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$350-m suit

Construction firm takes Gov’t agencies to court over revoked registration

BY KIMONE THOMPSON Associate editor — features thompsonk@jamaicaobserver.com

Wednesday, February 19, 2014    

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CENITECH Engineering Solutions, the private construction company that had its registration with the National Contracts Commission (NCC) revoked in mid-December, is not taking the move lying down.

It is suing the commission and its parent body, the Office of the Contractor General (OCG), for $350 million, saying that the figure represents profit lost as a result of what the action of both parties. The suit, which was filed in the Supreme Court last week, also names the minister of agriculture and fisheries and the attorney general as respondents.

According to the statement of claim, the minister of information announced at a post-Cabinet press briefing on December 18 last year that Cabinet had approved the award of two contracts to Cenitech, as per the recommendation of the NCC. The contracts were under the Ministry of Agriculture's Barracks Relocation Project for Stokes Hall and Hampton Court, both in St Thomas, as well as in Springfield, Clarendon. The contract amounts were $465 million, $267 million, and $265 million respectively.

But on December 16, one of Cenitech's principals, George Knight — a former manager at the National Works Agency — received a letter informing him of the cancellation of the company's NCC registration.

The letter, according to the court documents, said: "The NCC's decision to revoke Cenitech Engineering Solutions Limited's registration is based on misrepresentations made on its application for registration submitted on December 14, 2012, which were uncovered in an investigation conducted by the Office of the Contractor General.

"In keeping with Clause 15 of the application form which states: 'If the information provided by the applicant on which evaluation and awards were based is found to be erroneous, then the contractor shall not be registered, or if already, the registration will be revoked,' your registration with the NCC is revoked. Kindly return your certificate forthwith."

But Cenitech, which is being represented in the matter by Dabdoub Dabdoub & Co, argues that the NCC has no legal basis on which to cancel its registration, given that it has not established the regulations to do so, according to sections 23E and 23G of the Contractor General Act.

The company maintains, too, that it was not given an opportunity to respond to the findings of the OCG investigation, but was instead hauled before a panel set up by the office.

At the time it tendered on the projects, Cenitech was registered by the NCC as a grade one contractor in the categories of building construction, civil engineering, and general road works. It had grade two for pipe laying and grade three for interior construction works. Up to last evening, the NCC website had it listed as such, even in spite of the alleged de-registration.

A source at the NCC, who requested anonymity, explained to the Jamaica Observer that grades are assigned via a computerised system according to the staffing, qualifications and experience that firms list on their applications.

The source explained, too, that the commission verifies and cross-checks all the information submitted on applications for registration.

"It is an audited process every step of the way. If one single piece of information is missing, the application is sent back. If the résumé is not detailed, for example, it is sent back," the insider said.

What apparently happened in Cenitech's case, the source surmises, is that the individual professionals listed on its NCC registration were different from those on the company's website.

But that, the source said, does not warrant revocation as "registration is a snapshot of the company at a particular time", which means that "once a company is registered and receives a physical certificate and all the staff (listed on the registration) leave, you can't remove any of the names for the life of the certificate, which is 18 months".

The NCC source confirmed that the commision has been served but could not say whether the agency will file a defence.

An attempt to get a comment from the OCG, as well, proved futile.

The claimant wants the court to grant an injunction restraining the agriculture ministry, "the Government of Jamaica and the Cabinet of Jamaica, whether by themselves, their servants and/or agents, from awarding the contracts for Springfield in the parish of Clarendon to any person or entity apart from the claimant".

Cenitech claims, too, that it has lost two additional contracts as a result of the revocation of its registration. The two are for road rehabilitative works in Bayside, Portmore, valued at over $66 million and in the Sandy Gully, valued at more than $90 million.

It also pointed to tender bonds in the sum of $25.6 million which it put up to secure the five contracts.

"As a result of the illegal cancellation/revocation of the Claimant's registration as Grade one contractor, the claimant has suffered and continues to suffer great and severe damages and loss of income by its inability to now tender on Government and/or public body contracts," the company claims in the court documents.

In addition to financial compensation, Cenitech is seeking to have the court overturn the OCG decision and reinstate its registration, as the action was "in breach of the principle of natural justice and/or procedural fairness". The company also wants the court to rule that the decision was invalid and of no legal effect, and that the NCC and the OCG acted "irrationally and unreasonably" in the matter, since they "failed to make regulations prescribing the circumstances in which registration may be cancelled".

The first hearing of the claim is scheduled for March 7.

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