The Bulk Oil Storage and Transporting Company Limited (BOST) has been cited for breaching the procurement laws in the award of a US$39 million contract for the construction of its Corporate Head office complex in 2015.
BOST during the National Democratic Congress (NDC) administration under its then Managing Director, Mr Kwame Awuah-Darko, signed the contract agreement with Rolider Company for the construction of the head office through restrictive tendering without conforming with the provisions of Public Procurement Act (PPA).
This was months before the PPA granted the company’s request for the exercise in December 2015, apparently violating the provisions of the PPA Act.
These anomalies were captured ed in the Report of the Auditor-General on the Public Accounts of Ghana: Public Boards, Corporations and other statutory institutions for the period ended 31st December 2020.
Section 39 of the Public Procurement Act, 2003 (Act 663) as amended provide that, where a procurement entity engages in restricted tendering on the grounds referred to in section 38(a), it shall invite tenders from the suppliers and contractors who can provide the goods, works or services;
(b) select in a non-discriminatory manner, a number of suppliers or contractors to ensure effective competition.
Also, Section 17. In the performance of its functions, a Tender Committee shall;
i. ensure that at every stage of the procurement activity, procedures prescribed in this Act have been followed.
ii. exercise sound judgment in making procurement decisions; and refer to the appropriate Tender Review Board for approval, any procurement above its approval threshold, taking into consideration the fact that approval above the Entity Committee is a one stop only approval.
However, the Auditor-General in his report said, their review of the procurement processes of BOST for the construction of its Corporate Head office complex disclosed that due processes were not followed.
The report noted that the PPA granted an approval request to BOST to use Restricted Tendering to shortlist and select any of three companies for the award namely; Amandi Holding Ltd, Rolider Company, Greycrest Construction Ltd and Projectual Engineering Services in a letter referenced PPA/ CEO/12/2474/15 dated December 23, 2015.
“However, the contract agreement between BOST and Rolider Company was signed on June 5, 2015, at a total contract sum of US$39,000,000.00.”
Furthermore, the Auditor-General’s team “was also not provided with the supporting documents such as the tender evaluation report, notification of award, acceptance letter, Central Tender Review Committee (CTRC) approval letter, performance security among others to serve as evidence to the processes.
“The team further sighted a request letter referenced BOST/SCR.35/PPA/PRO/SF.1/17569 dated November 11, 2015, to PPA for approval to single-source Rolider Company to design, build and finance BOST corporate Head office complex but no approval letter was provided to that effect”.
Unnoticed breaches
The Audit report indicated that Management’s disregard for the precepts of the PPA Act caused the infraction and that possible procurement breaches could be left undetected as there is inadequate contract documentation to authenticate the procurement processes used by BOST before awarding the contract.
Recommendation
The Auditor-General recommended that BOST Management should provide the supporting documentations and various approval letters from the appropriate approving authorities to support the procurement process.
“We further entreated Management to follow the procedures as enshrined in Section 90 of Act 663 as amended to rectify the contravention”, the report added.
Management response
BOST Management has responded that its Head Office project suffered institutional memory as efforts to trace the necessary documents are facing some challenges.
“Meanwhile we are making follow up to PPA to provide us with all correspondences relating to this activity”, new management of BOST stated.
