Committee advice on no-bid housing contracts withheld
Opposition politician Michael Fahy has accused Zane DeSilva of “hiding behind quangos” after multimillion-dollar, no-bid contracts were awarded to two foreign firms without any oversight from the Office for Project Management and Procurement.
Mr DeSilva, the Minister of Housing and Municipalities, is spearheading the building of more than 900 affordable homes for $418.5 million over the next decade, but has delegated much of the first phase of the public project to the Bermuda Housing Corporation and the Bermuda Land Management Corporation.
Lucrative contracts have been given to Coastal Precast Systems, of Virginia, United States, and Preconco Ltd, of Barbados, without a bidding process. A government spokeswoman said on Tuesday that the publicly funded quangos did not need to get permission from the OPMP to bypass normal procurement rules.
The Department of Internal Audit oversees quangos to ensure they adequately safeguard public funds and comply with financial policies but, unlike the OPMP, its records are exempt from public access to information legislation.
Mr Fahy, the shadow housing minister, said this week that Mr DeSilva had failed to fulfil a promise he made in Parliament on June 26 to share the “rigorous technical and procurement evaluation” conducted by his ministry’s ad hoc affordable housing advisory committee before the contracts were given out.
The housing ministry gave The Royal Gazette a statement of more than 400 words about the AHAC and its mandate but did not share its recommendations and has not responded to a request from the newspaper for them.
Mr Fahy said: “While the One Bermuda Alliance agrees that it is important that homes be built and built quickly, it cannot be at the expense of the sunshine of public scrutiny.
“The minister promised to bring the ‘finite details’ of the ‘rigorous technical and procurement evaluation’ undertaken by the affordable advisory committee.
“The statement given to The Royal Gazette falls woefully short of the ‘finite’ details promised. Instead, the minister is hiding behind the BHC and the BLMC.”
He added: “The minister said in Parliament he could talk for half an hour on the process followed, but his statement takes less than a couple of minutes to read.”
The ministry’s statement named nine companies evaluated by the AHAC, including CPS, Preconco and a Canadian company called Stack Modular, which claims to offer a lower-cost option.
Mr DeSilva told Parliament that information was received from “many hundreds and hundreds, literally” of people and organisations.
Mr Fahy called on the minister to share details of who visited the various firms under consideration and when they did so.
“The minister said hundreds of proposals were received,” he added. “Details are needed, not slick soundbites and hiding behind quangos.
“We have all seen the costs overruns on capital projects overseen by Government and quangos. This is why it important that we know the facts.”
Mr Fahy urged Mr DeSilva to “explain exactly” why the two overseas firms were chosen, noting that the $64 million contract given to CPS meant that the 84 units it was tasked with building in Sandys and St David’s would cost more than $760,000 each.
Mr DeSilva formally appointed the AHAC, chaired by his ministerial special adviser, Hugo Pereira, in March.
The affordable housing advisory committee was formally appointed in March this year, according to the Ministry of Housing and Municipalities.
Its chairman is Hugo Pereira, a board member of the Bermuda Housing Corporation and the president of the Vasco da Gama Club, Bermuda’s only Portuguese club.
Mr Pereira’s LinkedIn page states he is a “property/project manager certified consultant” who has been special adviser to housing minister Zane DeSilva since June last year.
In recent years, he has worked as a project manager for Ocean Interiors and a building manager for Frontier Rental Property Management.
According to his online summary, his special adviser’s role involves providing “expert guidance” on national housing strategies and infrastructure planning, conducting research and analysis on infrastructure needs, monitoring and assessing global best practice in housing policy, and collaborating with cross-government teams to deliver affordable housing.
Mr Pereira, who is known as Miguel, receives an annual salary of $101,736 from the public purse as special adviser.
The other AHAC members are: Ministry of Housing permanent secretary Jeane Nikolai, policy analyst Jane Brett, senior planning officer Julie Marshall, Progressive Labour Party MP and BHC chairman Chris Famous, PLP senator and BHC board member Lauren Bell, BHC board member Lakila Bell, BHC chief executive and general manager Paul Martin, BHC chief financial officer Mark Melo, BHC project manager Keino Furbert-Jacobs, and BLMC chief executive Andrew Dias.
Ms Nikolai replaced Andrew Pettit, the former housing ministry permanent secretary.
Mr DeSilva told Parliament that the AHAC was “headed by a host of individuals who are professionals in this country” and that “those were the individuals, along with industry partners, those in the construction industry, the Chamber of Commerce, the Construction Association” who conducted the committee’s “rigorous technical and procurement evaluation” before the phase one affordable housing contracts were awarded.
The housing ministry said on Tuesday that the committee “conducted the technical evaluation and made recommendations” before CPS and Preconco won the multimillion-dollar contracts.
The two companies were described by Mr DeSilva in Parliament as “premier partners … each with successful experience in Bermuda and the capability to meet our strict building codes”.
A Barbados Todaynews report in March last year revealed that employees of Preconco walked off the job there citing “deep dissatisfaction with working conditions, including inadequate wages and significant health and safety concerns”.
The article quoted Dwaine Paul, the deputy general secretary of the Barbados Workers Union, as saying the walkout stemmed from longstanding issues that remained unresolved.
Preconco has been chosen to build 110 precast concrete units for seniors at Morgan’s Point, Southampton.
CPS will build 84 units at Victoria Place and Albert Row, in Dockyard, and Tommy Fox Road, in St David’s.
The latter project will be financed by a $64 million loan to the BLMC from the Bermuda Commercial Bank, whose deputy chairman is Chris Maybury, an investor in the Fairmont Southampton redevelopment.
Both contracts are part of the first phase of the Government’s ten-year affordable housing project, which aims for 974 new homes for $418.5 million by 2035.
The scheme includes the building of 229 new residential units before the end of 2028, at a cost of almost $115 million.
Mr DeSilva told Parliament that CPS’s contract was awarded without a bidding process to enable the work to be completed sooner.
However, a representative of Stack Modular claimed publicly last month that the firm could build 974 units for only $258 million.
The housing ministry said on Tuesday that “procurement decisions and project delivery were the responsibility” of the BHC and BLMC “under their respective statutory governance frameworks”.
A government spokeswoman said those public authorities “have the legal authority and responsibility for their procurement processes” and so the OPMP had no oversight “over any contracts or related documents for the affordable housing project”.
The Gazette asked government backbencher Chris Famous, chairman of the BHC and an AHAC member, for an interview about the committee’s recommendations.
He replied: “Not a chance.”
The Gazette also asked BHC general manager Paul Martin, who said a response was being worked on by the “team” so they could “speak with one voice”.
The newspaper tried without success to reach BLMC chief executive Andrew Dias and AHAC chairman Mr Pereira for comment.
• To read the Zane DeSilva’s statement and associated documents, see Related Media
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