Controversy as vetted bid loses out on Govt contract

  • <B>AJW Construction Company</B> starts renovation on the old Magistrates&#146; Court building on the corner of Reid and Parliament Street. The awarding of the contract to the company, instead of a previously recommended bid from another company that was $80,000 lower, has sparked controversy.

    AJW Construction Company starts renovation on the old Magistrates’ Court building on the corner of Reid and Parliament Street. The awarding of the contract to the company, instead of a previously recommended bid from another company that was $80,000 lower, has sparked controversy.
    (Photo by David Skinner)

  • <B>A renovation contract</B> for the old Magistrates&#146; Court building has sparked controversy.
Photo David Skinner

    A renovation contract for the old Magistrates’ Court building has sparked controversy. Photo David Skinner
    (Photo by David Skinner)

A Government Minister has pushed through a construction project bid that was 28 percent more than a Civil Service-recommended bid — and after the Minister herself had presented that lower and fully vetted bid to Cabinet, recommending it for approval.

The project that is at the centre of the controversy is the renovation of the old Magistrate’s Court building, which is being converted into an important element of the governing Progressive Labour Party’s employment plan, the One Stop Employment Centre.

Inside sources said in mid-October, about two weeks after she presented the recommended bid, Minister for Economy, Trade and Industry Patrice Minors told Cabinet colleagues that she had rethought the award of the contract because AJW Construction provided better employment opportunities for Bermudians. Andre Famous, the president of the successful company, said yesterday he has 12 Bermudian employees on staff. The unsuccessful bidder, who came in about $80,000 less than AJW Construction, is Home Design and Development Construction (HDDC) Ltd. and also has 12 employees, eight of whom are Bermudian.

In a Government statement released last night, the Ministry advised that the allegation that Minister Minors, ‘changed her mind two weeks later’ following the recommendation of awarding the contract to HDDC is wrong.

A spokesperson said: “To be clear, the Minister did not wait two weeks to act, quite the contrary, she requested an immediate review after she was appraised of the recommendation.”

The statement quotes Minister Minors as saying: “I am committed to putting Bermudians back to work and to supporting those companies in the construction field that employ a full complement of Bermudians. It is my view that when it comes to some of the smaller projects such as the Magistrates’ Court Building that it is imperative that we use the opportunity to ensure that Bermudians are working. By no means does this negate the value or contributions of non-Bermudians but we must ensure that companies with a full Bermudian staff complement are weighted higher in the decision making process.”

It is understood that HDDC Ltd., which has been in business for six years, was recommended at the beginning of October by the Minister to carry out the renovation at the old Magistrate’s Court building. Their bid was $286,997.50, the lowest of the six bids received for the job, and it was the one that scored the highest on a tender evaluation process that helps determine the most responsive bidder by taking into account relevant factors including experience, references and pricing. In this case, the Bermudian employee numbers were also requested. The recommendation to give the contract to HDDC Ltd. was supported by the Procurement Office, Ministry of Finance and the Government Estates Ministry, according to our source.

The awarding of the contract to AJW Construction was announced in the Official Gazette on November 28. The amount of the contract is $365,249 and it was dated October 16. It was described in the notice as “Interior renovations and alterations for relocation of Department of Labour and Training.”

On November 29, a Government spokesperson said: “In response to media queries, the Ministry of Economy, Trade and Industry advised that AJW Construction Ltd. is currently working on the old Magistrates’ Court building as part of the Ministry’s One Stop Career Centre building.

“AJW Construction Ltd. is a graduate of the Bermuda Economic Development Corporation’s (BEDC) Construction Incubator programme. The company is performing all physical works including but not limited to demolition, masonry works to floors and walls, installation of all drywall and other miscellaneous works.”

A search of the share register of AJW Construction showed its director and president is Andre Famous; and the vice president, who is also a director, is Hewitt (Ricky) Caines while a third director is one of Bermuda’s biggest businessmen, Wendell Brown. The complete shareholders list consists of Mr Famous, who has 5,400 shares in the company, while Mr Caines has 1,800. A company called Cahow Ltd holds 4,800 shares.

