Galloway Group succeeds in court challenge of Government bad procurement habits
By Bennette Roach
During the past month the High Court has handed down judgments which have come in against the Government in one form or another with all of them impinging on issues that have been brought to the attention of former Governor Adrian Davis.
In our lead story we featured where the prison officials (who come directly under the Governor’s authority) have been told that they have been breaching prisoners’ rights.
Then a couple weeks ago Justice Albert Redhead handed down a judgment in which he was severely critical expressing surprise often in the judgment, stating, “The law must be complied even if it has significant consequences for the administration.”
Justice Redhead found in the case, Galloway Group vs The Minister of Communications, Works and Labour, The Attorney General and The Public Procurement Board: “In my opinion to say that the Procurement Regulations were not strictly adhered to is to overstate the situation because in my view, there was absolutely no adherence to the Procurement Regulations.”
It would not be unfair to accuse the former Governor of encouraging, what he simplified as ‘NOT’ being wrong doing but mistakes. The lack of adherence to the Procurement Regulations was a topic which had been drawn over and over to the Governor at press conferences and in the press; a topic which featured in the fall of the Montserrat Development Corporation (MDC).
It was in April 2012, we informed in a headline subhead “the Ministry of Communication & Works under scrutiny” The Honourable Financial Secretary (F.S.), John Skerritt, said the “new procurement regulations are much tougher than what currently exists”, while providing for more transparency and accountability by accounting officers. (http://www.themontserratreporter.com/government-reviewing-procurement-practices/)
At the Governor’s press conferences we were soon to be questioning both himself and DFID rep Kimbugwe about information and misgivings as to how the new Procurement rules were being abused. By May 2013 in a rare press conference former Premier Meade landed in a headline, ‘Premier misfires on procurement – GoM loses appeal in Court’. The then Premier was responding to the press about procurement issues. By that time of course the news of the Galloway case in the air. (http://www.themontserratreporter.com/premier-misfires-on-procurement-gom-loses-appeal-in-court/) The Government has taken that matter to the Privy Council
In October 2012 the Government of Montserrat (GOM) entered into a contract with Iceland Drilling Company to provide drilling services for geothermal exploration in the Weeks’ area, Montserrat.
Mr. Jean Kelsick for the Claimants, assisted by Mr. McGregor; Miss Jamiel Greenaway and Mrs. Jemmotte-Rodney with her represented the defendants in the matter before the court which resulted in a sizable sum awarded in damages, costs and other relief. The Galloway Group sought judicial review which derived from the procurement of a dredging contract of the Plymouth harbor on Montserrat, in connection with and preparation for the geothermal drilling exploration which began in 2013.
The Claimants contended that the period for the preparation of tenders were exemplarily short. On the December 18, 2012 the Claimant s submitted a tender in response to an advertised contract on the GoM website . There were only two bidders for the dredging of the Plymouth harbor, the Claimant and Wall Trading Ltd (Wall) The Claimants’ bid was for $3,960,000.00 while Wall’s bid was for $470,000.00 on the December 28, 2012, the Department cancelled both bids. Then subsequently on the January 7, 2013, the first Defendant granted the contract to Wall to dredge the Plymouth Jetty.
On that background, the Claimants sought the following orders and were successful on all or most of them. A declaration that the original procurement was:
Unlawful and irrational and/or unfair and/or in breach of the Claimants’ legitimate expectations;
(ii) In contravention of the Procurement Regulations;
(iii) In breach of the Defendants’ Statutory duties
(b) A declaration that the defendant manifestly erred in identifying Wall as the lowest priced tender in terms of the original procurement exercise.
