'No hanky-panky' in procuring fire trucks, says McKenzie

'No hanky-panky' in procuring fire trucks, says McKenzie

Senior staff reporter

Friday, November 20, 2020

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LOCAL Government and Rural Development Minister Desmond McKenzie assured the House of Representatives on Tuesday that the country's acquisition of 30 new fire trucks has been open and transparent.

“What we don't want is for the country to believe that there is some hanky-panky in providing these trucks for the Jamaica Fire Brigade (JFB). It would be a sad reflection on us, as a country, when we are doing what is necessary to safeguard the interest of the Jamaican people, that it is clouded in any uncertainty,” McKenzie suggested.

“This transaction is not clouded in uncertainty. It has been open and transparent,” the minister insisted as he closed his responses to a number of questions raised about the contractual arrangements for the vehicles by Julian Robinson, Opposition Member of Parliament for St Andrew South Eastern.

McKenzie informed the House that the contractual terms with long-time provider National Safety Limited (NSL), local dealer for the US-based supplier Rosenbauer Minnesota LLC, provided for 30 Rosenbauer Timberwolf apparatus body mounted on an international chassis and built according to local specifications with agreed pre-construction changes.

According to the minister, the contract sum amounted to almost US$24 million, with a cost per unit of $790,562, inclusive of spare parts, taxes and fees, or US$562,000, excluding the cost of spare parts taxes and fees contracted with NSL through the non-competitive direct contracting method of procurement.

McKenzie noted that over the past 13 years, the JFB has gone to competitive bidding for the provision of the trucks and, on each occasion, NSL has won the bid with the trucks provided by Rosenbauer America. The JFB currently has 39 trucks in its fleet, of which 37 are internationals bought from Rosenbauer through NSL, accounting for 95 per cent of its fleet.

He said that the majority of the trucks are 13 years and older, which led to the decision to use the direct contracting method — a procurement method in which only one contractor is invited to participate — to standardise the fleet.

McKenzie also explained that the JFB was not negotiating with any other company in relation to acquiring the fire engines. However, his ministry received an “unsolicited proposal” from Ian K Agencies — local representatives for German firm Magirus/Iveco — for 35 trucks, two wreckers, two water tankers, and other firefighting equipment. He said that the proposal from Ian K Agencies was followed by another correspondence from them, stating that they would not participate in the tender that was issued for procurement of the trucks.

He said that Ian K Agencies had proposed a contract sum of 14.4 million euros or US$17 million, including finance charges and excluding taxes and fees, for 30 trucks and two water tankers, and the approximate cost per unit for the fire trucks at 458.3 million euros or US$540, 857 excluding all taxes and related fees.

McKenzie confirmed that a JFB team of three officers visited the Magirus production facility in Germany to get a better understanding of their technology and their capabilities in manufacturing firefighting and emergency vehicles.

“In accepting this invitation to travel overseas, the JFB was very clear in their acceptance that this undertaking should not be in any way construed as a commitment to do business with Magirus, or any of its entities,” the minister said.

Robinson, however, rejected the US$21,151 difference between Magirus and Rosenbauer's price offer per unit, which the minister had provided. He noted that with the Rosenbauer vehicles being priced at US$790,000 each, and Magirus cost being US$540,000, the real difference in price was approximately US$250,000 and a total price $1.3 billion more than the cost of the vehicles from Rosenbauer.

“The question that has to be answered is, in an environment of scarce resources and severe constraints brought about by the COVID pandemic and other reasons, whether there is sufficient justification for using methods where there is a difference of $1.3 billion in the cost,” the Opposition MP noted.

He said that he had seen the justification reference to standardisation and a potential saving by the minister, “but there must be some cost-benefit analysis done to determine whether that justified going this direct contract route”.

Robinson also questioned the minister's position that there was no negotiations with Magirus, despite a visit to their plant hosted by the company.

“I would think that the company would conclude that the ministry was attempting to at least engage [in some negotiations],” he argued.

However, McKenzie said that it would not be the first time that representatives of the fire brigade would have ventured abroad to examine vehicles.

“It has been the norm. So there is nothing unusual about that aspect of it. [But] the Government of Jamaica does not entertain unsolicited offers and that was relayed to them in writing,” he told the House.

“Fire trucks are not something that you walk into a supplier and buy off the shelf. Those trucks have to be built to specification, and those specifications are laid down coming from the National Works Agency, which works closely with the Jamaica Fire Brigade to come up with the specifications, and those specification would cost” McKenzie pointed out.

“I think what we have to guard against minister is that given the large sum of money involved here, to continuously use direct contracting in essence guarantees a single provider for the contract in perpetuity,” Robinson suggested.

He said that the question that must be asked is whether it provides the greatest value for money for taxpayers.

But, McKenzie noted that Ian K Agencies had disqualified itself from the process, by informing the ministry that they would not be interested in participating in a tender process because they were not the agents for the trucks that were already in the JFB fleet.

“So, let me say members, it is clear from that, for years the JFB has been starved of the necessary equipment to fight fires, and I trust the integrity of the men and women of the fire brigade, that the process was followed. They adhere to the law to the last T,” he stated.

“Let us not throw cold water on the effort to equip the fire brigade to respond to the needs of the people,” he urged the members.

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