NWA reports on fake material probe

Wednesday, January 17, 2018

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National Works Agency (NWA) boss E G Hunter yesterday said that after extensive investigations into fraudulent material test results from 36 subcontractors, no proof has surfaced that any of the works under those contracts carried out three years ago were compromised.

The issue of fake material test results on contracts amounting to $813 million first came to light in a performance report of the NWA, which was submitted to Parliament by the Auditor General's Department in December 2015.

The report, which focused on the quality assurance functions of the NWA for the period 2009 to 2014, was fleshed out at yesterday's sitting of the Public Accounts Committee (PAC) at Gordon House.

“The actual contracts that were compromised as a result of that allegation were subsequently investigated by ourselves to find out if there was any compromise in the quality of the work and our internal report said 'no' …the evidence at our disposal does not support a position that the actual works were compromised,” Hunter stated, pointing out that the Office of the Contractor General had also initiated its own investigation into the quality of the works, and that also came up clean.

He also told the committee that it remains uncertain whether the initial results were from legitimate tests, or were “a hoax”.

“On the face of it, the results were all genuine…the test results came in on company stationery, but it turns out that the company said we did not authorities that …At this point in time that is still an allegation; because notwithstanding the contractor general's investigation, and notwithstanding the police investigation, we have not been told conclusively whether or not a fraud was actually perpetrated,” he stated.

In her report, Auditor General Pamela Monroe Ellis took issue with the NWA's quality assurance system, pointing out that because the agency did not have a mechanism to independently obtain material test results, these tests were done privately by the contractor with the increased risk of incidents such as the 36 fake results. According to Hunter, the NWA does 75 per cent of tests on materials in its own labs.

He assured the committee that despite no findings that the works under the tainted contracts had suffered, the NWA has moved to enhance its protocol for dealing with private labs. “Whereas previously we would take it on letterhead with the company stamp, we now require letterhead, company stamp, and two signatures, not one,” he said.

He also noted the auditor general's suggestion that the NWA should obtain the results directly from private labs, bypassing the contractor. “We have not jettisoned that idea entirely, but the contract for the lab work is a contract between the lab and the contractor… our excursion into that arrangement has to be moderated, so we would have to get the contractor's consent or something like that; it is not something that we can do unilaterally, but certainly we will look at that,” he said.

Responding to concerns about the possible risks associated with using private labs, Hunter said that under the Fair Trading Act, contractors could not be forced to use the NWA's facilities.

“That's called restraint of trade, and we can't do that, so what we do is that the labs that the contractor nominates, those labs are visited, analysed and certified by the NWA. That certification lasts for two years and can be withdrawn if the quality profile of that lab does not match the requirement of the NWA,” he explained. However, this process is not regulated for the approximately six labs that are used, he said.

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