PROCUREMENT GUIDELINES - “9 IMPLEMENTING AGENCY

“9 IMPLEMENTING AGENCY

10. PROCUREMENT GUIDELINES

(10.1) The implementing MDA must ensure that the Procurement Policy, Guidelines, the FAA Act, Regulations and Instructions are strictly adhered to.

(10.2) Where any doubt exists in relation to the procurement procedures, clarification and/or advice must be sought from the Ministry of Finance and the Public Service before proceeding.”47

______________________________________________________________________________ NWA CDF Contracts Awarded to Office of the Contractor General 2014 February Contractors Allegedly Selected Page 51 of 62

by the Hon. Derrick Kellier Analysis of Contract Awards

Having regard to the numerous recommendations which were made by the Hon. Derrick Kellier, and the various letters which were provided by him, to the OCG, the OCG took a decision to review the contracts which were awarded by the NWA and to assess those awards against the recommendations which were made by the Hon. Derrick Kellier.

In this regard, the OCG perused more than ninety percent (90%) of the contracts which were recommended by the Hon. Derrick Kellier and found that, in all instances, the contracts were awarded by the NWA to the persons/contractors who/which were named by him. It is also the case that the OCG found that the contracts were awarded to the named contractors/individuals in the sums which were outlined in the various pieces of correspondence and for works to be carried out at the stipulated locations which were stated in the letters from the Hon. Derrick Kellier.

Against this background, the OCG found that the contracts were awarded by the NWA, as per the content of the letters from the Hon. Derrick Kellier. Further, given the direct relationship between the content of the said letters and the ultimate award of the contracts, same raises the question as to the level and/or degree of influence which was exerted upon the process by the Hon. Derrick Kellier.

by the Hon. Derrick Kellier CONCLUSIONS

Based upon the documentary evidence, inclusive of the sworn Statements which have been submitted to the OCG, by the Hon. Derrick Kellier and the representatives of the NWA, the OCG has arrived at the following considered conclusions:

1. The OCG has concluded that the majority shareholder of M & K Heavy Equipment Hireage Co. Ltd., Mr. Martin Kellier, is the brother of the Hon. Derrick Kellier, Member of Parliament for the Southern St. James Constituency.

2. The OCG has found and concluded that Mr. Martin Kellier/M & K Heavy Equipment Hireage Co. Ltd. have been the beneficiaries of at least two (2) contracts which were awarded subsequent to a written request from the Hon. Derrick Kellier, to the representatives of the NWA, for certain works to be executed in his Constituency.

The OCG has further concluded, based upon the sworn statement of Mr. Philip Clarke, that he, Mr. Philip Clarke, in his official capacity as the NWA Parish Manager “… made recommendations for the award of contracts to M & K Heavy Equipment Hireage Co. Ltd. These recommendations were made as per within my portfolio responsibility and in accordance with the GOJ Procurement guidelines. I did not at any time intervene in or gave instructions to any Public Officer/Official as it relates to the award of contracts to M & K Heavy Equipment Hireage Co. Ltd.”

3. The OCG has further concluded that the representative of the NWA, who, had previously expressed to an OCG Officer that works were undertaken at the request of the Hon. Kellier, has now, in his sworn representations to the OCG denied any such occurrence or

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that he felt in any way, intimidated, under duress, and/or coerced in the facilitation of the award of the referenced contracts.

4. The OCG has concluded, based upon the sworn statement of the Hon. Derrick Kellier, that the contracts/works which were ‘recommended’ by him were eventually awarded by the NWA St. James Parish Office.

5. Based upon the sworn statements of the Hon. Derrick Kellier, Mr. Philip Clarke and Mr. Howard Ramsay, the OCG has concluded that none of the three (3) public officers/officials are willing to accede to who and/or which entity was responsible for the selection of the contractors who were listed in several letters by the Hon. Derrick Kellier and to whom/which contracts were ultimately awarded. In particular, the OCG has found that the statements which have been supplied by the Hon. Derrick Kellier, Mr. Philip Clarke and Mr. Howard Ramsay as it regards the selection of the contractors are not explicit, and does not clearly detail the name of the person(s) who ultimately selected the contractors.

6. The OCG has concluded that the statement by the Hon. Derrick Kellier that he only recommends and does not award contracts is factually correct. However, the ultimate effect of the recommendation is the consequence or apparent influence which his written correspondence had in the award of the contracts, inclusive of contract awards to his brother, Martin Kellier and M & K Heavy Equipment Hireage Co. Ltd.

