IRP condemns unhealthy environment for awarding contracts

“Rather than coming up with solutions and helping to move things forward, the Department of Environment has chosen to try to prevent the problem from happening in the first place.Independent Review Panel to issue the necessary orders to ensure the integrity of the tender process herein (…) and in contradiction to the evidence and his own comments previously brought to our attention. These were the observations made by the Independent Review Panel (IRP) in its verdict following the contractor’s appeal against the contract awarded in July this year. In the process, the panel asked the ministry to cancel the contract and restart a new exercise.

The tender was launched on May 3 for repair and beautification works at places of worship across the island. On July 3, the environment ministry informed the contractor, A. Jauferally Enterprise Ltd, that its offer had not been accepted. Prakash Foolchand Contractor Ltd was awarded the contract. The latter’s offer was Rs 54,091,676, which was slightly lower than that of A. Jauferally Enterprise Ltd. According to the IRP, this is where things start to get more complicated and where the department got confused.

One of the reasons for not awarding the contract to the lowest bidder was that, according to the ministry, the engineers on the project did not have a total of five years of experience and two years of experience in similar work, which was still required standards. According to the ministry, the years of apprenticeship were not counted. In this regard, the explanations provided by the chairman of the tender evaluation committee during the appeal to the IRP were considered “unsatisfactory, confusing and sometimes contradictory”. The IRP also pointed out that the job description itself was not clear enough, adding that “If the wording had been clearer, a bidder like Mr Jauferally would have proposed ‘another engineer among the many I have worked with’.”The judgement also revealed that the engineer had been assigned to another project of the Ministry of Environment last year, which also required the same five-year experience standard. However, A. Jauferally Enterprise Ltd was awarded the contract without any problems. The nature of the work in both contracts was the same, the judgement said.

Lawless Ministries

The judgment also takes into account estimates. For all tenders, the ministries base their bidding on estimates. “This enables the administration to understand the cost of the contract. It is based on old contracts, inflation and market prices.” said an expert in the field. The IRP explained in its decision that these estimates must be “Etched in Marble””, adding that “subsequent changes can lead to poor governance, lack of process integrity and, if there is criminal intent, may even provide a breeding ground for corruption.” However, the judgment is clear: “The cost estimate changed at the end of the evaluation.” These estimates were revised after the bid opening after many discussions with various stakeholders. Also, the department would not be able to negotiate with contractors if the bidder’s price exceeded the estimated price by 15%. In this specific case, Foolchand Contractor Ltd’s price exceeded this threshold.

“In conclusion, we must observe that the ministry was given ample opportunity to rectify the situation rather than wasting time and resources and ultimately breaking the law”issued its judgment. In doing so, the IRP ordered the Ministry to reopen the tender, respecting the initial estimates. In addition, the IRP members wished to express their opinions in writing. “regret”their “Shocked” and their “Disappointed by the Ministry’s efforts to defend the case to the end”They added “We can only hope that this case is just an isolated and embarrassing blemish in an otherwise satisfactory record of public bodies conducting procurement procedures.”

not only…

This is not the only contract that has raised questions. On November 15, 2023, the Ministry of Environment launched a framework agreement for the construction and maintenance of places of worship. We understand that this work had previously been carried out through small one-off contracts. But this time, the ministry has changed its approach. Framework Agreement A three-year contract of Rs 300 million was therefore devised, under which the contractor undertook to carry out a number of upgrading works across the country over a three-year period.

The first problem with this contract was that the contractors that submitted bids were mostly Medium II category, which by law could not bid for contracts worth more than Rs 200 million. Of course, the tender documents provided that the contract could be allocated to ten contractors and carried out in phases, but the problem still remained. The base contract was set at Rs 300 million and each Medium II contractor had to bid for that amount, even though the law did not allow them to do so, even though the cost of each batch of work was less than Rs 200 million.

Eventually, two contractors won the contract, and they were not the lowest bidders. Moreover, one of the two exceeded the reserve price by 15% to an amount of more than Rs 356 million. According to regulations, the ministry cannot negotiate with contractors, let alone award contracts, if the price exceeds by more than 15%.

When asked about the controversy, the environment ministry promised to get back to us on Monday.