THE Integrity Commission (IC) is urging the Government to implement a public contract management system or registry that will essentially put contractors who fall down on their obligations on blast.
The recommendation comes against the background of the findings of a special investigation which the commission conducted in January 2018 — under the Office of the Contractor General, now subsumed into the commission — to verify allegations of irregularity, conflict of interest, and corruption in the award of certain contracts by Petrojam Limited.
The report was tabled in the House of Representatives on Tuesday.
Furthermore, the IC's Director of Investigations Kevon Stephenson suggests that in an effort to institute strict controls to reduce abuse of the direct contracting procurement method, the finance ministry could adopt a similar approach on its procurement notice board as that of the European Union, where procuring entities are required to publish a notice in an official journal of their intent to award a contract under the single sourcing procedure.
"The notice must explain the grounds for excluding competition, and its publication should trigger a 10-day standstill period during which contractors may challenge the decision not to advertise," he said.
Based on the findings, Stephenson has referred former General Manager Floyd Grindley and former head of the procurement unit Ronique Budram-Ford to the director of corruption prosecution for further action, for the offence of misconduct in public office, breaches of the 2014 Government procurement procedures, breaches of the Contractor General Act-Public Sector Procurement Regulations 2008, and the Corruption Prevention Act.
The report has also been referred to the auditor general and the financial secretary to consider applying a surcharge against Grindley, to reimburse to the State oil refinery a total of $3.9 million, which was paid to Shalk Electronic Security Limited for security services from 2017 to 2018.
Stephenson pointed out that the award of three contracts to the entity to provide security services to the former board Chairman Perceval Bahado-Singh and Grindley were irregular, with no formal tender process used in their award.
Furthermore, Stephenson concluded that Grindley "may have acted negligently in the discharge of his fiduciary obligations and responsibilities, by his apparent disregard of the former procurement unit head's advice and caution, concerning the aberrance from the procurement guidelines," and his subsequent approval and insistence in the award of contracts to Main Event Entertainment Group Limited, using the direct contracting procurement process.
The commission also found that Petrojam awarded a $96.7-million contract to Construction Solutions to replace its north perimeter fence/crash wall, although it had estimated the replacement of the structure at $76.3 million, or 26.78 per cent less.
Following a request from Petrojam to the National Works Agency (NWA) in August 2016 to replace the fence, the NWA had provided a quote of $29.7 million to supply all labour, supervision, material, equipment, tools and transportation, and carry out the works. But Grindley wrote to the agency a few months later, advising that despite having accepted its quotation, the refinery had decided not to pursue the project through the NWA/China Harbour Engineering Company (CHEC).
According to Stephenson, Grindley had advised, by his response dated July 23, 2019, that Petrojam Limited had received a non-responsive bid proposal from the NWA to construct the wall in November 2016, and that this was not in compliance with government procurement policy.
It was further outlined that Grindley said Petrojam came up with an estimate in December 2016 for $43.6 million, and that an update to the estimate was done in January 2017 revising it to approximately $76.3 million.
The general manager said he was instructed by board chairman at the time, Dr Bahado-Singh, to engage Construction Solutions using the emergency procurement procedures to build the crash wall at the refinery, but according to Bahado-Singh, the report said, he "had no involvement and/or influence in the award of contract by Petrojam"…to the company.
The issues, including the engagement and multimillion-dollar retainer for Main Events Limited were previously aired at sittings of the Public Administration and Appropriations Committee during the hailstorm of controversy which engulfed the refinery in 2018, resulting in several senior managers parting ways with the company, including its former general manager, and HR manager.
The commission noted the retainer of $14 million which was paid to Main Events to provide entertainment and event management services to the oil refinery, despite the absence of a monthly entertainment schedule requiring this service.