7. The OCG has found that on at least seven (7) distinct occasions the Hon. Derrick Kellier ‘recommended’ for works to be undertaken in his Southern St. James Constituency and,

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in the majority of instances, though not all, listed the contractors, contract sums and locations at which the works were to be undertaken.

However, the OCG has found, based upon the ninety percent (90%) review of the contracts, and concluded that the NWA awarded the contracts to numerous contractors in keeping with the recommendations which were made by the Hon. Derrick Kellier. There was, therefore, a direct relationship between the contract awards and the recommendations which had been made by the Hon. Derrick Kellier.

8. Based upon the documentation which has been provided to the OCG, during the course of its investigation, the OCG has concluded that in the award of a contract to M & K Heavy Equipment Hireage Co. Ltd., the referenced contract, in the sum of $840,000.00, was awarded under the emergency contract award process but without the requisite prior approval of the Accountable Officer of the NWA. The foregoing would have, therefore, been a breach of the Government’s Procurement Regulations.

9. The OCG has concluded, based upon the sworn statements which were supplied to it by the Hon. Derrick Kellier, Mr. Philip Clarke and Mr. Howard Ramsay, that it is an ongoing practice for Members of Parliament to advise ‘the Parish Manager’ of works which they are desirous of having executed.

10. Despite the sworn statement which has been provided by the Hon. Derrick Kellier to advise the OCG that the extent of his involvement was restricted to positing recommendation, the OCG has been led to conclude, based upon the content, language and instructions of his numerous correspondence to the Parish Manager of the NWA St. James Parish Office, that same was not interpreted as a mere recommendation by the

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NWA Official, and given the fact that the Hon. Derrick Kellier has attested to the fact that the “… works set out in DKI to DKX inclusive were implemented”, it has been concluded that same was not implemented as ‘mere recommendations’.

11. The ‘recommendations’ of the Hon. Derrick Kellier were executed by the NWA St. James Parish Office; same has led the OCG to conclude that there is a prima facie case of nepotism, concerning the recommendations made by the Hon. Derrick Kellier, and the consequent award of at least one (1) contract to Mr. Martin Kellier.

by the Hon. Derrick Kellier REFERRALS

The OCG, in the conduct of its Investigation, is required to be guided by Section 21 of the Contractor-General Act.

Section 21 of the Contractor-General Act, provides as follows:

“If a Contractor-General finds, during the course of his investigations or on the conclusion thereof that there is evidence of a breach of duty or misconduct or criminal offence on the part of an officer or member of a public body, he shall refer the matter to the person or persons competent to take such disciplinary or other proceeding as may be appropriate against that officer or member and in all such cases shall lay a special report before Parliament.” (OCG Emphasis)

1. The OCG, based upon documentary evidence which has been presented to it by representatives of the NWA, is hereby referring a copy of its Special Enquiry Report to the Director of Public Prosecutions, for due consideration and/or investigation as she may deem fit, having regard to the breaches of the Government of Jamaica Procurement Procedures and the attendant Regulations, which have been identified herein.

The OCG is hereby referring the matter for the determination to be made as to whether Mr. Phillip Clarke, Parish Manager, NWA St. James Parish Office, breached Sub-Section S-1.1.5, ‘Contracting Under Emergency Circumstances’ of the Handbook of Public Sector Procurement Procedures (October 20), which states, inter alia, that “Where an emergency situation exists as defined above, the Procuring Entity may engage a contractor by means of

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Direct Contracting. The Head of the Procuring Entity shall give approval for the issuing of emergency contracts. This approval shall be in writing and shall form part of the procurement record to be kept by the Entity.”

In the instant matter, Mr. Phillip Clarke, as evidenced by a Memorandum of 2012 February 2, and although having previously sought approval for the award of a contract for M & K Heavy Equipment Hireage Co. Ltd, proceeded with the award of the contract prior to the receipt of approval for same. The foregoing resulted in retroactive approval being granted for same.

