Lowenfield defends paying $6,000+ for single pliers
..as GECOM ‘contract-splitting racket’ gets exposed at PAC
A racket uncovered by the Auditor General in 2015 attracted the attention of the Public Accounts Committee (PAC) of the Parliament on Monday, but legislators were left with unanswered questions because Chief Elections Officer of the Guyana Elections Commission (GECOM), Keith Lowenfield, has opted to await findings of a special investigation before making any further pronouncements.
The Auditor General had, in 2015, found that nine contracts to the tune $82.1M had been awarded to a single supplier for the purchase of toners and cartridges. Each of these contracts was found to have been split to below $15M in order to avoid Cabinet scrutiny.
The Public Accounts Committee heard that, on a particular day in February 2015, four contracts were inked for the supply of the same materials — toner cartridges, stationery and ink — which Lowenfield had attempted to explain were needed to run off the 2015 General Elections.
PAC Chairman Irfaan Ali took umbrage at this position, saying Lowenfield’s excuse was implausible because the contracts were issued in February for elections that were to be held in May, and several contracts had been inked at least 10 days after those elections.
Ali told Lowenfield the Auditor General’s position in regard to the contracts: “It is clear there was an intentional split to escape the level of scrutiny by Cabinet…” He then asked Lowenfield: “What is the explanation to go nine times to the same contractor? Do you see what is wrong here?”
The Chief Elections Officer told the Committee that permission had, in this respect, been sought from the National Procurement and Tender Administration Board.
According to the Auditor General’s findings, GECOM had, in 2015, spent $197.9M for office materials and supplies. Included in this sum were amounts totalling $82.2M and representing full payment on nine contracts awarded to the same supplier for the purchase of toners and cartridges. Investigations into the transactions are ongoing.
According to the Auditor General, the Procurement Act dictates that Cabinet shall have the right to review all procurements that exceed $15 million in value. A procuring entity, such as GECOM, shall not split a contract or cause a contract to be split — or divide a contract or cause its procurement to be divided into separate contracts — with the sole purpose of avoiding the application of any provision of the Act, or any regulations made therein.
The contracts at issue were awarded to the same local supplier between February and May of 2015. The contract with the highest value was worth $14.8 million, and that with the lowest value was worth $1.9 million.
According to the Auditor General, “The contract awards appeared to (have been) sub-divided, which breached the Procurement Act regarding splitting of contracts and review by Cabinet.”
He said, “At the time of reporting, in September 2016, the Audit Office was conducting further investigations into this matter.”
Lowenfield yesterday reminded the PAC of that investigation, and said GECOM is awaiting the findings of that special investigation being done by the Auditor General’s Office.
Lowenfield was also asked to explain why GECOM had decided to pay the astronomical price of $6,000 for a pair of pliers, when pliers are available locally at incomparably cheaper prices.
In late April 2015, three weeks prior to the May 11th General and Regional Elections, GECOM had doled out $14.8M to purchase pliers from Standard Distributors Limited. Defending the purchase, Lowenfield pointed to the bids received when the entity went to tender.
An audit is currently underway to probe a major contract entered into with Michael Brasse for the purchase of $100M worth of high frequency communications radio sets for the May 11 elections. From all indications, the sets were never used, and there are questions about the urgent reasons advanced by GECOM for those radios to be purchased in the first place.
Another query raised by the Auditor General and advanced by the Public Accounts Committee on Monday was the manner in which the money allocated to GECOM was being used. It was found that $235M had been allocated to GECOM, of which $220M were to have been used for administrative expenses.
The explanation advanced was that Cabinet had given permission for money allocated for one purpose to be used for another. Eleven digital cameras were reported stolen from GECOM’s Coldingen warehouse in 2005, and the matter was handed over to the Police. Regarding this theft, Lowenfield reported that the Police Commissioner had advised GECOM by way of written correspondence that there was insufficient evidence to lay charges against any person, thus GECOM has since stepped up security at the locations. He alluded to the use of police ranks stationed as sentries at GECOM locations, and the use of closed-circuit television. According to the GECOM CEO, sensitive materials are also stored under closer security scrutiny, and are monitored on a 24-hour basis.
PAC members also raised the purchase of $30M worth of Polaroid film from Acme Photo Studio, and were told that Acme has since gone out of business, but GECOM has since engaged the services of legal counsel to pursue the matter with the principals of that entity.
Other PAC queries related to overpayment made to contractors, failure to file financial returns, and failure to present vouchers for scrutiny, among other things.