Contract chaos

The administrative arm of the Houses of Parliament has been found wanting as the Auditor General’s Department places the spotlight on a $24-million contract to renovate the Members’ Lounge at Gordon House, as well as procurement breaches in the purchase of 16 air-conditioning units.

A special audit was conducted by the Pamela Monroe Ellis-led Auditor General’s Department into the operations of Parliament following allegations of mismanagement at the seat of the nation’s legislature.

A review of the procurement records of Parliament revealed that the contract for renovation works of the Members’ Lounge, valued at $24.407 million, was signed after the works had been substantially completed.

In March 2025, the Parliament committed to the purchase of 16 air-conditioning units valued at $3.2 million, but the procurement rules were flouted.

A review of the contract and purchase of the air condition units revealed absence of contract agreement, unauthorised bid modifications, weaknesses in procurement planning and budgeting, use of incorrect procurement methodology, and the non-inclusion of critical terms to protect government’s interest.

Monroe Ellis said she expected the Parliament to have entered into a signed contractual agreement outlining the terms and conditions that should form the basis of the accord entered into by both parties before work commenced to protect the Government’s interest.

The auditor general said the contract for $24.407 million was signed in October 2024 and the specific day was not indicated by Parliament.

As reflected on the contract, work was scheduled to commence on September 1, 2024, and end by October 14, 2024.

However, a review of the quantity surveyor’s report indicated that the work commenced on September 1, 2024 and was completed on October 4, 2024, with payment made in November 2024 totalling $20.5 million.

When the minutes of the procurement committee for November 2024 was reviewed, the auditor general said it showed deliberation on the procurement and highlighted concerns regarding the start of work without a formal contract in place.

The administrative arm of Parliament, led by Clerk to the Houses Colleen Lowe, acknowledged the auditor general’s findings that the formal contract for the renovation of the Members’ Lounge was signed after substantial works had already commenced. Further, the management conceded that certain protective provisions, such as performance security, retention, and liquidated damages clauses, were not included in the final contract.

Further, Monroe Ellis said the Parliament’s procurement of renovation works, and air-conditioning units, lacked proper needs assessment and was not included in its procurement plan and annual capital budget.

While the Parliament cited urgent health and safety concerns for the lounge refurbishment and identified 14 air-conditioning units in need for replacement, no supporting evidence or analysis was presented to justify these procurement decisions, Monroe Ellis added.

The auditor general said that, owing to the non-submission of appropriation accounts for the 2024-25 financial year, her department was unable to determine if the expenditures exceeded the approved budget.

The 2024 annual report of the auditor general stated that the Parliament had not submitted appropriation accounts for six years, spanning 2018-19 to 2023-24. The auditor general said this continued non-submission constitutes a breach of the Financial Administration and Audit (FAA) Act.

The Parliament also came under fire for modifying the original bid price of the renovation works contract by providing a $1-million discount, which reduced the original bid from $25.407 million to $24.407 million. The auditor general said this constitutes breaches of both the Instructions to Bidders and Government of Jamaica (GoJ) Procurement Guidelines.

The instructions to bidders stipulates that bids cannot be modified or withdrawn after the submission deadline. The Government of Jamaica Procurement Guidelines state that modifications or withdrawals received after the deadline must not be opened and discounts must be disclosed at the bid opening, and any undisclosed discounts cannot be considered during evaluation.

The Parliament was also called out for not following the required competitive bidding process for the procurement of 16 air-conditioning units costing $3.2 million.

According to the special audit report, the Parliament procured the equipment directly from a single supplier, instead of using the limited tender method, which mandates at least three quotations for procurements between $1.5 million and $5 million.

“This breach of the government procurement guidelines undermines transparency and fairness, and denied other suppliers the opportunity to participate,” the auditor general stated.

The Parliament also engaged the supplier without entering into a formal contract, purchase order or provision of warranty.

The absence of a signed contract limits the Parliament’s ability to enforce claims if the equipment is found to be substandard.

In a memorandum dated March 18, 2023, the Facilities and Operations Manager (FOM) wrote to the clerk seeking approval for the invoices relating to the air-conditioning units to be paid.

The clerk approved the request on March 20, 2025.

Responding to the findings of the audit, the management of the Parliament acknowledged that the memorandum submitted by the FOM did not satisfy the requirements for a formal needs assessment, as required under the Public Procurement Act and FAA Instructions.

The Parliament indicated that the absence of a documented assessment means that the procurement cannot be fully demonstrated to have been informed by adequate technical or financial justification.

The auditor general was informed that Lowe approved payment on March 20, 2025, after the fact, based on the information presented in the FOM’s memorandum.

The Parliament further indicated that the clerk did not approve or authorise the initial procurement decision, noting that the responsibility for procurement justification and approval resides with the designated procurement and technical officers.

editorial@gleanerjm.com