Alexander defends HDC contractor selection process despite OPR findings

Ke­jan Haynes

Lead Ed­i­tor – News­gath­er­ing

ke­[email protected]

Min­is­ter in the Min­istry of Hous­ing Phillip Alexan­der has de­fend­ed the Hous­ing De­vel­op­ment Cor­po­ra­tion’s (HDC) se­lec­tion of con­trac­tors for a $3.48 bil­lion hous­ing pro­gramme, ar­gu­ing that the com­pa­nies were drawn from the Of­fice of Pro­cure­ment Reg­u­la­tion’s reg­istry and sub­ject­ed to fur­ther fi­nan­cial checks be­fore con­tracts were signed.

How­ev­er, Alexan­der did not ex­plain why the HDC can­celled the pro­cure­ment pro­gramme on June 17 if, as he main­tained, the con­trac­tor se­lec­tion and due-dili­gence process­es were sound.

His de­fence fol­lows a re­port that an OPR in­quiry found de­fi­cien­cies in sup­pli­er se­lec­tion, bid as­sess­ments, pro­cure­ment over­sight and fi­nanc­ing arrange­ments for 11 pro­posed hous­ing pack­ages.

For­mer hous­ing min­is­ter and cur­rent Trinci­ty/Mal­oney MP Camille Robin­son-Reg­is ref­er­enced the re­port in her bud­get con­tri­bu­tion to the Low­er House on Fri­day, say­ing the $3.48 bil­lion project was pushed for­ward de­spite ques­tions about whether con­trac­tors could se­cure the fi­nanc­ing need­ed to de­liv­er.

Speak­ing dur­ing a vis­it to a hous­ing com­mu­ni­ty in Corinth yes­ter­day, Alexan­der dis­missed claims raised by Robin­son-Reg­is in Par­lia­ment. “All of it is wrong. All of it is hearsay, in­nu­en­do, straw man re­port­ing,” he said.

Alexan­der main­tained that the con­trac­tors were reg­is­tered and pre-qual­i­fied through the OPR sys­tem, while the HDC con­duct­ed ad­di­tion­al due dili­gence be­fore fi­nal­is­ing con­tracts.

How­ev­er, the OPR’s Ju­ly 1 in­quiry re­port raised con­cerns about the pre-qual­i­fi­ca­tion of a sup­pli­er whose com­pa­ny pro­file in­di­cat­ed it was in­sol­vent, in re­ceiver­ship or fac­ing wind­ing-up pro­ceed­ings.

“Notwith­stand­ing this, and the re­quire­ments of Sec­tion 29 (1) (d) of the Act, said com­pa­ny was pre-qual­i­fied and in­clud­ed in the pool of sup­pli­ers in­vit­ed to par­tic­i­pate,” the re­port stat­ed.

Alexan­der yes­ter­day said the HDC ex­am­ined bank­ing and fi­nan­cial in­for­ma­tion be­tween the award of con­tracts and the sign­ing of agree­ments.

He did not ex­plain how those checks ad­dressed the spe­cif­ic con­cerns raised about the sup­pli­er.

The OPR al­so found that some sup­pli­er records lacked au­dit­ed fi­nan­cial state­ments or suf­fi­cient ev­i­dence of tech­ni­cal ca­pa­bil­i­ty for projects val­ued above $100 mil­lion.

Alexan­der de­fend­ed fi­nanc­ing let­ters de­scribed as non-bind­ing, ar­gu­ing that such arrange­ments were nor­mal be­fore bor­row­ers drew down funds.

The OPR found that eight of 10 let­ters from fi­nan­cial in­sti­tu­tions con­tained non-bind­ing dis­claimers, de­spite a re­quire­ment for bid­ders to demon­strate a min­i­mum $100 mil­lion line of cred­it.

“If you go to a bank and qual­i­fy for a hun­dred mil­lion dol­lars in fi­nanc­ing, un­til you ac­tu­al­ly go to draw down the mon­ey it is non-bind­ing,” Alexan­der said.

How­ev­er, the reg­u­la­tor al­so found that the HDC had not es­tab­lished eval­u­a­tion cri­te­ria, a scor­ing method­ol­o­gy or min­i­mum thresh­olds for as­sess­ing fi­nan­cial ca­pac­i­ty.

The OPR fur­ther found that the HDC com­mit­ted to the $3.48 bil­lion pro­gramme with­out guar­an­teed fund­ing, warn­ing of pos­si­ble ad­di­tion­al li­a­bil­i­ties and risks to val­ue for mon­ey.

Alexan­der did not di­rect­ly ad­dress those find­ings. He in­stead blamed in­her­it­ed land own­er­ship prob­lems un­der the pre­vi­ous PNM ad­min­is­tra­tion for dif­fi­cul­ties af­fect­ing hous­ing com­mu­ni­ties, in­clud­ing Lake­wood, Ridge­wood and Lake­view.

“We are clean­ing up all of the mess that we got un­der the PNM,” he said.

The HDC can­celled the pro­cure­ment pro­gramme on June 17.

The OPR called on the cor­po­ra­tion to take cor­rec­tive ac­tion and en­sure fu­ture pro­cure­ment com­plies with the rel­e­vant leg­is­la­tion and reg­u­la­tions.