A builder chosen for a multi-million dollar Government contract is a major shareholder in the company which made the selection.

Dennis Correia has 30 percent of the shares of Bermuda Emissions Control which picked his firm Correia Construction to build three emissions testing centres. And The Royal Gazette can also reveal that the bidding process was not put out to open tender by Bermuda Emissions Control Limited.

It's understood the deal is highly unusual with Government contracts of more than $50,000 normally being subject to competitive tendering.

However Mr. Correia defended the decision and said the deal had been scrutinised by two private firms as well as by Government.

Mr. Correia, whose wife Jane is a Progressive Labour Party candidate in the coming election, said it was not a sweetheart deal based on a friendship with Premier and Transport Minister Ewart Brown but was the culmination of a plan started under the United Bermuda Party.

Bermuda Emissions Control was formed by Donal Smith and Joel Maderios in 1996 and Mr. Correia bought into the firm in 2003.

Cabinet Secretary Marc Telemaque said the contract was worth $8.6 million and had been delayed "owing to the intense scrutiny by technical officers in the circumstances."

Work began in January for the satellite testing stations in Rockaway and Southside and in the middle of last month for the main site at the Transport Control Department's North Street HQ. Mr. Telemaque added: "This was a sole source contract based on the experience of the contractor in the building method and specialized form of construction and equipment installation and as such no other bids were sought."

Asked about the potential conflict of interest he said: "The way in which specialised contracts work – particularly for the provision of a significant technological components – is that you would engage a company like Bermuda Emissions Control (BEC) who bring to the table an entire package – that's not unusual. "And part of that, if it involves construction or the importation of technology, would be the responsibility of the main contractor. That's not unusual at all."

Asked about what controls were in place to stop Correia naming their own price for the work Mr. Telemaque said all contracts were vetted, costed out and signed off by the Ministry of Works and Engineering.

However Works and Engineering said they were not involved. Mr. Telemaque then said Transport was the contracting department and any such a job would have been approved by Cabinet. And he said the taxpayer would not risk losing out because the budget would not be exceeded.

Mr. Smith said he and partner Joel Maderios had wanted to bring in another partner with an understanding of warehouse style construction and had chosen Mr. Correia as the best in the field. "Making him a director was crucial to this type of work. It was always a decision of the Government to award the contract to a single contractor."

Mr. Correia said an understanding that BEC would build and manage the facility had dated back to 1996. "We were working with TCD and the directors of the day — once the PLP came into power they continued the process of research and development. There was a signed consultancy agreement back in 1996/1997 — it was ongoing for us to develop the entire emissions and testing procedure."

Mr. Correia said he stepped back when TCD asked for prices on buildings so BEC hired two project management companies -Trent and Entech – to put each a price on the building and see how it compared with Correia's.

"Everything was done through the Accountant General and the Attorney General," he said.

Asked why Works and Engineering weren't involved in overseeing the bids Mr. Correia said: "Works and Engineering were not used in this project – it was a direct mandate from the Transport Department."

Mr. Correia said he did not vote on the choice but his other partners in BEC, along with the Department of Transport picked Correia because it was the lowest bid.

A document briefly shown to The Royal Gazette showed Correia offering a bid of up to 17 percent below Entech's estimate for the Rockaway project and up to 31 percent cheaper for the Southside project.

However Trent came in three percent under Correia's price for the Rockaway project. This paper did not see the estimates for the main project in North Street but Mr. Correia said the same pricing's applied.

Correia Construction is putting up the buildings, BEC is providing the equipment and TCD will handle the outfitting of the offices, said Mr. Correia who estimated the satellites would cost around $500,000 while North Street will cost around $3.5 million.

He said: "All the numbers go through the Accountant General's and the contracts go through the Attorney General. So BEC sign an agreement with Correia to build and that's it — it's not an open pocket book.

"Correia doesn't do overruns — that's our reputation — we finish jobs on time and on budget — usually before time. If there are overruns it's because the client requested it. These are very, very simple buildings."

Asked if the arrangement was unusual Mr. Correia said BEC did nothing without approval from either TCD or Works and Engineering. "I don't think the public will have any problem with it — everyone in the construction industry that knows Correia's reputation would not even question that BEC chose Correia to do it."

He said the firm had done warehouses all over Bermuda and the two satellites would be up and running by the end of October and North Street would ready by next July.

"The Premier had nothing to do with any of this. This started under the UBP days — it's just like the fast ferries — the PLP continued the momentum. This started long before I knew the Premier."

And Mr. Smith, who is a cousin of the Premier, said: "When we started this the Premier was in Los Angeles — he hadn't even entered politics. This is 18 years of painstaking research and development."

Mr. Smith, who describes himself as an entrepreneur, said he began researching emissions back in 1989 after noticing tourists choking from vehicle fumes. The pair said the company had poured money into the project — probably up to $600,000 on research and development with countless trips to countries to look at their equipment and emissions standards.

Mr. Corriea said Government in 1996 had hired the company to train TCD examiners to do emissions testing. "We randomly tested 4,000 vehicles at TCD with their examiners."