This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In the Report of the Auditor General for the year 2018 chapter entitled “School Meals Centre at Six Roads, St. Philip”, the Barbados Audit Office raised serious concerns over the failure of a school construction project. By way of background, the Auditor General noted that “in June 2008, approval was granted for a new School Meals Centre (the Centre) to be built at Six Roads, St. Philip for the purpose of providing meals for students at schools in St. Philip, Christ Church, St. John and parts of St. George, as well as catering to emergency situations in the event of a national disaster.” However, as of the date of the report, the project remained stalled and incomplete due to a dispute with the contractor. As the report detailed, the contractor’s performance was initially impeded by payment delays by the government:
A period of seventeen (17) months was given for the completion of the contract. This was extended by ten (10) months and at the end of this period, the project was only sixty-eight percent (68%) completed. The delays resulted from the lack of timely payments to the Contractor who indicated that this hindered the progress of the project; the Contractor’s lack of funds to purchase the kitchen equipment as required by the contract; and slow decision making by the Ministry’s personnel in dealing with issues as they arose.
The Auditor General also noted that the contractor encountered unforeseen site condition issues that led to additional costs being approved outside of appropriate approval protocols:
During excavation, it was discovered that there were two (2) sizeable surface pockets which were not foreseen. The Architect agreed to relocate the water tanks to this area which was deeper. Further exploration of the site unveiled a smaller cavity. In an email dated 13th November 2012, the Contract Administrator indicated to the Project Educator, ETMU, that an unexpected cavity was discovered (in the area where the water tank was being relocated) which would likely result in an increase in the cost of the project. The cost of the additional work for excavation, filling and the repositioning of the water tank came to approximately $0.72 million but no evidence was seen to indicate that this increase in cost was approved by the Permanent Secretary or Cabinet.
The report also noted outstanding issues with the kitchen floor drainage pipes and raised concerns over the new kitchen equipment left half-opened in the original boxes at the construction site as the equipment warranties expired. The Auditor General also noted the government’s failure to obtain proper land use permits for the construction of the adjacent parking lot, which at the time of the report was encumbered by a large, seemingly abandoned boat that, on closer inspection, actually contained an occupant.
Given the ongoing dispute with the contractor over payment and performance issues, the Auditor General noted that the project remained incomplete, and that in the interim, “the School Meals Department will have to continue using the cramped conditions at St. Christopher along with the other Centres to supply meals to the schools throughout the country”. Furthermore, the Auditor General warned that “the Government would have to find another source to provide meals for those displaced if a natural disaster should occur” while “millions of dollars would be sitting idle in a partially completed building which could have been used in a different manner to provide a greater benefit to the Country.”
As this report illustrates, the failure to properly manage procurement projects can have significant impacts on government operations that rely on the proper execution of those projects.
