Waterville Unmasked (4)

…They Did Not Win Contract For 5 Stadia For CAN 2008!
…CTRB’s August 5, 2005 Concurrent Approval Not Award of Contract!

The Enquirer newspaper in its March 16, 2012 edition reported Waterville Holdings Limited, “the company at the centre of the Woyome judgement debt scandal”, as saying that “IT PROTESTED THE CANCELLATION OF THE CONTRACT IT WON, CONTRARY TO CLAIMS BY THE FORMER CHIEF OF STAFF, MR. KWADWO OKYHERE MPIANI, AND OTHER PRO-NEW PATRIOTIC PARTY ELEMENTS THAT IT ACCEPTED IT”.

According to The Enquirer story titled: ‘Waterville Sinks Mpiani, Kufuor… As It Exposes NPP Over Euro 25m Payout… And Absolves NDC Of Blame… Says Kufuor Occasioned Loss”, “Waterville, in dossiers made available through its Managing Director, Mr. Andrea M. Orlandi, to various investigating state agencies, including the Police and the Economic and Organised Crime Office (EOCO), indicated that the company took strong exception to the manner the contract was terminated”.

According to The Enquirer story under reference, “Waterville’s claims against the Kufuor administration started immediately the contract was abrogated in 2006 in letters written by its Laywer, Kwame Tetteh on November 8, 2006, December 4, 2006 and December 20, 2006 respectively”.

The Enquirer also reported that Waterville, has in the course of the investigations being conducted by the State agencies, revealed that “it had earlier through another lawyer, Collin Russel, written to protest the entry of Shanghai Construction Company into the tendering process contrary to the right tender procedure”.

Waterville, according to The Enquirer story, complained that “it was not right for a company that was not part of the tender process to be engaged and awarded contracts”.

Readers will recall that at its March 12, 2012 Press Conference held at the Ghana International Press Centre (GIPC) at Accra, Waterville claimed that “through an open, fair and international bidding process and in compliance with Ghana’s public procurement law”, it (Waterville) “won a contract to construct two (2) new stadia, rehabilitate two (2) more. The construction of a third stadium was added to the scope”.

“In spite of Waterville being given approval for the award of all five (5) stadia, the government decided to award two out of the five stadia already awarded to Waterville to Shanghai Construction (Group) General Corporation. The procurement process for the two (2) stadia awarded to Shanghai Construction (Group) General Corporation was not done in compliance with Ghana’s public procurement law”, Mr. Andrea Orlandi, Managing Director of Waterville articulated at the March 12, 2012 Press Confab.

The New Crusading GUIDE’s Special Investigations Team (SIT)’s comprehensive scrutiny of official records show that at no time during the Kufuor Administration was Waterville AWARDED A CONTRACT for the construction and/or rehabilitation of 5 stadia as claimed by the company at its Press Conference last week.

Apparently, Mr. Orlandi was referring to the August 5, 2005 letter from the Central Tender Review Board (CTRB) signed by Mrs. Effie Simpson-Ekuban, member/secretary of the Board, for Mr. Yaw Osafo Maafo, then Minister of Education & Sports. The letter titled: “REQUEST FOR CENTRAL TENDER REVIEW BOARD APPROVAL FOR THE AWARD OF CONTRACT FOR CAN 2008 STADIA CONTRUCTION AND REHABILITATION”, indicated that the “Central Tender Review Board writes to give concurrent approval for award of the contract to Messrs VAMED Engineering, subject to your submission of the Procurement Plan for MoES including that of LOC (Section 21(1.4) of the Public Procurement Act, 2003 (Act 663)”.

In Mr. Orlandi’s view, the August 5, 2005 letter from the CTRB amounted to an award of contract “to construct two (2) new stadia, rehabilitate two (2) more. The construction of a third stadium was added to the scope”.

