The island’s sole water company broke its own tendering rules when it awarded a multi-million dollar contract for the leasing and purchasing of several water tankers during the 2016/2017 financial year, Auditor General Leigh Trotman has discovered.
Trotman said in his report released earlier this month, that through a public tender the Barbados Water Authority (BWA) requested bids for the acquisition, through either lease or purchase, of four tankers to assist with its water distribution efforts throughout Barbados.
He concluded that the BWA had acquired the tankers “under circumstances in which the tender process did not comply with its policies, as the contract was awarded to a company which did not meet all the necessary tender conditions”.
“The Barbados Water Authority deviated significantly from compliance with its procurement policies and procedures in the sourcing and tendering practices for the purchasing and leasing of the water tankers,” Trotman concluded, adding that “the tender process was compromised from the time the bid from firm 2, who did not meet the qualifying criteria, was examined”.
He did not name the firm involved, or either of the two other firms that submitted tenders. Only one of the three firms met the qualifying criteria for leasing and purchasing, the auditor general said.
This notwithstanding, the BWA’s evaluation committee decided to examine the proposals of the firm which met the tender conditions, as well as a firm, which he referred to as firm 2, which did not supply a lease proposal as required by the tender.
Although the recommendation was made for the BWA to award the contract to firm one, the Audit, Finance and Tenders committee requested that both firms submit revised prices by February 2015.
While firm 1 submitted a response within the required time frame and a revised price was disclosed at the board meeting on February 12, firm 2 submitted its response in a document dated March 13, 2015, with a lower bid, and ending up winning that tender, the audit found.
Notwithstanding the decision to purchase four water tankers, the BWA board was subsequently asked to approve the leasing of eight tankers from firm 2, at a monthly cost of $60,000 plus Value Added Tax for five years.
Although the approval was granted at the board meeting on November 5, 2015, the lease with the company for eight tankers had already been signed before the request went to the board.
What is more, the time period agreed for the lease of the arrangement was 63 months, three months more than what the board was asked to approve.
While the agreement would have allowed the BWA to stagger the payments over the five years, the purchasing of the tankers would have required an immediate outlay of $2.44 million.
“Even though one of the water tankers was in an accident and has not been replaced, full monthly lease payments of $8,864.08 have continued to be made for the vehicle,” the report said, adding that “this has placed the authority in a disadvantageous position, since it is making lease payments for a tanker without being able to utilize its services, even though the insurance company had compensated the firm for the written-off tanker”.
In addition, the auditor general said, the monthly payment for the eight tankers was not in accordance with the lease agreement, pointing out that there was no evidence that the board had approved the variation of more than $2,900 paid per month.
The auditor general said there was no evidence of a financial analysis or evaluation of the terms and conditions of the proposal before a decision was taken.
He recommended that the BWA, which was in the hot seat for its handling of the south coast sewage crisis, should adhere to its tender rules, and all firms should be required to adhere to tender requirements or have their bids rejected.
“The submissions for all bidders should be opened at the same time for the sake of transparency,” he said, adding that no one should commit the BWA to any major capital procurement without the approval of the board and the ministry, or there should be consequences for such actions.
“The BWA should ensure that all contracts are reviewed by an attorney-at-law before being signed, to ensure that the necessary safeguards are in place and the interest of the authority is protected,” he added.