The PPP/C Government will be implementing stringent measures, such as stronger penalties and lawsuits, this year to deal with delinquent contractors, who continue to waste taxpayers’ money and produce substandard, shoddy work.
This is according to Attorney General Anil Nandlall during his weekly programme – Issues In The News. He pointed out that this administration is overhauling the entire procurement process so as to ensure that contractors can no longer be negligent on Government projects.
“For years, we have had millions and millions of dollars haemorrhaging in this procurement process and in the way contracts are being executed. Well, now it will not continue anymore. Legal proceedings will be filed against contractors when they breach their contracts; contracts will be terminated; liquidated damages will be applied where appropriate; and contractors will be sanctioned for delinquent, negligent, and substandard work. It cannot be business as usually anymore,” the Attorney General asserted.
Against this backdrop, Nandlall disclosed that, in the coming days, lawsuits will be filed against certain firms for violating their contracts with Government.
“This month, two contractors will be sued for breaching their contracts with the Government, and millions of dollars will be claimed against them for breach of contract. For loss of use of the public facility which they were contracted to build, liquidated damages will be applied, interest will have to be paid on the Government’s money, and there are going to be other consequences that will affect their ability to get work in the future,” he disclosed.
The Attorney General added that even state engineers found to be complicit will have to face the same fate.
“They will also be penalised, and they will also be joined as defendants and sued with the contractors; because, in many cases, it is either through their negligence, through their oversight, or, quietly frankly, through their conspiratorial actions that the contractors are able to perpetrate and perpetuate these travesties and violate their contracts with impunity,” the AG stressed.
Nandlall, who is also the Legal Affairs Minister, further disclosed that Government would be creating offences along with penalties for contractual breaches.
“We are reviewing the Procurement Act to create some offences, and to add high-penalty criminal offences when there is violation of that legislation, so that the Auditor General’s Report can have teeth when it comes out,” the Minister disclosed.
According to AG Nandlall, “We welcome contractors, but we want good quality work, because we are paying good taxpayers’ money and a lot of taxpayers’ money, and this haemorrhaging; this unlawfulness; this humongous wastage must stop.”
Since taking office, the PPP/C Government has already terminated several multi-million-dollar contracts due to a number of breaches by contractors. Among those terminated are the contract to Courtney Benn Contracting Services for reconstruction of the St. Roses High School, and the contract to BK International Inc for construction of the Yarrowkabra Secondary School.
The contract to rebuild the St Roses High School in Georgetown was awarded in 2018, but works have been delayed due to issues with the advance payments as well as design changes. The previous coalition regime had extended the deadline in December 2019 to August 2021. However, the contractor hardly did any work over the last year.
Auditor General Deodat Sharma had recommended that the contract with Courtney Benn Contracting Services be terminated on ground that the contractor failed to complete the work more than a year after the award.
It was reported that only nine per cent of the works had been completed; that is, the driving of piles since the extension, but the cost of the project went up to $412.3 million from $352.7 million, and this new sum included pile driving.
In the termination letter issued by AG Nandlall back in November 2020, the contracting firm was told that it “…has committed a fundamental breach of the terms of the contract, and as a result thereof, the Government of Guyana hereby exercises its right to terminate the contract with immediate effect.”
With regard to the $826.5 contract for the Yarrowkabra Secondary School, which was awarded in January 2020 despite the passage of the no-confidence motion against the APNU/AFC Government in December 2019, the deadline is March 12, 2021.
However, it has been noted that only five per cent of the schedule of works had been completed at the time of termination in November.
BK International was told that “…your company has committed a fundamental breach of the terms of the contract, and as a result thereof, the Government of Guyana hereby exercises its right to terminate the contract with immediate effect.”
The grounds for termination were cited as the failure to comply with the schedule of works, and the inordinate delay in the completion of work on the project.
Nandlall had said at the time of termination that Government would activate the provisions in the contract, such as a fine of ten per cent of the contract sum as liquidated damages, and have the company surrender its performance security as a consequence. (G8)