Fri | Aug 17, 2018

Marlon Morgan | Impose government ban on delinquent contractors

Published:Sunday | December 10, 2017 | 12:00 AM
Marlon Morgan
Kenneth 'Skeng Don' Black
Clement Ebanks, managing director of O’Brien’s International Car Sales & Rentals Ltd.
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Not surprisingly, the botched process of procuring used cars for the police is the subject of considerable debate. The public, as it should be, is incensed that 11 months after the contract was awarded, the supplier has so far delivered a mere 30 of the 200 vehicles.

To add insult to injury, the 66 vehicles said to have been on the wharf since May were still not cleared as at end November because the supplier "inadvertently" failed to reflect GCT, SCT, and other Customs charges in the costing.

From the infamous Sandals Whitehouse project to the more recent fence-construction debacle at National Heroes Park, the taxpayers of Jamaica have endured more than their fair share of project delays, missed deadlines, budget overruns, and outright non-performance. Being fed that unsavoury diet over the years, the people of Jamaica are understandably impatient of cock-ups of this nature and are upset at the nonsensical excuse proffered by the intended suppliers of the used cars for the police.

Based on the national security minister's statement in Parliament on Tuesday, December 5, and the statements in the media by Clement Ebanks, managing director of O'Brien's International Car Sales and Rentals, the procurement process has hit a snag and may be destined for the courts. After all, the Ministry of National Security has called in the performance bond, which effectively means that O'Brien International is not likely to deliver the outstanding 104 vehicles that would have completed the complement of 200 vehicles for which the Government went to market.

The political jousting is on in earnest as the parliamentary Opposition seeks to score political points, conflate issues, and lambaste the policy instead of the supplier's failure to uphold the terms of the contract and deliver the 200 vehicles in a timely fashion. Beyond the political banter and the ensuing public debate, however, the imbroglio surrounding the procurement of used cars for the police must serve as a watershed moment.

We should take the opportunity to signal that as far as non-performance on government projects/contracts is concerned, it will not be business as usual. Stops and starts, missed deadlines, projects overruns and project abandonment are too costly - financially and otherwise. Jamaica can ill-afford delinquent suppliers of goods and services.

 

WORTHWHILE DETERRENT

 

Having considered a number of issues carefully, I believe that the time has come for Government to impose a ban, for a stipulated period, on entities that have not performed on government projects/contracts. An entity that fails to perform in the delivery of goods/services to Government should be banned, for example, for a minimum of 10, 15, or 20 years, depending on how egregious the circumstances are.

This proposed ban would not just affect the entity in question but would extend to its principals, and, possibly, to other entities in which said persons are also principals. This would serve as a worthwhile deterrent to non-performance on government projects on the part of contracted suppliers.

As communicated by the national security minister when he made his statement to Parliament, the contract between his ministry and O'Brien's, as such contracts typically do, contains provisions that protect the interests of the tax-paying public and sets out terms and conditions that obliged the supplier to perform. The point to be noted here is that despite Government's best efforts, it is never possible to totally obviate, or safeguard against, a supplier's failure to perform.

My proposed ban provides no such guarantees either. But to the extent that a supplier would have an interest in participating in future government procurement, what my proposed ban would do is create a regime with such onerous and stringent conditions that non-performance is more seriously discouraged than is the case at present.

In the absence of a move of this nature, taxpayers would be haplessly exposed to delinquent suppliers. Such suppliers could literally walk away, only to move on to the next job. Where is the sense in that? What protection does Government have outside of exit clauses and performance bonds and/or prepayment guarantees?

 

UDC CONTRACT WITH 'SKENG DON'

 

One doesn't have to look very far for a classic and extremely compelling example of the hazard I am proposing to more effectively militate against? In a Tuesday, August 15, 2017 story titled 'Contract cancelled - Frustrated UDC removes Skeng firm from Heroes Park fencing project, The Gleaner reported:

"The Urban Development Corporation (UDC) has terminated the contract it had with Kenneth 'Skeng Don' Black-owned Black Brothers to construct a perimeter fence around National Heroes Park in central Kingston because of non-performance.

"The $152-million project, which started in 2015, is reportedly only 70 per cent complete despite the deadline for completion being twice shifted.

"Further, the Government has forked out approximately $123 million for the work done so far. Minister without portfolio in the Ministry of Economic Growth and Job Creation Horace Chang told The Gleaner yesterday the termination would come after several delays amid concerns over the progress of the work being done.

"There has been serious concerns about the rate of progress on the contract. The termination is not a Cabinet decision. It is an agency decision based on the performance [of the contractor]," Chang stated.

"Speaking at a political meeting in 2015, Daryl Vaz blasted the People's National Party (PNP) for deciding to spend $152 million on the perimeter fence. Then, Vaz urged the PNP to cancel the contract because it had been given to a company owned by Black, a PNP activist."

It is clear, based on the foregoing excerpt from The Gleaner, that a connected individual benefited from a government contract, and, amid his entity's failure to deliver, merely walked away from the project. It was business as usual. But it should not continue. Stiff sanctions should be imposed on such entities and their principals.

Loop News posted a story to its Facebook page on November 26, 2015, headlined 'Skeng Don earned three-quarters of contracts to out Riverton fire', which reported that information from the Office of the Contractor General indicated that Kenneth 'Skeng Don' Black got a $72.5-million contract to transport dirt to put out the fire. The National Solid Waste Management Authority, in March 2015, issued contracts valued at $91.6 million directly related to extinguishing the fire (Loop News 2015).

Since Skeng Don is in the business of transporting dirt to help extinguish fires at the Riverton Dump, it is reasonable to presume that he may be called upon to assist again in this regard and may otherwise be interested in doing future business with the Government. Were a delinquent supplier's ban available to Government and imposed on Skeng Don and his entity, he would have to perish any such thought, for, say, the next 15 years. Wouldn't that go a far way in fixing the business of those who have failed to perform as O'Brien's has done vis-‡-vis the used cars procurement, and Black Brothers Incorporated did vis-‡-vis the National Heroes Park fencing project?

- Marlon Morgan is a communications specialist and consultant in the Ministry of Industry, Commerce, Agriculture& Fisheries.

Email feedback to columns@gleanerjm.com and marlonandremorgan@gmail.com.