Appeal Court overturns Justice Chang’s ruling in awarding of contracts to security firm

The Appeal Court of Guyana has upheld the challenge brought by the Strategic Action Security Limited against the State in regard to that security firm not being granted a contract for the provision of security services to Regions 2, 3, 4, 5, 6 and 10.
In a decision handed down late last month, Appellate Justices Dawn Gregory, Rishi Persaud and Rafiq Khan overturned a May 9, 2014 decision by former acting Chief Justice Ian Chang, and set aside his refusal of an October 30, 2013 motion that challenged the awarding of the contract under the former Government.
The Appeal Court’s decision comes at a time when observers are continually calling for more transparency in the procurement process, especially in the awarding of Government contracts.
Attorney-at-law Sanjeev Datadin appeared for the appellant, Strategic Action Security, while Senior Legal Advisor at the Attorney General’s Chambers, Judy Stewart-Adonis, appeared for the named respondents — the Ministry of Local Government and the National Procurement and Tender Administration Board (NPTAB).
According to the facts of the legal disgruntlement, Justice Chang discharged two orders brought by Strategic Action Security, one of which sought to direct the then Permanent Secretary of the Local Government Ministry, Collin Croal, to quash the decision of the ministry to conclude the applicant’s contract.
The litigant’s grounds were that the court’s decision not to grant that order was, among other things, arbitrarily unreasonable, unlawful, and was null and void and hence illegal.
A second Order of Certiorari had sought to direct NPTAB to quash its decision to award the contract for Coastland Regional Administrations to Homesafe Security and Domestic Services Inc. on grounds that this was a “flagrant breach” of the provisions of the Standard Bidding Document that the ministry produced. This was also refused by Justice Chang at the High Court by way of discharging the Orders Nisi which had been granted on October 30, 2013.
Justice Chang had reasoned that the non-disclosure of pending criminal charges and the exclusion of Value Added Tax (VAT) from the Tendered Bid sum were material breaches the Procurement Act of 2003. The Appeal Court noted that the former acting Chief Justice exercised discretion when he refused to interfere with the NPTAB’s decision on the matter.

Appellant’s objections
Contrary to Justice Chang’s ruling in 2014, the Appellant, the security firm, cited that the judge erroneously concluded that the bids were VAT exclusive, and the judge “failed to take into account” that the Bid Protest Committee did not meet to decide the Appellant’s case. The Procurement Act 2003 is intended ‘to promote fairness and transparency in the procurement process.
The Appeal Court cited that the advertisement for the provision of security services for Regions 2 to 6 and 10 specially stated that “Bids will be conducted through the National Competitive Bidding procedures specific in the Procurement Act 2003.”
It was highlighted that Strategic Action Security’s then Managing Director, Richard Khanai, was charged for receiving stolen property and placed on bail three weeks before the submission of the company’s tender. Justice Chang had reasoned that the Appellant’s failure to make this disclosure amounted to a material breach, as the term “any litigation” attracted the disclosure of pending criminal proceedings.

Determination
The Appeal Court, in its interpretation, disagreed with Justice Chang’s “skewed interpretation” of “any litigation”, further noting that the charges against Khanai could not form the basis of rejecting the bid. The Justices further found that the company’s non-inclusion of VAT in the bid figure was a technical breach as a “simple” mathematical calculation would have revealed that the Appellant’s bid was the lowest.
The Justice observed that the Appellant should have first petitioned the Court to compel the Bid Protest Committee to hear and determine its complaint. The Appeal Court, however, set aside Justice Chang’s May, 2014 order and made the Order Nisi on October 30, 2013 absolute. The Strategic Action Security Limited was awarded court costs in the sum of $150,000. The judgment was delivered by Justice Rishi Persaud. (Shemuel Fanfair)