(c) A declaration that the first defendant’s decision on or about the January 7, 2013 to enter directly into a contract with Wall was:-
(i) Unlawful and/or irrational and/or unfair or in breach of the Claimants’ Legitimate expectations; (ii) In contravention of the Procurement Regulations; and (iii) In breach of the Defendants’ Statutory duties
(d) Damages
(e) Cost
(f) Such other relief as the Court deems appropriate
At the trial the defense tried to take away the culpability of the Minister suggesting that the claimants came against the wrong parties, forcing the invoking from the judge, “I ask the Question, is not Public Works Department the same as Communication and works, for which the First Defendant is the Minister? – Unfortunately, for Learned Counsel to make such submission shows a lack of appreciation that in such situation, ultimate responsibility rests with the Minister.”
The judge also brought Cabinet into the seat of responsibility, and adjudicated, “Mr. Kelsick in his written submission argues that the cabinet direction authorized. ‘The Financial Secretary supported by the Permanent Secretary Communications and Works and the Director of Public Works to negotiate with the relevant specialized contractors. Cabinets decision was implemented jointly by Ron Beardsley as Director and Phillip Chambers as Permanent Secretary. The First Defendant as the Minister of their department is responsible and liable for their actions.’ In my view there cannot be any argument against that view.”
Implicating Cabinet again at Section 35: “In my considered opinion, The Cabinet would have no legal basis for making such an order, especially if it was meant to abrogate the Procurement Regulation, as it seems the case following the subsequent action of the first Defendant.”
TMR has complained about the Government’s lack of due diligence in carrying out projects. In this judgement the judge mentions flaws suggesting improper advertising practices. “In this instant case the Defendants initially properly proceeded by way of the public Procurement Procedure in spite of some flaws and irregularities contained therein, such as advertising,” he says.
In that judgment the veteran Judge remarked, again incriminating Cabinet referring to Mr. Kelsick’s contention. ‘…given that the Cabinet decision was only issued on 3rd January 2013, it is clear that negotiations with Wall must have taken place prior to the Cabinet direction being issued…that is Significant because on the Claimants hypothesis that the Cabinet direction was not granted prior to 9 a.m. on 3rd January 2013, negotiations outside any recognized procurement exercise under the procurement Regulations and prior to Cabinet direction being issued.
Judge Redhead said: “In my opinion, Mr. Kelsick’s reasoning cannot be faulted in light of the fact that there is evidence that Cabinet does not sit before 9:00 a.m. That is what prompted me to remark above that the dealings with Wall seemed to have been clandestine.”
In another place the Judge reacting to the corruptible nature of the defendants’ claim that their action was necessary because of the urgency, said: “…that does not give any justification to the Defendants to deal with Wall alone and in what appears to be in a clandestine manner.”
The Judge could not understand why the Permanent Secretary involved at the time of the unsavory actions, still in the GoM’s employ, was not called to give evidence in the matter leaving another PS to give evidence in a situation she was unfamiliar. “There is a troubling issue for me in this case i.e. the absence of Philip Chambers as a witness or any evidence from him in this case,” he said.
He continued: “Philip Chambers was at the relevant time the Permanent Secretary in the Ministry of Communications, Works and Labour. In my view he played a pivotal role in the award of the contract with Wall, yet there is no affidavit evidence from him to explain why or the reasoning behind the granting of the contract to Wall.”
The ministry of Communications and Works actions were deemed clearly in breach of the Public Finance Management and Accountability Procurement Regulations 2012 section 7 as amended. The court ruled that urgency could not justify the government’s failure to comply with procurement…”the failure to invite tenders from both Wall and the Claimants was entirely unjustifiable and a breach of the most basic requirements of natural justice and procedural and substantive fairness,” the judge ruled in favour of the Galloway group.
In his judgment the judge following the grant of the declarations, ruled: “There will be judgment for the Claimants against the Defendants in the sum of $85,294.77 ($66,032.27 for the loss of profit, and $19,262.50 for incurred expenses) and Costs $15,000.00. A total of $100,294.77.
in his judgment the court awarded $66,032.27 to the Galloway group for the loss of profit, $19,262.50 as the sum for the incurring expenses and cost amounting to $15,000.00 for a grand total of $100,294.77.