AJW Construction’s vice president Mr Caines is a cousin of Wendell Brown, said Mr Famous. “Hewitt is a cousin of Wendell Brown’s, and I asked for his assistance when I was setting up the company. He said, “Sure”, and so he became a partner, rather than just give financial help. But Ricky and I handle the construction.” He said they meet with Mr Brown every three months to update him on the activities of the company. “I’m almost certain he doesn’t know anything about this job,” said Mr Famous.

The ultimate award of the contract to AJW Construction is the result of: “Who you know, in Bermuda” said to HDDC Ltd owner Manuel DeCosta when contacted about the contract award. He had spent about 12 hours preparing the bid, but was never informed that he was an unsuccessful bidder. “It would have been nice if someone had called and said that we hadn’t got the job. I saw it in the Bermuda Sun newspaper,” he said. The Bermuda Sun carries the official government notices and is the Official Gazette.

“I know Government is looking for the lowest bid in today’s economy. I can see it going to another bidder if the difference is $10,000 or $20,000, but $80,000 ... I have nothing else to say. The job has been awarded, I just have to move along and hopefully something else will come along.

“Everybody says it’s who you know.”

Mr DeCosta, whose company is also with the BEDC Construction Incubator programme, said he has worked for the Government before, and the jobs he has done include renovations to the LF Wade International Airport fire station. He has also looked after the airport grounds.

Mr Famous said he operates his business in conjunction with the BEDC, and he feels that was helpful to him in winning the contract. He was unaware of the background to his winning the job, but said he felt that his higher bid had succeeded because he has experience in renovation work. “There tends to be unseen things,” he said, and explained it is difficult to know exactly what the scope of the work will be in a renovation until after the demolition has taken place. “Rather than having cost overruns, my price reflects an extensive evaluation of the site, and that is what I came up with. When you are doing a demolition, you don’t know what is behind the walls.”

He said the majority of the bidders who were invited to put in bids were members of the BEDC, and he hopes to go back to them to hire additional workers registered with them, such as a carpenter, later in the job. “I don’t know if that made me favourable as far as the BEDC is concerned,” he said.

His other projects have included a condominium development called West Point at Shelly Bay, which they built for fellow director Wendell Brown. Another AJW job is a women’s rehabilitation facility, a residence which allows women to get back on their feet again while they are recovering from difficulties such as drug addiction.

A Government statement responding to questions raised by this story said: “For the benefit of background the public should be aware of the Request For Proposal (RFP) process.

“There are a number of factors that typically go into awarding a contract, some that are outlined in the RFP; some that are not. There is an evaluation matrix in place and this is used to assist with internal decision making regarding RFPs. This was revised to give additional weight to companies hiring an all Bermudian workforce.

“The public will be aware that the Minister is committed to ensuring that Government contracts are awarded to vendors who hire unemployed Bermudians. The evaluation matrix takes into account the positive aspect that any company bidding on a project has the best interest of Bermudians in mind, by ensuring that their employees are Bermudians.

“Minister Minors said, “We are keen to support those businesses that invest in Bermudians who are in need of job opportunities. More Bermudians employed means more money is spent in our economy and therefore more businesses can survive. Furthermore, this Government has itself demonstrated its commitment in investing in Bermudians and Bermuda owned businesses by developing several programmes specifically for the benefit of companies that have graduated from the Bermuda Economic Development Corporation’s Construction Incubator Programme.

“Specifically, the Seas Song project which saw the renovation the property in Smith’s Parish; the Small Works Project which saw the completion of a number of small works around the Island; the award of the Dame Lois Browne Evans Building Cleaning Contract; the recent award of the painting contract for the airside of the L.F. Wade International Airport and of course the award of the Magistrates’ Court Building contract are just a few.”

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Published Dec 13, 2012 at 8:00 am (Updated Dec 13, 2012 at 9:08 am)

Controversy as vetted bid loses out on Govt contract

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