Mandela landfill project
Shoddy evaluation seen but no attempt to manipulate -official
IDB loan may be inadequate
October 8, 2003
A senior government official has denied there is a move afoot to manipulate the procurement process for the improvement of the Mandela landfill as was alleged recently by a letter writer and says it was rather a case of shoddy work by the project implementation unit, a senior member of which is to be replaced.
Advertisements for the position will be posted shortly, the source says. The official adds it is unclear if the project will move ahead because the loan from the Inter-American Development Bank (IDB) for it amounts to US$900,000 of which US$660,000 is available for the Mandela site while the most responsive bid from BK International (BKI) came in at over US$2M. The award of this contract is still with the IDB for a final determination as well as the future direction the project will take.
The interim Mandela landfill project will provide for stabilisation of the landfill’s slope, the placement of a cap over the existing landfill as well as the construction of a liner for an extension of the landfill. Associated works for proper environmental management of the site are also covered.
The objective of the project is to close the existing open face of the landfill in an environmentally sound manner and to have facilities in place for effective environmental management of the facility.
The US$900,000 loan with a requirement for US$100,000 in counterpart financing from the government had been approved in January 2000 with disbursement expected over two and a half years at an interest rate of 1% in the first ten years and 2% thereafter. There is also a supervision and inspection fee and a 0.5% credit fee attached to the project by the Bank. The project was to be executed over 24 months. But the proposed improvements and extension would only give the Mandela landfill another 24 months shelf life to allow for the construction of a new landfill site at Eccles.
The loan facilitated the creation of the project implementation unit to oversee the project but a letter writer in the Stabroek News last Monday alleged a manipulation of the tender process relating to this project. The writer cited a number of inconsistencies in the ranking of the three bidders considered. The writer also spoke of the IDB’s refusal to give a “no objection” to BKI being selected as the bidder to go forward with the project.
The government official confirms bids came in from BKI, Crawler and Wheeled, and J McArdle Contracts Limited, as well as another bidder who had been disqualified for the project after the invitation to tender in April.
The source said that at the bid opening on June 17th, 2003 - opened to public scrutiny - BKI and Crawler and Wheeled were found to be compliant with requirements for the Inland Revenue Department and National Insurance Scheme certificates. The third firm,
J McArdle Contracts Limited is exempted from such requirements, as it has no local base. This situation is reflected in the documents recording the opening process for the bids, the official said.
The writer, however, noted that the evaluation report of the bids recorded Crawler and Wheeled as non-compliant with NIS and IRD requirements, which the IDB also highlighted.
The IDB in its response to the PIU for a no-objection to proceed with BKI, recognised that this was an error and asked for it be corrected. But Crawler and Wheeled did not achieve the minimum score in three of the five sections in which its bid was to be scored and hence its bid was considered non-responsive. As such, its financial offer for the project could not be considered.
The letter writer also noted that McArdle Contracts Limited did not achieve the minimum score for construction methodology, one of the scoring sections, and this allowed BKI to be the only firm whose economic proposal could be opened, thereby effectively giving the contract to BKI.
However, the evaluation sheet shows up one of the three evaluators omitting a score for McArdle Contracts Limited under the construction methodology. His total for that firm reflects an award of 20 points for the said omitted points. Even the IDB has recognised that the 20 points were intended and not recorded in the relevant row but showed up in the column total.
The writer had also queried the letters by the project implementation team to Crawler and Wheeled to provide updated NIS and IRD compliance letters when its bid was non-responsive and to BKI for an updated NIS compliance certificate. The writer inferred that this meant that BKI did not submit a current NIS certificate and as such its bid would have been non-responsive. The writer quoted a part of clause 23.6 of the General Instructions to Bidders which notes that corrections to make a bid responsive when it had not originally been responsive were not allowed. The writer alleged that the attempt to have BK submit an updated NIS certificate at this stage of the process was a manipulation of the process and BKI’s bid should be rejected.
However, the government official points out that what took place was that the PIU sent out a standard letter with minor alterations to the three bidders, which should not have been the case. The official recognises that there was no need for a letter to go to Crawler and Wheeled and that the letter to BKI was not to request an updated NIS compliance letter but rather only a request for an updated commitment letter from the Bank of Nova Scotia.
Additionally, the source notes that even though each of the bidders had already made a financial proposal, the letters urged them to bear in mind the prices at which they bid would play a crucial role in the final determination of the award of the contract.
The official concedes that it was a clear case of incompetence on the part of a project team official that saw the blunders being made. As to the Bank’s refusal to grant the no-objection, the Bank asked that the inadequacies, including the submission of updated commitment letters by BKI and Mc Ardle Contracts Limited (who had not submitted one initially), be corrected before the evaluation report is presented to the Bank for the no-objection.
The process is now back with the IDB for a final determination.