25 November, 2020

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Decision To Award Controversial Tender: “Fair” Play Or “Foul” Play?

By Gamini Jayaweera

Gamini Jayaweera

Gamini Jayaweera

Recent reports in the national newspapers state that the Ministry of Sports has recommended to award a Design and Construct contract to re-lay the 400m and 200m training tracks at the Sugathadasa Stadium Sports Complex to a tender submitted by a Joint Venture between Access International (Pvt) Ltd. and Conica-Veritas for the sum Rs. 334,291,610 excluding VAT. Based on the reports published in the newspapers, there are a few questions that need to be clarified by the Minister of Sports and the other responsible parties for the interest of the general public that due process has been followed to award this contract to the most economically advantageous tender. After all we are dealing with a large sum of public money and as such the authorities have a public accountability to demonstrate that no irregularities have taken place in the process of appointing the successful tenderer.

The reports indicate that this is a Design and Build tender open to a selected few pre-qualified tenderers. Normally, pre-qualification of tenderers is required for larger projects such as this to ensure that most suitable tenderers are selected because the complexity and the high commercial value involved with the project. Generally, six (6) to eight (8) tenderers are selected from the pre-qualification process to proceed to the next level which is the post-qualification tender stage. So, it is important to find out the criteria that are considered in a pre-qualification document to select the potential tenderers who would qualify for competitive tendering.

The pre-qualification process is different from the post-qualification tendering stage because it does not include price, programme, and constructability etc. A standard Pre-qualification document should have covered establishing the tenderers ability to design and construct the Works based on the professional experience of the Design team, Construction experience, Organisational capacity, Financial standing, Health & Safety records, and Reputation etc. Having scrutinized the above mentioned information in detail, it is generally accepted that under normal circumstances, any one of the pre-qualified tenderers has the capacity and the experience to carry out the specified works. It appears that the pre-qualifying the six (assumed 6) tenderers for this project the procurement team has followed the due process. So far so good. Appears to be Fair play.

Following the pre-qualification, the post-qualification tender documents should have been prepared and issued to the pre-qualified tenderers based on the Client’s brief which generally includes the Specification, Safety & Quality requirements, Specified Design and Construction Periods, the Period required by the client for Acceptance of Design, Approval process for the Construction, and the total Tender Sum to complete the Works amongst other things. The tenderers should have been notified that their tendered sum should be submitted with a priced Activity Schedule which helps the Authorities to analyse the commercial elements of the tenders. It also provides the basis for the authorities to certify the interim payments based on completed activities during the implementation stage.

But it appears as indicated in the press reports, a Clause has been included in the post-qualification tender document to disqualify the pre-qualified tenderers based on their ability to carry out the works. According to the newspaper reports, the Clause 3.5 states “Synthetic Track Manufacturer / Installer with experience in installing minimum of Ten (10) IAAF Class 1 tracks including at least one (1) in South Asia and minimum of Ten (10) IAAF Class II Synthetic athletics tracks including at least five (5) in south Asia.” This Clause should not have been included as part of the Specification in the post-qualification tender document because it is a prequalification Clause that should have been used to select the tenderers rather than for specifying the works that are required to be carried out. It is unfair and unreasonable to introduce such a Clause in the post-qualification tender document as the selected tenderers have already gone through the pre-qualification process. If the authorities wanted to disqualify the tenderers who do not fulfil the requirements of the Clause 3.5 they should have included such a Clause in the pre-qualification document to exclude the unwanted tenderers tendering for the project. The newspaper reports indicate that based on this Clause 3.5, five (5) tenderers have been disqualified. If these reports are true it is unfair and unreasonable to disqualify these tenderers on the basis of the Clause 3.5.

The inclusion of this unfair and unreasonable Clause at the post-qualification Tender Stage has raised few other important issues. This is a public funded project and therefore competitive tenders are required to demonstrate that the Contract Sum represents a fair value for the specified Works. If, as reports suggest only one Contractor has qualified under the Clause 3.5, how do we know that the tender submitted by this contractor for the sum of Rs.334, 291,610 is a fair value for the specified works? It has also been reported that two of the five disqualified tenderers have submitted tenders Rs. 56m and Rs. 34m less than the successful tenderer. I do not advocate that the lowest tenderer should have been awarded the contract without considering the other requirements such as pricing levels for individual activities, adequate time allowances in the programme for each activity, method of construction, and constructability, etc. How do we justify the over expenditure of at least Rs. 34m of public money by awarding a contract without sufficient competition to obtain the most economically advantageous tender? Is it Fair play?

In conclusion it must be said that preparing and submitting a Design and Build bid require lot of hard work within a very short period of time (tender period) and spend a substantial amount of money by the pre-qualified tenderers. Like in any other commercial business the tenderers take a commercial risk and submit their tenders in good faith expecting the authorities to act fair and reasonable manner in evaluating the tenders. May be the responsible officers are not operating in the commercial world to understand the unfair and unreasonable financial losses which have been imposed on these contractors by their action. No one is complaining if the evaluation is carried out on a level playing field after the pre-qualification. It is like choosing five (5) tenderers who could not carry out the Works, to submit tenders or conversely only one who could. May be the officials in the tender evaluation team have other valid reasons to disqualify the pre-qualified tenderers. The responsible parties have to answer these questions as quickly as possible to justify their actions because the relaying works to the athletic tracks are long over-due. If the newspaper reports are true, is it fair and reasonable to assume that awarding a public Contract for the sum of Rs.334, 291,610 on the basis of an evaluation of a “single’ tender demonstrates “Foul” play?

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Latest comments

  • 1
    0

    This certainly has a “foul” smell, and if we go on like this, very soon there will only “the already assured of selection” tenderer who will submit a tender. And this will apply to attracting even investors to the country across the gamut of activities.

    As you say, a lot of hard work, and a certain expenditure would have been incurred before the tender was submitted.

  • 1
    0

    Foul Play appears to have ended in emitting a foul smell. Unfortunately the politicos like the sweet smell of money when it is in large amounts. Who will go to the FCID?The Minister or the Members of the Procurement Evaluation Committee?

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