Ombudsman Gwendolien Mossel
PHILIPSBURG--Ombudsman Gwendolien Mossel recently concluded an investigation into the tendering and awarding process for solid waste collection 2021-2026.
After providing a preliminary report on April 11, the final report was submitted to Minister of Public Housing, Spatial Planning, Environment and Infrastructure VROMI Egbert Doran on Monday, June 27.
The Ombudsman concludes, based on the findings, that the tendering and awarding process was “neither fair nor sufficiently transparent.”
“The application of certain provisions in the terms of reference, particularly the requirement of the original business licence based on the scope of the work tendered, and the pricing component disproportionally affected some contractors, while at the same time advantaged others,” the Ombudsman said.
The end result is that the bidding process was mismanaged whereby some contractors were, more than six months after the start of the contracts, unable to live up to the requirements in the terms of reference/contract, resulting in poor execution of the work.
Shortly after the 2021-2026 awarding process, complaints against the VROMI Minister were filed with the Ombudsman by multiple bidders who participated in the tender and expressed concerns regarding the credibility, reliability and transparency of the process.
Considering the complaints/concerns received, and the importance of transparency of procurement procedures and policies of government, the Ombudsman decided to conduct a systemic investigation in the general interest of the public.
The main question the Ombudsman sought to answer with this investigation was whether the tendering and awarding process, as well as the procedures and policies followed by the evaluation committee, were fair and transparent.
“The preparations for the tender process for the solid waste collection did not start in a timely manner,” the Ombudsman said. “This perhaps contributed to the deficient quality of the terms of reference. In this regard, the adage ‘haste makes waste’ rings true.
“The Department of Infrastructure Management acknowledged that they were under enormous pressure to complete the tender on time. That resulted in the approval of insufficiently-vetted terms of reference and quickly putting an evaluation committee together.
“The committee was instantly met with challenges in terms of the interpretation and execution of certain critical provisions in the terms of reference, which led to arbitrary decision-making, infighting and ultimately resignations, whereby four of the seven committee members distanced themselves from the results of the tender.”
According to the Ombudsman, Doran refused to provide critical information such as signed individual evaluation sheets for the completeness of tender documents and signed internal findings reports. Therefore, the Ombudsman was unable to make a complete assessment and determination regarding the transparency of the tendering and awarding process, which led the Ombudsman to the conclusion that the process was not sufficiently transparent.
“As contractors could not compare the final results of their respective bids with their competitors, due to the ministry’s refusal to provide an evaluation report when queried, the Ombudsman, therefore, concludes that, based on fundamental procurement principles, the procedures and policies followed by the evaluation committee were also not sufficiently transparent.”
Bottlenecks and challenges
Based on the investigation, the Ombudsman has identified bottlenecks and challenges in the preparation of the terms of reference, the evaluation and selection, as well as the post-awarding phase of the procurement process.
There is no comprehensive tender procurement policy, the Ombudsman said. VROMI has recently published a tender procurement policy, but this newly established policy can only be considered as a modest beginning and does not fulfil the obligation of government pursuant to Article 47, Paragraph 6 of the National Accountability Ordinance, which requires government to establish, by national decree containing general measures, further rules regarding the way in which a tender is organised and executed.
The terms of reference had many deficiencies, the Ombudsman found. “Many topics were not properly defined or were open to multiple interpretations. As an important document on which the bidders were to make and prepare extensive and clear bids, the terms of reference itself lacked details. Some items lacked – clear – definitions. Other critical items – for example, the required documentation – also lacked clear explanation, leaving too much space for subjective interpretation.”
Despite having been vetted with the ministry, legal experts and the Council of Ministers, the terms of reference leave much area for improvement, the Ombudsman concluded. “This was largely acknowledged by the evaluation committee and the management of the ministry. Time constraints were also mentioned as a contributing factor to the discrepancies.”
Although the intention and objective of the requirement of having a business licence based on the scope of work to be tendered was positive, the way in which it was applied was arbitrary and unreasonable, and consequently disproportionately affected some contractors. For starters, the new requirement was not communicated properly.
The investigation has revealed that what was recognised and accepted as “a bank statement indicating the financial capacity of the company” was not consistent.
“Although many companies submitted a bank letter describing their relationship with their bank, including the existence and extent of credit facilities, others submitted a bank statement simply listing their current account balances, which is only a snapshot of a company’s finances at a specific point in time,” said the Ombudsman.
The minister established in the new policy that the Evaluation Committee should not consist of members of the same department. The fact that cabinet members were part of the Evaluation Committee was identified as an impediment by a majority of the department during the hearings conducted by the Ombudsman. “This should be reconsidered moving forward,” the Ombudsman said.
The chosen method for the scoring of pricing was considered inadequate, and should be thoroughly reviewed. The investigation has revealed that only 20% of qualified contractors received points for pricing. “This is alarming. Considering that the determination of the government price is in itself a challenge, due to the lack of data and alleged expertise, this subject matter must be separately tackled as well.”
According to the Ombudsman, serious consideration should be given to limiting the number of parcels per contractor or having a real verification of the company’s capacity to execute the works. “It is currently being proven that a contractor handling more than two parcels is quite a challenge,” said Mossel.
The participation of sole proprietorships in the solid waste collection tenders, considering the risk this poses for government, should be reconsidered as well, she said. The present garbage contracts range in value from NAf. 4 million to NAf. 10 million for the five-year term. “Exposing government to such considerable risk cannot be considered good governance.”
Certain provisions in the terms of reference are being ignored by contractors and not being enforced by the department, partly due to understaffing. These include, but are not limited to, the 10-year maximum age of trucks, the requirement of having two trucks per parcel and the prohibition of subcontracting.
“A perhaps less significant requirement that is being flouted, but equally important, is the obligation of the contractor to provide satisfactory uniforms, including a hard hat, safety glasses, safety vests and safety shoes to personnel.
No comprehensive plan
A comprehensive vision for waste management does not exist, the Ombudsman said.
“The management of waste is primarily the responsibility of government, which regulates and manages waste in accordance with their respective legislation, policies, and programmes. Much of this responsibility is presently passed on to the contractor with little to no responsibility for the community.
“Oftentimes (some) members of the public refuse to follow established, common-sense requirements, much to the chagrin of the contractors. For example, concrete rubble, cooking-gas cylinders and hazardous chemicals are callously placed amongst household waste for collection.
“These frequent infractions by the public usually go unpunished. However, inspectors immediately target the haulers with warnings and penalties. This creates an imbalance in duties and hinders realisation of an effective waste-management plan.”
There is limited transparency in the post-awarding process, particularly for unsuccessful contractors. Although all contractors received an official overview of the awarded points per parcel, further clarification on the awarded points was difficult to receive and requests to receive an evaluation report were denied, which is in contravention of fundamental procurement principles.
Based on the findings in the report, the Ombudsman made the following recommendations: A comprehensive tender procurement policy should be created and a national decree containing general measures enacted. The terms of reference should be timely and accurately prepared. Staff at the Department of Infrastructure must be increased and provided with training. A public tender evaluation report must be introduced and a comprehensive waste-management plan created.
The final report is available via download on the Ombudsman’s website
www.ombudsmansxm.com under the “reports and articles” tab. A short animated video has been produced to complement the report. The film can be viewed on the Bureau Ombudsman Sint Maarten Facebook page and YouTube channel.