Lowest bidder files ACC complaint after MoWHS tender committee ignores MoF letter to follow tender rules

In what is turning out to be a tale of two ministries having different interpretations of tender rules, the Ministry of Works and Human Settlement (MoWHS) has ignored a letter from the Ministry of Finance (MoF) urging it to follow tender rules in awarding a bid for a multi-million road project.

The letter sent by the Finance Secretary to the MoWHS Secretary on 16th September was based on an appeal from the contractor Shacha Rinchen Dorji, of the Rinson-Jaiprakash Joint Venture to the government.

In his appeal supported by documentary evidence Shacha said that though he was the lowest bidder in the Geserling to Dagapela highway project bidding Nu 334.26 mn he was disqualified on unfair grounds in violation of tender rules and financial norms.

The announcement of the result of the tender was made in August 19th 2014 and it was awarded by early September to another bidder.

The letter from the MoF says that after reviewing the docu-ments provided by the Depart-ment of Roads under MoWHS, if certain tender rules were followed than the government had the potential to save Nu 23.95 mn which was the difference with the next highest bidder who got the con-tract instead.

The contractor frustrated with the lack of response from MoW-HS and non-action on the issue approached the Anti Corruption Commission (ACC) yesterday filing a complaint on the issue.

The contactor said that with the tender results being announced in 19th August 2014 he wrote to the DoR on 20th August asking for clarification on why he had been disqualified though he was the lowest bidder.

The DoR Director Karma Galay wrote back on 21st August saying that he had been disqualified as the Human Resource Form PER-1 had not been submitted and the bio-data submitted for key personnel were not in compliance to their requirements.

The Director in his letter point¬ed out that the contractor also did not mention the amounts in bank reference letter to meet his share of the Nu 19 mn cash capacity and also the 40 percent of the concur-rent works committed.

The contractor wrote back on 21st August explaining that the Form PER- 1 was not filled as per specification as there was space only for 9 technical people which the project required but the company had submitted the names of 27 qualified technical people well above the requirements.

“These people were in fact more than qualified and in addition to meeting all the minimum qualifi-cations of road building they even had experience of much higher caliber works,” said Shacha.

The contractor showed the re-porter a list of 27 CVs of engineers and road professionals which had been submitted to the tender committee with most of them meeting the required road construction project experience.

He said that even if the tender committee had an issue with the way the form was filled, under tender rules the tender committee should have communicated to him and asked him to rectify it. He alleged that this was never done in violation of tender rules and with the purpose of disqualifying him.

With regard to the amount not being mentioned in the letter of credit the contractor said that following Financial Institutions Association of Bhutan (FIAB) circular on 14th March 2014 and a July 2014 Ministry of Finance circular, banks were not allowed to mention the amount but instead issue a standard format to reduce fake certificates and solve solvency is-sues.

This he said was backed by letters from FIAB President Kipchu Tshering to all the banks and the MoF also including the Finance Minister’s letter asking such standardized certificates to be accept-ed. There was also a letter from the BDBL CEO to MoWHS saying that this was a standard letter of credit which is genuine and must be accepted.

Here too the contractor said that in violation of tender rules the tender committee did not inform him of their requirement to put in the specific amount. He said that even though his bank certificates were valid the tender committee could have still let him know of their own preferences as per the tender rules.

Here the letter of the Finance Secretary assumes importance as the MoF is the main agency that not only draws up tender rules but also interprets them in case of con-fusion.

The MoF letter points our various clauses of tender rules or Instruction to Bidders (ITB) that should have been considered by MoWHS to inform the bidder to correct any issues.

The MoF letter quoting section 30.2 says, “Provided a bid is substantially responsive, the employer may request the bidder to submit the necessary information or documentation, within a reasonable period of time, to rectify non-material conformities in the bid related to documentation requirements.”

The letter quotes another sec-tion 27.1 which says, “To assist in the examination evaluation and comparison of bids, and qualification of bidders, the employer may, at its discretion, ask, any bidder for a clarification of its bid. The employers request for clarification and response shall be in writing.”

The letter then quotes section 30.1 which says that, “Provided that the bid is substantially re-sponsive, the employer may waive any nonconformities in the bid.”

The MoF letter also quotes section 30.3 which says, “Provided that a bid is substantially responsive, the employer shall rectify quantifiable nonconformities re-lated to the bid price.”

The MoF letter says, “As per-mitted by the above provisions in the ITB, the procuring agency has the scope to seek clarification and waive any nonconformities provided the bid is substantially responsive. Since the Rinson Jaiprakash Joint Venture’s bid was responsive, the MoWHS had the option to resort to the above cited provisions under ITB before award of the work.”

The letter says, “Clarifications on the non conformities and omissions had the potential to save Nu 23.95 mn for the government.”

The letter also says that though the Finance Minister on 26th Au-gust had written to the MoWHS Minister to consider the credit fa¬cility of Rinson Jaiprakash Joint Venture this was not done at all.

The letter concludes saying, “In light of the above, the MoWHS may consider exercising the provisions of the ITB and other relevant provisions of the bid documents in order to derive cost effectiveness, fairness and transparency in the award of works.”

The MoWHS tender committee has, however, chosen not to honor the MoF letter.

The MoWHS Minister Lyonpo Dorji Choden said that she was not aware of the full details of the is-sue as she was not in the Ministerial Level tender committee which she said is headed by the Secretary and includes the Director of Roads. She said that based on the complaint of the contractor she had only administratively looked into the issue to see that there is no fraud.

The Secretary Dasho Dr. So-nam Tenzin declined to speak to the paper. The Road Department also did not comment on the issue despite being contacted.

The contractor said that he had no option but to approach the ACC as tender rules had not been fol-lowed and it now really appeared that one country had two laws for different people.

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