Schools tender process defended

The Central Tenders Committee unanimously approved the award of the contracts for two of the three new planned high schools to Tom Jones International, members of the Finance Committee heard last week.

‘We thought [Tom Jones’ tenders] provides the best value for this country,’ said CTC Chairman Terrence Outar.

Leader of the Opposition McKeeva Bush questioned whether the bidding process was fair because key criteria were changed after the tender documents went out.

In particular, when the tender documents went out late last year, one of the stipulations for the schools project was that the building had to be completed in time for the beginning of the school year in September 2009. After the tendering closed and the CTC awarded Tom Jones International the contract, the deadline for completion was extended to September 2010.

Mr. Bush suggested that had all contractors been aware of the extended deadline for completion, it could have made a difference in the bids received.

In the end, only Tom Jones International and McAlpine Ltd. bid on the John Gray High School in George Town and the Clifton Hunter High School at Frank Sound, while those two companies and Hadsphaltic Ltd. bid on the Beulah Smith High School in West Bay.

Mr. Outar admitted it was possible for there to have been a difference in the bids received had all contractors known about extended deadline, but he did not think it would have.

Mr. Outar said it appeared Hadsphaltic did not want to bid on John Gray and Clifton Hunter schools, and that from the very beginning it wanted to focus on the Beulah Smith school in West Bay.

In relation to Arch and Godfrey, Mr. Outar cited another reason why the CTC did not think it necessary to re-tender the schools after the change in time criteria.

‘The CTC was informed by the technical people of the Ministry [of Education] that Arch and Godfrey did not have the technical capacity to undertake a project of this nature,’ he said.

Mr. Bush pushed the point that the time stipulation was a key element of the tender and Mr. Outar agreed with that.

‘The only way I see out of this was to re-tender, but to what results?’ he said, noting that there is a very limited pool of contractors capable of building highly sophisticated projects like the new schools without outside help.

‘Let me say this,’ Mr. Outar continued. ‘When you send out criteria, it’s not a good idea to change it, but we had a situation [with a delay in the negotiating process].’

Faced with the prospects of delaying the process even further, and given the limited number of additional contractors that could have put in other bids, Mr. Outar said the process was fair.

Minister of Education Alden McLaughlin said there were only four construction companies on the island that were realistically capable of building projects the size of the high schools. He said the companies were Hadsphaltic, Arch and Godfrey, McAlpine and Tom Jones International.

‘The only one that wasn’t involved [in the tender process], who chose not to bid, is Arch and Godfrey,’ Mr. McLaughlin said. ‘This much I know; the principle reason Arch and Godfrey didn’t engage [in the tender process] was that they wanted a fluctuation clause in the contract.’

A fluctuation clause allows contractors to adjust fixed-price bids to allow for significant changes in the price of building materials during the course of construction. Mr. McLaughlin said the government would not agree to a fluctuation clause because there would be no way of knowing the final cost of the project if they did.

When contacted, Arch and Godfrey principal Heber Arch said it was ‘absolutely nonsense’ to say his company did not have the technical abilities to construct the schools.

‘Anything Tom Jones can do, Arch and Godfrey can do,’ he said. ‘There is no reason we couldn’t do the schools.’

Mr. Arch said the reasons his company did not put in a bid were the lack of a fluctuation clause and the time stipulated for completion, which he felt his company could not meet.

‘If [the tender] had been for 2010 and there had been a fluctuation clause, we would have bid,’ he said.

During Finance Committee, Mr. McLaughlin also addressed the large difference in bids from Tom Jones and McAlpine, particularly with respect to John Gray, where the two bids were some $28 million apart.

‘I’m not going to apologise for getting the country a good deal,’ he said, acknowledging, however, that he has heard the concerns of people in the construction industry.

‘I’ve had subcontractors come to my house because they say government is not paying enough [for the John Gray contract] and they don’t know how they can bid on the job because their bids will have to be very competitive.’

Mr. McLaughlin admitted that the bids on the schools ‘significantly exceeded’ the pre-tender estimates for the projects. Through a value engineering exercise – which is a way of cutting certain aspects of the project to save money – and through negotiations, government was able to reduce the Tom Jones bid by $4.2 million on John Gray and $6.2 million on Clifton Hunter, Mr. McLaughlin said.

The final contracts on the two schools were signed last week for $59.9 million with respect to John Gray and $56.7 with respect to Clifton Hunter.

Mr. Bush said it was good if Mr. McLaughlin really got a good deal on the schools, but the process needed to be fair.

Mr. McLaughlin maintained the process was not unfair to those who did not put in a bid.

‘If you don’t buy a ticket, you can’t win the lottery,’ he said.

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