AUDITOR-GENERAL Adrian Strachan yesterday appeared to support the Contractor-General in stating that it was his opinion that project managers, the state-run Urban Development Corporation (UDC) had violated the procurement procedures.

Strachan was making his submission to Parliament’s Public Accounts Committee (PAC) which is investigating the massive US$43 million cost overrun on the Sandals Whitehouse Hotel, jointly built by Ackendown Newtown which is owned by the UDC, the National Investment Bank of Jamaica and Gorstew, owners of Sandals which manages the hotel.

“I am satisfied in my own mind that it (the procurement guidelines) did apply to them because the government, through its public agency, had controlling interest in the organisation, so to me it is clear,” said Strachan, echoing Contractor-General Greg Christie who had said in his own report that the UDC had breached the government guidelines.

But Strachan added that he could understand why others might have had some doubt as to whether the guidelines should have applied to the project.

“There is no doubt in my mind that the award of the contract to Ashtrom ought to have followed government procurement guidelines at the time, you needed to go to competitive tender, needed to get the National Contracts Committee recommendations, you needed to get cabinet’s approval,” Strachan said.

He admitted that while he could be ‘sympathetic’ as to why there might have been some doubts about whether Ackendown was subject to the requirements, he was satisfied that the guidelines applied to the company.

Strachan also suggested that it was “appropriate that the procurement requirements be elevated to the position of legal requirements” and that sanctions should exist where there were breaches.

Strachan’s wishes preempted Deputy Financial Secretary Robert Martin who disclosed that the government would be fast tracking legislation to impose sanctions on individuals who flout the procedures prescribed for the procurement and award of public sector contracts.

Martin made his submissions to the PAC meeting which questioned the UDC on its adherence to government procurement guidelines with respect to the Sandals Whitehouse project and its approach in awarding the construction contract to Ashtrom Building Systems Limited.

Martin said sections of the Financial Administration and Audit Act were to be amended to allow surcharge to apply in cases of procurement that do not follow the prescribed procedures. He told the PAC that the changes to the Act would apply mainly to central government agencies.

The deputy financial secretary said the timeline for enactment would be March of next year Opposition members of the PAC took the UDC to task for what they said was its failure to comply with the procurement guidelines for government contracts, despite the corporation’s arguing that “it was (its) honest belief that the government procurement guidelines did not apply”, given the joint venture nature of the undertaking and the fact that the Ashtrom contract preceded the procurement guidelines which were not officially in force until 2001.

Attempts by government member John Junor to support the UDC on this claim also proved futile when PAC Chair Mike Henry, supported by opposition member Audley Shaw, pointed out that a system had always been in place for the procurement and award of contracts, as the Government’s Contract Committee had been in operation prior to the establishment of the National Contracts Commission.

This was supported by the deputy financial secretary who noted that “there have always been procurement guidelines from as far back as the 1980s”. Furthermore, he said, the amended Contractor-General’s Act lays down the guidelines for procurement.

The sitting was almost brought to a premature end when an attempt by opposition member Clive Mullings to question the competitive tender process under the project led to a heated exchange between members, which lasted for several minutes. According to Mullings, the parliament had been led to believe that the reason Ashtrom Building Systems Limited was chosen was because contractor Caribbean Construction Company Limited could not participate in the project because it was downsizing. According to Mullings this did not hold true.

In the shouting match that ensued, government member John Junor said the opposition would not be allowed to ‘propagandise’ the issue while Shaw insisted that the truth would come out and nothing could be done to prevent this.