HDC scraps $3.4b housing procurement programme

AKASH SAMA­ROO

Lead Ed­i­tor - Pol­i­tics

The Hous­ing De­vel­op­ment Cor­po­ra­tion (HDC) has of­fi­cial­ly can­celled the pro­cure­ment pro­ceed­ings for its con­tro­ver­sial $3.4 bil­lion De­sign-Build-Fi­nance (DBF) hous­ing pro­gramme, bring­ing an abrupt end to a process that had been un­der scruti­ny from the Of­fice of Pro­cure­ment Reg­u­la­tion (OPR) since April.

In a no­tice is­sued on June 17, the HDC said that dis­con­tin­u­ing the process is in the "pub­lic in­ter­est."

In the no­tice the HDC in­formed all par­tic­i­pat­ing pro­po­nents that pro­cure­ment pro­ceed­ings for its “Port­fo­lio 1” project had been ter­mi­nat­ed with im­me­di­ate ef­fect un­der Sec­tion 33 of the Pub­lic Pro­cure­ment and Dis­pos­al of Pub­lic Prop­er­ty Act.

Un­der Sec­tion 33 of the Pro­cure­ment Act, a procur­ing en­ti­ty is per­mit­ted to can­cel pro­cure­ment pro­ceed­ings be­fore a con­tract is award­ed, pro­vid­ed the rea­sons for do­ing so are record­ed.

The HDC said those rea­sons have been doc­u­ment­ed in the of­fi­cial pro­cure­ment record but did not dis­close them pub­licly.

The cor­po­ra­tion al­so not­ed that the stand­still pe­ri­od re­quired un­der Sec­tion 35 of the Act had al­ready elapsed and no con­tract had been en­tered in­to with any sup­pli­er or con­trac­tor. Con­se­quent­ly, no No­tice of Ac­cep­tance would be is­sued and no pro­cure­ment con­tracts would arise from the ex­er­cise.

The stand­still pe­ri­od is a manda­to­ry wait­ing pe­ri­od be­tween the an­nounce­ment of in­tend­ed con­tract awards and the for­mal sign­ing of con­tracts. It al­lows un­suc­cess­ful bid­ders an op­por­tu­ni­ty to re­view de­ci­sions, seek clar­i­fi­ca­tion, or chal­lenge the pro­cure­ment process be­fore con­tracts be­come legal­ly bind­ing.

In this case, the HDC had is­sued a No­tice of De­ci­sion to Award on April 8 nam­ing 11 in­tend­ed con­trac­tors for var­i­ous hous­ing pack­ages. The stand­still pe­ri­od ran from April 9 to April 22.

The pro­posed awards in­clud­ed con­tracts val­ued at more than $3 bil­lion col­lec­tive­ly. The largest pack­age, worth just over $1 bil­lion, was ear­marked for Mooti­lal Ramhit & Sons Con­tract­ing Lim­it­ed. Oth­er in­tend­ed re­cip­i­ents in­clud­ed Hakim Ho­sein Con­struc­tion Com­pa­ny Lim­it­ed, Cal­i­for­nia Stuc­co Com­pa­ny Lim­it­ed, CE Man­age­ment and Ser­vices Lim­it­ed, Kei­th's Trans­port and Gen­er­al Con­tract­ing Ser­vice, Trinidad Pro Con­struc­tion Lim­it­ed, Oil­field and In­dus­tri­al Hard­ware Lim­it­ed, Bris­tol Con­struc­tion Com­pa­ny Lim­it­ed and sev­er­al oth­er firms.

Just days af­ter the in­tend­ed awardees were an­nounced, the Of­fice of Pro­cure­ment Reg­u­la­tion on April 17, in­ter­vened and di­rect­ed the HDC to sus­pend the process pend­ing a re­view of the pro­cure­ment pro­ceed­ings.

The reg­u­la­tor's in­ter­ven­tion fol­lowed con­cerns raised by stake­hold­ers over com­pli­ance with pro­cure­ment leg­is­la­tion and the man­ner in which the ex­er­cise had been con­duct­ed.

The is­sue sub­se­quent­ly evolved in­to a ma­jor po­lit­i­cal dis­pute.

Gov­ern­ment of­fi­cials at the time de­fend­ed the pro­cure­ment process and ar­gued that the De­sign-Build-Fi­nance mod­el rep­re­sent­ed an in­no­v­a­tive ap­proach to ac­cel­er­at­ing hous­ing con­struc­tion while lim­it­ing im­me­di­ate pres­sure on the pub­lic purse.

But the Op­po­si­tion Peo­ple’s Na­tion­al Move­ment (PNM) ques­tioned as­pects of the pro­cure­ment ex­er­cise, in­clud­ing the eval­u­a­tion process, trans­paren­cy mea­sures and com­pli­ance with statu­to­ry re­quire­ments.

The Joint Con­sul­ta­tive Coun­cil (JCC), which rep­re­sents sev­er­al or­gan­i­sa­tions with­in the con­struc­tion sec­tor, pub­licly sup­port­ed the OPR's in­ves­ti­ga­tion and dis­closed that con­cerns had been raised re­gard­ing the pro­cure­ment process.

A for­mal com­plaint was al­so lodged with the reg­u­la­tor by at­tor­ney Ran­dall Mitchell on be­half of ac­tivist Wen­dell Ever­s­ley. The com­plaint al­leged that a com­bi­na­tion of fac­tors sur­round­ing the pro­cure­ment process gave rise to con­cerns about trans­paren­cy, fair­ness and in­tegri­ty and war­rant­ed reg­u­la­to­ry scruti­ny.

The con­tro­ver­sy in­ten­si­fied be­cause of the size of the pro­posed awards and the sig­nif­i­cance of the hous­ing pro­gramme, which was in­tend­ed to in­crease the na­tion­al hous­ing stock through part­ner­ships with pri­vate-sec­tor con­trac­tors un­der a de­sign-build-fi­nance arrange­ment.

Op­po­si­tion rep­re­sen­ta­tives de­scribed the pro­posed awards as ev­i­dence of what they called ques­tion­able pro­cure­ment ac­tiv­i­ties. Stu­art Young ac­cused the Gov­ern­ment of op­er­at­ing a “car­tel-style” arrange­ment through se­lec­tive ten­der­ing. Gov­ern­ment of­fi­cials re­peat­ed­ly re­ject­ed those al­le­ga­tions and main­tained that the pro­cure­ment ex­er­cise was be­ing con­duct­ed law­ful­ly.

The OPR is yet to dis­close the out­come of its re­view.

While the HDC has now for­mal­ly ter­mi­nat­ed the pro­cure­ment ex­er­cise, the cor­po­ra­tion has not re­vealed the spe­cif­ic con­sid­er­a­tions that led it to con­clude that can­cel­la­tion was in the pub­lic in­ter­est.

The cor­po­ra­tion has al­so giv­en no in­di­ca­tion whether the project will be re-ten­dered, re­struc­tured or re­placed by an al­ter­na­tive hous­ing pro­gramme.

At­tempts to de­ter­mine why the pro­cure­ment process was can­celled proved un­suc­cess­ful, as calls and mes­sages to HDC Chair­man Feeroz Khan went unan­swered.