The OCG is referring this matter to the Director of Public Prosecutions, having particular regard to the provisions of Section 40 of the Public Sector Procurement Regulations (2008), which provides as follows:

“A person who –

(a) contravenes these Regulations; or

(b) aids, abets or otherwise knowingly facilitates or is an accessory to the contravention of these Regulations, commit an offence and is liable, on summary conviction in a Resident Magistrate’s Court, to a fine not exceeding one thousand dollars or to imprisonment for a term not exceeding three months or to both …” (OCG Emphasis)

by the Hon. Derrick Kellier RECOMMENDATIONS

Section 20 (1) of the Contractor-General Act mandates that “after conducting an Investigation under this Act, a Contractor-General shall, in writing, inform the principal officer of the public body concerned and the Minister having responsibility therefor of the result of that Investigation

and make such Recommendations as he considers necessary in respect of the matter which was investigated.” (OCG’s Emphasis)

In light of the foregoing, and having regard to the Findings and Conclusions that are detailed herein, the OCG now makes the following Recommendations:

1. It is strongly recommended that Members of Parliament and/or Ministers of Government should not be involved in the recommendation and/or selection of contractors to whom they are related as the proposed beneficiaries of Government of Jamaica contract awards.

The OCG’s recommendation is premised upon the fact that the selection and/or recommendation for the award of contract(s), by a Public Official, to his/her relative and/or a company in which such a relative has a pecuniary interest, can create the perception of a conflict of interest, or the perception of the notion of bias and, inevitably, the perception of nepotism. Consequently, without the proper checks and balances, and an independent selection and award criterion, the process runs the risk of being labelled nepotistic.

2. Further, the OCG must recommend that Members of Parliament should recuse themselves from decision making processes which involve the award of GOJ contracts in

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scenarios which pose potential conflicts of interest. In particular, where there is the slightest hint and/or suggestion of nepotism, whether real or perceived.

3. The OCG recommends that there be an absolute separation of the responsibilities of the Members of Parliament as it concerns the conduct of needs assessments and the identification of projects which are to be undertaken through their respective CDF Fund allotments, and the eventual recommendation and/or selection of contractors to execute the identified works.

4. Given the circumstances of the current Investigation, which involves both a Member of Parliament and a Councillor for a given Constituency, the OCG must strongly recommend that such Public Officers/Officials should not be the recipients of contract awards and/or undertake work in their own constituency, either through the use of a private firm with which they are affiliated or otherwise, given the perception of a conflict of interest and the perceived notion of bias.

5. The OCG recommends that strict adherence be observed to the Procurement Guidelines and attendant Public Sector Procurement Regulations by all procuring Public Bodies and the respective Public Officers who are charged with the responsibility for administering the award of Government Contracts.

6. Where, however, a GOJ Development Project permits the receipt of recommendations from a Member of Parliament and/or Minister of Government for the engagement of contractors, the suitability of the recommended contractors should be, at a minimum, independently vetted by the Procuring/Implementing Public Body with time being of the

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essence for completion of the process and once in excess of a certain value threshold, same should be subjected to some form of a competitive procurement process.

The OCG, therefore, recommends that Public Bodies should, in keeping with the stipulated Procurement Guidelines, establish robust and transparent systems and processes to ensure that the selection of contractors at the community level is free from the perception of bias and political interference in the award of the referenced contracts.

by the Hon. Derrick Kellier

List of Appendices Page #

1. A copy of a letter which was dated 2010 December 9, from the Hon. Derrick Kellier

which was addressed to Mr. Philip Clarke……… (i)

2. A copy of a letter which was dated 2011 December 2, from the Hon. Derrick Kellier

which was addressed to Mr. Philip Clarke……… (iii)

3. A copy of a letter which was dated 2010 November 26, from the Hon. Derrick Kellier

which was addressed to Mr. Philip Clarke……… (iv)

4. A copy of a letter which was dated 2010 December 10, from the Hon. Derrick Kellier

which was addressed to Mr. Philip Clarke……… (v)

5. A copy of a letter which was dated 2011 August 2, from the Hon. Derrick Kellier

which was addressed to Mr. Philip Clarke………. (vi)

6. A copy of a letter which was dated 2011 October 18, from the Hon. Derrick Kellier

to Mr. Philip Clarke, which was captioned “Re: $3M Mitigation Programme”……….. (xi)

7. A copy of a hand-written letter which was dated “5.12.2011” from the Hon. Derrick Kellier,

which was addressed to Mr. Philip Clarke, and which was captioned “Re: $2 Million Bushing & Drain Cleaning”….. (xiii)

8. Exhibit note, which was labeled “DK IX”……… (xvi)

In document OFFICE OF THE CONTRACTOR-GENERAL OF JAMAICA (Page 50-62)