Proceeding from that false and uneducated premise, Mr. Orlandi and Waterville concluded that Mr. Osafo Maafo’s August 22, 2005 letter addressed to the Managing Director of Messrs VAMED Engineering GmbH, which informed the latter that “the MOES is unable to continue with the tendering process due to the high financial commitments implied in the submissions, the inconclusive and the non-assuring nature of the financial submissions”, was (is) illegal and a violation of the Public Procurement Act (act 663).

Indeed, Waterville got a Solicitor of the Supreme Court of England and Wales, one Mr. Collin Russel, on August 27, 2005, to write to the Minister of Education & Sports, protesting Osafo Maafo’s ‘truncation’ of the procurement process which had reached the stage of a concurrent approval by the CTRB.

“The approval of the award at that stage, following Government of Ghana approval and request for approval to the Central Tender Review Board, then duly given, established at that point a continuing legally binding obligation on GoG specifically under Section 65 of the Procurement Act, which in turn provides an irrevocable procedure leading to the formalisation of written procurement contract”, asserted Collin Russel.

He continued: “Further in any event, the fact of the case is that the Minister of Education and Sports has no locus or authority to cancel the tendering process and therefore the assertion of such administrative action in that letter is ultra vires and therefore without legal effect either under the Procurement Act or generally at law”.

However, a careful study of the Procurement Law (Act 663) and its Schedule 4 (Standard Tender Documents and Standard Request For Proposals – Section 50 and Section 68) clearly indicates that a concurrent approval from the Central Tender Review Board (CTRB) or any other Review Board does not constitute an award of contract. Review Boards do not award contracts. They review Evaluation Reports to ensure that all steps and procedures used by the Procurement Entity in the tendering process conform to the requirements of the Procurement Act.

The Procurement Entity (in the case of CAN 2008 was the Ministry of Education & Sports), remains responsible for the final award of contract in accordance with the Instructions To Tenderers (ITT) Clause 31.1 of the Standard Tender Document (STD) unless any portion therein is varied by a clause of a Tender Data Sheet (TDS).

The Procurement Entity having received concurrent approval can decide to request the successful Tenderer to re-establish its qualification before a formal award notification provided it does so within 30 days from date of acceptance (Refer to Repeat of Tender Qualification – Section 62(1) of Act 663).

Under Section 29(1) of Act 663, a Procurement Entity may reject a tender, proposal and quotations AT ANYTIME PRIOR TO ACCEPTANCE if the grounds for the rejection are specified in the tender documents or in the request for proposal or quotations.

Section 29(2) states that the grounds for rejection shall be communicated to the Tenderer but justification for the rejection is not required and the Procurement Entity SHALL NOT INCUR LIABILITY TOWARDS THE TENDERER.

More crucially, Section 30(1) of Act 663 which deals with the entry into force of the procurement contract states that in tender proceedings, ACCEPTANCE OF THE TENDER and ENTRY INTO FORCE of the Procurement contract, shall be carried out in accordance with Section 65 of Act 663.

Section 65(1) states that a tender that has been ascertained to be a successful tender in accordance with Act 663 shall be accepted and notice of the tender shall be given within 30 days of the acceptance of the tender to the supplier or contractor submitting the tender.

Section 65(2) states that where the tender documents require the supplier or contractor whose tender has been accepted to sign a written procurement contract conforming to the tender, the procurement entity and the supplier shall sign the procurement contract within 30 days after the notice of award referred to in subsection (i) of Section 65 of Act 663.

It is obvious that Waterville and its Solicitor, Collin Russel did not have a clear and proper understanding of the Ghanaian Procurement Law and its Schedule 4 Instructions To Tenderers (ITT) inclusive.

Clause 32.1 of the Instructions To Tenderers (ITT) of a Standard Tender Document (STD) clearly establishes the right of the Employer (Ministry of Education & Sports) to accept any tender and to reject any or all tenders. It (Clause 32.1) states that “Notwithstanding Clause 31.1, the Employer reserves the right to accept or reject any tender and to cancel the tender process and reject all tenders at anytime prior to the award of contract, without thereby incurring any liability to the affected tenderer or tenderers or any obligation to inform the affected tenderer or tenderers of the grounds for the employer’s action”.

