Specialty Hospital: Was Fedders-Lloyd disqualified or qualified?…

Last Updated on Sunday, 29 November 2015, 19:45 by GxMedia

The Finance Ministry’s explanation about why it decided to re-engage Fedders-Lloyd for the construction of a Specialty Hospital has raised more questions.

The Health Ministry under the then People’s Progressive Party Civic (PPPC) administration had said the National Procurement and Tender Administration Board (NPTAB) disqualified Fedders-Lloyd because of administrative deficiencies in its tender documents. The NPTAB had also cited the fact that Fedders-Lloyd had offered a 23 percent discount on the original price without including it in the actual bid of US$22.96 million. 

But the Finance Ministry on Sunday appeared to suggest that that company was still eligible for consideration.

“The MOF (Ministry of Finance) did not award a contract to Fedders Lloyd; the Ministry merely entered into a MOU (Memorandum of Understanding) with the second and, indeed, the only other qualified bidder,” said the Finance Ministry.

According to the Finance Ministry, bids by two other companies had been rejected by the NPTAB, leaving only two other India-headquartered companies- Surendra Engineering and Fedders-Lloyd.

After the then People’s Progressive Party Civic (PPPC) administration had scrapped the contract that had been awarded to Surendra Engineering, according to the Finance Ministry under the coalition-led administration, the only other lowest evaluated bid was that of Fedders-Lloyd.

But the Health Ministry under the PPPC-led administration had stated that one of the reasons for Fedders-Llloyd’s disqualification was that it had obtained its bid security from the Bank of Nova Scotia in Guyana rather than from a bank in India with correspondent relationship with a bank in Guyana.  The Ministry had said that it is not the lowest bid that necessarily wins but the “lowest evaluated bid.”

Government further sought to justify inking the MoU with Fedders-Lloyd on the grounds that the company has promised to complete the project at the 23 percent discount on the actual bid price of US$22.96 million.

“The advantages of proceeding in this manner, rather than going out for a new tender are many, including the fact that Fedders Lloyd expressed in the MOU its intention to hold its prices expressed in its original bid made some four years ago. In addition to being time consuming, a new tender will result, obviously, in price escalation due to inflation,” says the Finance Ministry.

Though the Finance Ministry has denied signing an agreement with Fedders Lloyd, from all official accounts it appears that that company as secured the deal to continue and complete works at the Liliendaal, East Coast Demerara site.

“Procedurally, therefore, there is no impropriety in the method used by government in entering the MOU with Fedders Lloyd with the intention of leading to an award should the conditions stipulated in the MOU be met by Fedders Lloyd.

The decision to utilize the instrument of the MOU safeguards the procurement process and seeks to optimize the use of Public Funds, in this case a loan, in the most beneficial way,” states the Finance Ministry.

The MoU, according to government, is for Fedders-Lloyd to examine works already done by Surendra Engineers and integrate those works within its proposed current design options, so as to lessen the burden of loss of funds already spent.

Fedders Lloyd says it will complete the designs and finalize the list of equipment, which was not completed by the previous contractor, to the satisfaction of the Ministry of Public Health.

If Fedders-Lloyd abides by the MoU, the Finance Ministry says the Tender Board will be invited to make an award of contract to that company.

Transparency Institute of Guyana Inc. (TIGI) and Opposition Leader, Bharrat Jagdeo have called for the project to be re-tendered. Jagdeo has also called for the NPTAB to release of the Evaluation Report.