Last month, Cabinet decided to waive the competitive tender process for the purchase of a control panel box for the Pockwood Pond incinerator, which hasn’t been operational since a fire in November.
The choice for the $161,300 contract? Consutech Systems LLC, a United States-based firm with a multi-company history that reportedly involves emissions violations, part malfunctions, delivery delays and bankruptcy.
Cabinet members decided to skip the regulated bidding process because they claimed that Consutech — which previously manufactured the Pockwood Pond incinerator — is the only manufacturer of the needed part, according to a meeting summary provided by the Cabinet Office.
They also argued that the procurement of such a device would speed up repairs on the broken incinerator.
The waiver comes despite past arguments made by Premier Andrew Fahie, who spent several years in the opposition fiercely criticising the National Democratic Party government’s regular circumvention of the procurement process.
Why tender?
Such processes are in place to help government officials get the best value for the public’s money. In theory, a bidding system gives financial administrators an opportunity to investigate a company’s actual capacity to complete a project, as well as determining whether its bid is priced competitively.
If, for example, a tender process had been utilised for the control panel box contract, government due-diligence officials may have weighed the fact that Consutech’s predecessor company, Consumat Systems Inc., declared bankruptcy in the 1990s following lawsuits alleging that at least one of its incinerators had serious design flaws and violated US emissions standards.
They also might have examined and evaluated public business entity documents from the US Securities and Exchange Commission, which state that Consumat began targeting international markets for future projects after its crippling financial issues stateside.
Instead, Consutech was apparently awarded the control box agreement without such tightly regulated evaluation of potential competition. And Cabinet’s decision came despite the company’s previous history in the territory, which is rife with delayed — and sometimes nonexistent — results.
Consutech history
In 2004, government signed a $4.5 million contract for a new incinerator, and officials said the facility would likely be up and running within 15 months. About five years later, the Consutech-manufactured incinerator was installed in Pockwood Pond, though it didn’t come online until 2011.
The new system did not, however, have a pollution-control scrubber, a device designed to clean emissions of chemicals including dioxins, a type of highly toxic pollutant that can cause reproductive and developmental problems.
Eight years later, the scrubber still has not come, though government officials have given a wide range of reasons for the delay.
In 2011, for instance, they cited “ongoing land negotiations,” and in 2016 they said government had been busy implementing the new National Health Insurance programme.
In 2015, government officials said, they signed a roughly $1 million contract with Consutech to manufacture the scrubber.
Four years later — though officials said government has already sent some $500,000 to Consutech in the form of a deposit and other payments — the device has not arrived, and no one has provided a timeline for when it will be installed.
Petrona Davies, the permanent secretary in the Ministry of Health and Social Development, explained last June that the delay was not on government’s end, but that Consutech had encountered obstacles in the manufacturing process. Some of the vendors the firm typically worked with had gone out of business, and the company had to find new ones, she said.
“So it has created some challenges,” she explained. “But they claim to have overcome those challenges.”
A few months after that comment, Ms. Davies publicly addressed the lack of a scrubber during a September community meeting in West End, after frustrated residents expressed concerns about emissions from the incinerator.
“It’s taken a lot longer than any of us expected,” Ms. Davies admitted, citing the manufacturing issues from Consutech. “It’s frustrating and it’s embarrassing.”
Past flops
This isn’t the first time government has waived the tender process: Cabinet has often chosen to bypass procurement regulations or guidelines for past agreements, several of which have failed to yield the desired results.
In 2015, for example, the NDP government signed a $7.2 million contract with BVI Airways, which promised to use “commercially reasonable efforts” to launch direct flights between Beef Island and Miami by Oct. 31, 2016.
The agreement came de- spite the fact that three of BVIA’s executives previously worked with a New York-based airline called Baltia, which never operated a commercial flight in 27 years of existence even though it allegedly raised millions from investors.
This information was public and available online, though government officials insisted — despite the lack of a tender process — that they conducted adequate due-diligence on BVI Airways before entering into the agreement.
Yet the company — which leased two jets, claimed to hire nearly 40 employees, and released numerous statements promising flights would begin at various times — never operated a commercial flight to Miami, and former Premier Dr. Orlando Smith acknowledged in January that it had “failed to deliver” a return on government’s investment.
Another example came in late 2017, shortly after Hurricane Irma left masses of debris strewn across the territory. Government — without a competitive bidding process — selected the unregistered company Kausina VI to collect bulky waste and debris from around Tortola, then bring metal and recyclables to the post-Irma Coxheath dumpsite for processing and eventual export.
This choice came despite the public information — which was also available online — that Kausina VI founder Walter Parker had been sued by a disgruntled former investor and had an outstanding court order to pay some $500,000.
About nine months later, the Recovery and Development Agency began to award a slew of separate debris-clearance contracts to different companies, and Department of Waste Management Manager Greg Massicote confirmed that Kausina had never actually exported any debris or recyclables off island.