“Until a contract is formed, when acceptance is communicated by notification of award, the document which regulates the conduct of a Tender Process prior to contract award is the Tender Document. A Standard Tender Document (STD) is part and parcel of the Procurement Act and that all clauses contained therein have the same effect in law as any other provision of the Act. A list of STDs for the conduct of Tenders by procurement entities is captured under Schedule 4 of Act 663, the Public Procurement Act”, explained a Procurement Expert in a chat with this paper.

The Procurement Expert who spoke to us on condition of strict anonymity, advised that both parties (Waterville and Government of Ghana) “must go back to the relevant clauses of the ITT and TDS clauses in the Tender Document to establish the rights of the Purchaser to reject a tender”.

He clarified that the concurrent approval by the Central Tender Review Board (CTRB) on August 5, 2005 did not trigger into effect Section 65(4) of the Procurement Act which states that “Between the time when the notice is dispatched to the supplier or contractor and the entry into force of the procurement contract, neither the procurement entity nor the contractor shall take any action that interferes with the entry into force of the procurement contract or with its performance”.

He underscored that a notice is said to be duly dispatched “WHEN IT IS PROPERLY ADDRESSED OR OTHERWISE DIRECTED AND TRANSMITTED TO THE SUPPLIER OR CONTRACTOR OR CONVEYED TO AN APPROPRIATE AUTHORITY FOR TRANSMISSION TO THE SUPPLIER OR CONTRACTOR IN A MANNER AUTHORISED BY SECTION 26”.

Section 26 of Act 633 clearly states that “COMMUNICATION BETWEEN PROCUREMENT ENTITIES AND TENDERERS SHALL BE IN WRITING AND COMMUNICATIONS IN ANY FORM SHALL BE REFERRED TO AND CONFIRMED IN WRITING”.

“Can Waterville or Vamed or M-Pawapak provide documentary evidence of any such communication of formal notification of award of contract subsequent to the concurrent approval by the CTRB? Can they?”, queried the Procurement Expert.

The Procurement Expert expressed shock that former Attorney General, Mrs. Betty Mould-Iddrisu considered the August 5, 2005 CTRB concurrent approval as “forming the basis of a binding agreement between Vamed and the Government of Ghana” (per an April 29, 2010 letter from Betty Mould-Iddrisu to Finance Minister, Kwabena Duffour) and on that legally flawed basis, proceeded to conclude that “the process having been terminated wrongfully by the Government, the claimants (Woyome & Austro-Invest) were entitled to compensation for services rendered”. Note that Waterville was not being referred to in this context!

The Procurement Expert said, having studied the relevant documents available to him, it is crystal clear that Waterville had misinterpretated the Ghanaian procurement law to suit its selfish interest, and advised it (Waterville) to endeavour to get a better understanding of the provisions of the law.

He was however shocked that former Attorney-General, Betty Mould-Iddrisu and officials at the Attorney-General’s Department also appeared not to have a proper and firm knowledge of the Procurement Laws of the Country and thus ended up conceding that there had been an illegal and/or wrongful termination of Waterville contracts in 2005 and 2006; a posture which facilitated both Waterville’s dubious €25m and Woyome/Austro-Invest’s GH¢51.2 claims on the Government of Ghana.

He hoped the Police CID and EOCO will not display the same level of ignorance or ineptitude or both in the discharge of their responsibilities in the on-going investigations.

“I sincerely hope they (Police & EOCO) will consult the Public Procurement Board and other independent procurement experts as they interrogate Waterville’s claim of an illegal abrogation of an alleged contract for 5 stadia as well as the April 26, 2006 Contracts before arriving at any definite conclusions. This is necessary in order to avoid the unpardonable omissions of Betty Mould-Iddrisu and company”, emphasized the Procurement Expert.

Please stay tuned for an analysis of why Waterville’s claim that the ‘Shanghai contracts’ were not in compliance with Ghana’s Procurement Law, is patently false and unsustainable.