Mon | Nov 30, 2020

Opposition warns of monopoly in fire truck procurement

Published:Tuesday | November 17, 2020 | 10:47 PM
Robinson ... Jamaica could save $1.3 billion if the Jamaica Fire Brigade had used Ian K Agency

Romario Scott/Gleaner Writer

Opposition member Julian Robinson has warned of a possible monopoly being created in the supply of fire trucks to Jamaica.

However, Local Government and Rural Development Minister Desmond McKenzie has defended the Jamaica Fire Brigade (JFB) in the procurement of 30 Rosenbauer fire trucks.
McKenzie told the House of Representatives on Tuesday that the contract sum was 
US$23,717,197.50 inclusive of spare parts and taxes at a price of $790,573.25 per unit.

The purchase is made through National Safety Limited, the local dealer for Rosenbauer America.
The minister admitted that direct contracting was used to procure the fire trucks, explaining that over the past 13 years, the fire brigade has used competitive bidding for the provisions of fire trucks.
“On each of these occasions, National Safety Limited has won the bid with the trucks being provided by using Rosenbauer America,” said McKenzie before mentioning that of the 39 trucks in the brigade's current fleet, 37 were bought from Rosenbauer America.
The minister was responding to questions asked by Robinson following a complaint from the principals of Ian K Agency, a local representative for Magirus, a 156-year-old fire equipment company based in Germany which felt that it had been cheated out of the procurement process. 
McKenzie said the procurement of the 30 trucks would serve to standardise the fleet and would lead to a reduction in the maintenance cost of spare parts while allowing for bulk buying to save money.


However, he denied that the JBF had been in negotiation with Ian K Agency.
In fact, McKenzie disclosed that Ian K had refused to participate in a competitive tender process.
He said there was an unsolicited proposal for 35 fire trucks, two wreckers, two water tankers and other firefighting equipment mere weeks after Ian K refused to participate in a competitive tender. 
That proposed contract sum was €14.43.51 million, a much lower sum than the amount National Safety Limited wanted for the 30 units . 
Robinson insisted that Jamaica could save $1.3 billion if the JFB had used Ian K. 
“I have seen the justification about standardisation and potential savings but there must be some cost-benefit analysis done as to whether that justifies going this direct contracting route,” Robinson insisted. 
McKenzie said the proposed financing arrangement also included a sovereign guarantee from the Government of Jamaica. 
“This guarantee is not in keeping with the fiscal rules of the Government of Jamaica,” McKenzie said as he answered queries.  
Further, McKenzie contended that the German units were off the shelf and had not be optimised for Jamaica and its unique geographical needs.
The minister disclosed that a team of three from JFB travelled to Germany to get a better understanding of the units but said the brigade was clear that “this undertaking should not be in anyway construed as a commitment to do business with that entity”.
Still, the recommendation from the team was that Ian K could be considered for future buys. 
The group, however, warned that there was likely to be a monopoly in the servicing and procurement of parts for the units.
Robinson had monopoly concerns of his own.  
“To continuously use, based on the rationale of direct contracting, in essence guarantees a single provider contract in perpetuity. The question must be asked if that provides the greatest value for money for tax payers,” Robinson said.

He underscored that the ministry’s policy was not standardised because the National Solid Waste Management Authority recently acquired vehicles from new suppliers.  

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