCAD is very concerned that the Prime Minister, in making these irresponsible claims publicly, that he has influenced the handing over of contracts financed by these funding agencies, is not acting in the best interest of our country. In making such statements,  that he can and has influenced in a very illicit way the awarding of contracts by these financing agencies, the Prime Minister is not only publicly admitting irresponsible behaviour but is putting Dominica’s ability to attract legitimate funding at very high risk.

• BCAD is however concerned that PAHO, in its procurement of works under the smart health facilities project, may have at times exhibited certain questionable procurement practices which have seemingly deviated significantly from the normal practice of these internationally reputed funding and development agencies. BCAD is concerned that for at least one procurement event which required pre-qualified action by local contractors, PAHO, having to cancel the events citing above budget tender returns, in a rather questionable manner proceeded to negotiate a contract sum by leaving out the two lowest tenderers in the negotiation process for an acceptable contract sum. These two lowest tenderers were submitted by local contractors; they were not granted the opportunity to negotiate an acceptable contract sum with the PAHO even if they both pre-qualified and post qualified; instead, the PAHO procurement team entered into a contract for the Grand Bay Hospital upgrade works with an entity whose tendered sum was significantly above that of two local contractors.   BCAD requests that the Prime Minister shows true support for local contractors by requesting from PAHO’s Director, Dr Carissa Etienne, an investigation into this procurement event and other procurement events conducted by the PAHO procurement team.

• Construction of Health Facilities: Given that practically all our current health and community centres were built by Local Contractors, it is a very sad period in our history that not one of the twelve (12) health and community centres being built today, as well as the Marigot Hospital, were offered up to tender for local contractors to be afforded opportunities to participate in their construction. Instead, the government is asking local contractors to apply to the foreign firms given to build these centres, to be their sub-contractors! Is this the opportunity provided by Government to local contractors, to be relegated to beggars in a food stamp society? Importantly, however, this action results in even higher procurement expenditure for the government as the foreign firm has to include its mark-ups over the price the local contractors would have undertaken the works directly for the government.

• Hotel Projects Under CBI funding: Will the Prime Minister declare to Parliament why is it that the funding for these projects does not include clear packages that allow and encourage the development of local skills and engagement of local contractors on these works? Can he give the details of how many failed foreign contractors the Anichi saw before our local contractor came to the rescue?  Can he tell Parliament why is it that a local contractor was used to finish and improve on poor work by the preferred foreign contractor at the Kempinski?

• Bellevue Chopin Housing Project: Can the Prime Minister tell Parliament why is it that even while seemingly engaging BCAD, Engineers and Architects on a housing delivery proposal in 2016, that the Government engaged a firm with limited housing development in its resumé to develop this housing project? Can he also provide details of the clouded sub-contract tender process for the housing units where local contractors were competing against two foreign firms, including the Chinese government-owned CCECC, and to indicate why were submitted prices never revealed? It is noted that not one of the over 300 housing units delivered in Bellevue Chopin was constructed by a local contractor or had a local subcontractor for roofing, electrical work, plumbing, painting, tiling or cabinetry.

• The Prime Minister called many names of individuals and companies in his delivery. Can the Prime Minister also declare to Parliament the name of the other local subcontractor engaged at Bellevue Chopin, and if it is true that a Minister of Government and sitting Member of Parliament has significant financial interest in that firm?

• The Prime Minister also claims that “The housing, outside maybe for toilet bowls and sinks, we buying all the material locally”.For the Bellevue Chopin Housing and many other housing projects, the hospital and other works executed by the Chinese Government-owned CCECC as contractors, practically only “sand, stone and cement” were purchased locally. It is curious that he is not making the same claim that concrete and aggregates are provided by local firms for the Marigot Hospital and some major civil works as even aggregates are being imported into Dominica for government work!

The Prime Minister summed his delivery by suggesting that the government has invested in contractors and was responding to an accusation that is false.  BCAD believes that it is fair to allow the Prime Minister to expound on his delivery in simple terms to our local contractors and to correct or iron out the seeming inconsistencies in his delivery and to name the accusation.

The Prime Minister is on record of offering to meet with Haitian Nationals on an issue.  The Prime Minister has also encouraged furniture manufacturers to organise themselves into a functional association which the government can engage[3].   The local Contractors in Dominica are not only nationals contributing to employment and the economy, but also have been organised for many years as a functional association and still awaits:

1. Since 1st February 2016, a response from the Prime Minister, who initiate a public challenge to local private sector in June 2015, on a framework for engagement with the Government on delivery of public housing,
2. Since 8^th December 2017, a promised meeting between the Prime Minister and the Executive of BCAD.

In this light, BCAD is providing the Prime Minister with another opportunity to meet with its general membership at a BCAD Zoom meeting to be held at 6:30 pm on Tuesday 25^th August 2020 where the Prime Minister can better articulate his delivery on areas wherein he has facilitated local constructors and enhance the livelihood of construction employees.  An invitation to the Prime Minister has been dispatched.

BCAD Executive

20^th August 2020.

Appendix A

Text of Main Points of Prime Minister’s delivery:

1. Majority of [Government] work is done by local contractors or subcontractors
2. The fact remains that there are international tender processes and that is what happens, sometimes
3. International tenders require financial bond and resumé of projects
4. As a result of these government investments in local contractors, because before we came into government there were no local contractors who could tender for a CDB project, or for an EU project, or for a world bank project.
5. And because this government have empowered local contractors some of them are now able to tender for CDB, EU and WD projects.
6. ACE was formed under my watch as Prime Minister[4].
7. There was a tender for the North East Comprehensive School – the Auditorium – a Trinidadian Firm won the tender, the bid, and I stood up and I said no, give it to Stewco.
8. The Health Centres, a local contractor, we looking for contractors, the one from Newtown, the one from Soufriere, the one from Colihaut.
9. On the Housing, we .. we … we are looking at it differently to ensure that more people are engaged.  All electricians, all the plumbers, all the tile men are Dominicans.
10. On all CBI projects, there is a local supervisor, engineer or quantity surveyor, and they are all Dominicans.
11. Mr Paris is now working on the Anichi, he has gotten a major contract there.
12. ACE Engineering worked on the Bellevue Chopin Project, he did the water component[5] and road component and there was another local contractor who got some aspects of it as well.
13. The Hospital, we buying all the sand, stones and cement from Dominica.
14. The Housing, … outside maybe of toilet bowls and sinks we buying all the material locally.
15. And so we continue to invest in local contractors.

[1]https://m.youtube.com/watch?v=x1fbr-oiPuY – Marpin News – 11^th August 2k20.

[2]https://m.youtube.com/watch?v=x1fbr-oiPuY – Marpin News – 11^th August 2k20.

[3]https://m.youtube.com/watch?v=E38G_mUCgUc – Marpin News Friday 14^th August 2K20.

[4]The Company Registry records that ACE Engineering Ltd was registered on 24^th March 1997.  Employment records of DOWASCO do not indicate any director of ACE Engineering Ltd after August 1998.

[5]ACE Engineering Ltd did not undertake any water component on the Bellevue Chopin House Project.  ACE Engineering Ltd was separately engaged under a CDB project for Water Supply Project upgrade.