OCG pushes for power to monitor subcontractors

Avia Collinder, Staff Reporter

The Office of the Contractor General (OCG) said it has continued to lobby the Government to allow it to monitor the selection and works of subcontractors as a strategy for reducing cost overruns on government-commissioned projects.

In its 26th annual report, the OCG said that of 198 government bodies surveyed, 113 reported no cost overruns or contract variation, but the remainder were affected. It said that infrastructural works, "unless awarded according to the level of competence, will ultimately cost the people of Jamaica more than the agreed amount, as the likelihood for remedial work to correct any defects identified will be greater in the long run".

Billion-dollar overruns

From information obtained in a survey among government bodies pursued in 2013, the OCG determined that for the reporting period January to December 2012, contracts valued at J$61.6 billion attracted overruns and contract variations ranging from to J$601.5 million to J$1.11 billion for goods, services and works contracts combined, the report noted.

"Engaging a subcontractor that has not been subject to the necessary and thorough due diligence conducted by the NCC (National Contracts Commission), prior to approving their ability to provide the service at the required level, is at best risky and may be more costly in the long run," the OCG report said.

"Without the subcontractors being duly registered with the NCC, thus ascertaining their level of competence, availability of resources - human and capital - and current workload, there is no guarantee that the works performed will be in accordance with the desired end result," it added.

The OCG is currently not required to review contracts given to subcontractors.

However, the agency notes that it has sought to engage the Government and Parliament to make the necessary changes for it to undertake the monitoring of sub-contractors, as well as monitoring of the works to be carried out by them.

"The OCG has been strident in its efforts to get the powers that be to consider implementing a procedure whereby only contractors registered with the NCC, and, therefore, qualified to perform work in the respective categories and at the required levels, would be considered for engagement on major projects as subcontractors," it said.

Would benefit contractors

It added that a system which was better regulated would redound to the benefit of the contractors themselves.

"The OCG has noted with keen interest, the occasional calls for its office to intervene where sub-contractors are faced with challenges in relation to non-payment of monies for works conducted. Until the necessary legislation is passed, however, the OCG is not empowered to take any action in relation to subcontractors, as only the engagement of the main contractor falls within the ambit of the OCG's jurisdiction," the report said.

avia.collinder@gleanerjm.com