Pre-tender audits of all major building and civil engineering projects should be carried out
May 29, 2002
Letters on stuff
The Mon Repos Sea Defence Fiasco, Inflated Bills of Quantities for the PEIP Schools, the Floating Charity Wharf, the East Demerara Conservancy Breach, just to name a few, all of which have resulted in wasteful government expenditure amounting to hundreds of millions of dollars being incurred since October 1992, could have been avoided if the following arrangements listed in order of priority, were put in place during the planning and execution of Major Building and Civil Engineering Projects undertaken by Government.
1. Pre-Tender Audits
2. Delinking Design and Cost Services;
3. Involvement of bona fide Land Surveyors and/or Quantity Surveyors as the situation may warrant.
Pre-Tender Audits will ensure the integrity of all Tender Documents with respect to Design, form of Contract, and the Scope of Work which may be represented either by Bills of Quantities or Bills of Approximate Quantities. Such Audits will perhaps require the joint services of a very experienced Civil Engineer and a Quantity Surveyor.
At a meeting held about three years ago in the Office of the Auditor General at the request of a local Group of Quantity Surveyors, the Auditor General was very supportive of pre-Tender Audits because his department will then be able to focus more attention on Post-Contract Auditing. However, financial constraints being experienced by the Audit Department prevented recruitment of suitable personnel for such tasks, or from hiring out such a service.
During recent years, Pre-Tender Auditing of Major Building and Civil Engineering projects was recommended to Government. Unfortunately, the Admin-istration remained reticent and unresponsive perhaps for the following main reasons:-
(a) Resultant slowing-up in the Tender process, and consequential delay in project implementation;
(b) Increase though very nominal in the overall project cost by allowing for Pre-Tender Auditing Fees.
There may be other reasons which being more subjective and speculative, do not qualify for mentioning here. However, current experiences have shown very clearly that the foregoing nominally negative effects of Pre-Tender Audits will by far be outweighed by the massive savings that can accrue when such Audits are executed. Government should cease being penny-wise and pound-foolish. Moreover, the mediocrity and impropriety that sometimes characterize the present system by which government contracts are awarded should be urgently revisited in expectation of saving billions of dollars.
International Financing Agencies like the IDB, which had been a source of funding for some of the aforementioned projects, must share some blame for the wasteful expenditure. Before tenders were invited for the first set of fifteen PEIP New Schools, Pre-Tender Audits were undertaken and executed on the sole initiative of IDB. However, exorbitant Tender prices were received (Tender Blues II Guyana Chronicle 2.10.93) because of a very unsuitable and discriminatory Tendering Arrangement imposed by IDB and supported by the PNC Administration but contrary to the Consultant's advice, which had severely restricted direct involvement of local Building Contractors in favour of foreign Contractors. The succeeding PPP/Civic Administration quite rightly rejected all Tenders, but quite wrongly blamed the Design and thereafter engaged new Consultants without even discharging Government's contractual obligation to pay off outstanding Fees owed to the former Consultants. Almost ten years have passed and those fees are still outstanding.
Before the newly designed PEIP Schools were put out on Tender, the IDB again organised another Pre-Tender Audit which was frustrated by the newly engaged Consultants through non-cooperation in making some very relevant documents available to the Pre-Tender Auditor, a Quantity Surveyor. IDB took no action to redress the situation, which inevitably resulted in inflated Bills of Quantities. Those inflated Bills of Quantities contributed to Government having to pay out over G$400M towards Arbitral Awards.
There can be no doubt that a pre-Tender Audit of any major Building and Civil Engineering Project undertaken by Government can yield dividends. Consequently, in the planning and implementation of such Projects, pre-Tender Audits must be deemed mandatory.
E. C. Browne
The Auditor General, Anand Goolsarran is in full agreement about the need for pre-tender audits. He said that lack of trained staff prevents his department from carrying out such audits.