Saturday, September 19, 2009

Jagdeo defends contracts

Kaieteur News news item, Saturday 19 September 2009 - "Jagdeo defends contracts…says engineer’s estimates just a guideline" -

By Gary Eleazar

Head of State, Bharrat Jagdeo, defended contracts undertaken by government agencies yesterday at a press briefing citing the open tender process.
According to Jagdeo, media operatives need to be educated on the various tender processes, adding that there are several agencies that Government gets funding from in the form of loans and grants with each of the agencies having their own procurement rules that are different to that of Government.
“In some cases you have an open tender and you have a point system…the persons who get the highest points based on technical capacity and the price… they get the contract.”
He noted that in other cases it will just go to the lowest prices after that contractor would have been pre-qualified, “in another situation like with the Inter-American Development Bank you have a two-envelope system.”
Jagdeo pointed out that this system was in place in the past where, “you only open the envelope for the highest ranked bidder…so the highest ranked bidder on technical terms might have the highest bid in financial terms, but you don’t get to open the other bids.”
He said that this was the case because that bidder would have been the highest ranked, “and you have to negotiate with them.”
He explained that it was only when the negotiations fail then talks will be opened with the next ranked bidder. “Our laws say the lowest evaluated bid.” According to the president, there was a time when the engineer’s estimate were secret and “many of the people could be corrupt…if you have three bidders they have a point system where they would say the closer you get to the engineer’s estimate the highest points you get.”
As such, he explained that if one were to know what the engineer’s estimate was, then that contractor would have had an advantage over the other contractors, “many of the contractors used to bribe people to get the engineer’s estimate.”
The president however noted that to the government, the engineer’s estimate was just a guide, “everyone should know the engineer’s estimate even before the bid, “because what happens is it is the lowest evaluated bid that we go with, “so if you know the engineer’s estimate it doesn’t matter to us…it is the lowest evaluated bid through a public competitive process that we go to.”
A point to note is that this newspaper has for several weeks now been requesting the engineer estimates for several projects but is yet to receive any of them.
“So a man can easily come like Kaieteur News could come and say we will get the pump,” Jagdeo continued.
He pointed out that they had defined the specifications of the pump, “and we go out to tender…we go with the lowest price once the people meet the specs(specifications)…so Kaieteur News comes along and says we could have gotten it for $10M cheaper.”
The president said that he did not know whether the pump that Kaieteur News managed to source for far less than what was actually spent was to the desired specification.
Jagdeo also suggested that if this newspaper could have sourced the pump cheaper then it should have entered a bid of its own, “because we have to operate on bids.”
The president noted that soliciting sole sourcing of items was not a transparent process in that it would involve the preferences of the purchaser, “the only transparent system that you have is a public tender.”
He said too that there may be some times when the lowest public tender is higher that the actual price but insisted that the public tender process provided against corruption.
“Whether we will get ripped off sometimes where we buy because of the tender higher than the actual prices are, or the tenderer makes a huge profit, there may be circumstances where this happens…I can’t put my head on the line for every contractor in this country or every Government Officer…I can’t put my head on the block for anyone.”
The president reiterated there is a public tender tendering process, unlike in the time of the PNC where according to Jagdeo, the Auditor General failed to probe contracts.
As it relates to the insinuation that the corps of contractors may have been inflating prices, the President did not group them in his answer, but said that it would be unwise for a single contractor to inflate the price in their bid, given that it would not be in their best interest as the lowest evaluated bid is used.

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