NDIA admits financial info was overlooked by evaluators

US$15M line of credit

… Minister says evaluators not required to probe consultants’ financials

A curious case has arisen on a public works contract which has the National Drainage and Irrigation Authority (NDIA) as the executing agency: the consultant who is expected to verify the quality of work done by the contractor has received a multi-million-dollar line of credit from that very contractor.
According to documents seen by this publication, C.B and Associates Incorporated has shared a US$15 million line of credit with construction company Samaroo Investments as of January 25, 2017. This line of credit was purportedly “for the purpose of any project undertaking or business venture that the (consultant) company wishes to undertake.”
Samaroo Investments would subsequently be awarded a $103 million contract for the procurement and installation of a drainage pump, and for work to be done on the Three Friends Pump Station located along the Essequibo Coast in Region Two.
Contacted with the details, Agriculture Minister Noel Holder noted that there is no requirement for the evaluators to have a look at the financials of a contractor’s consultant. He likened the situation to someone seeking a loan, but then having their relative’s bank account probed.
“For consulting purposes, there’s no reason why an evaluator should look into a consultant’s bank account situation,” the minister related to this publication.
According to NDIA Chief Executive Officer Frederick Flatts in a statement, the contractor issued a line of credit to the consultant on January 25, 2017. He admitted that the evaluators who were supposed to oversee the award of the contract overlooked the financial link between the two companies.
“Please note that our advertisement for both the consultancy service and the construction works was made on May 21, 2017, about four months later. The source of the line of credit issued to CB and Associates Inc. was completely missed by the evaluators,” he said.
According to Flatts, however, “No financial information was requested or required of the consultants, and therefore was not a part of the evaluation criteria. The evaluators therefore did not evaluate the line of credit, or its source.”

Investigation
In a statement to the media, Opposition Member of Parliament Juan Edghill has called for the Public Procurement Commission and the Audit Office of Guyana to launch an investigation into the contract.
Citing several individuals who made contact with him concerning alleged wrongdoings at the NDIA, Edghill has charged that all is not well at that entity. He also pointed out that senior NDIA officials were involved.
“One such revelation has to do with the consultant and the contractor, allegedly for works being done at the rehabilitation of the Three Friends Pump Station in Essequibo. It has been brought to our attention that the consultancy firm C.B & Associates Inc., which shares a close relationship with the Deputy Director of NDIA, received a letter of credit of $15 million from Samaroo Investments, the contractor on this project, to secure his bid, and was subsequently awarded the consultancy services for this project,” Edghill related.
“Therefore, a consultant is supervising a contractor on a project the financial security of which is dependent upon that contractor. All of this is known at NDIA, yet nothing has been done to bring an end to this incestuous relationship that exposes the state and taxpayers. This is real Misconduct in Public Office,” Edghill, a former Minister within the Finance Ministry, has declared.