Local insurance brokers complain about a skewed GPL procurement process
Kaieteur News – Three local insurance brokers have filed a formal complaint with Public Works Minister Juan Edghill against the Guyana Power and Light (GPL) for allegedly violating procurement processes in connection with his 2021 Tender for providing Insurance Services- Production of Other Services and Equipment (GPL-PD-015-2021).
In a letter dated February 16 seen by Kaieteur News, members of the Guyana Insurance Brokers Association (GIBA) detailed that they were “deeply concerned and intimidated” by the conduct of GPL, whose Officers and Directors are alleged to be in the procurement process current rigged to favor the current insurance holder.
GIBA said in its letter to the Minister, “This Society continues to raise alarms in relation to the perception of corruption and nepotism that appears to surround insurance tenders for public corporations and the public. a finding that the outcome undermines the tendering process to the detriment of those public corporations, in particular, as we are aware of His Excellency, the President has stated that the insurance cover for all government entities to be properly and properly tendered. ”
A previous complaint was submitted to the Public Procurement Commission (PPC) on January 6, 2021 concerning the 2017 Tender for Provision of Insurance Services – Manufacturing and Other Equipment.
In that letter, the three insurance brokers; Abdool & Abdool Inc., Raj Singh Insurance Brokers and P&P Insurance Brokers Consultants Ltd argued that GPL’s tender process for 2017 straight through to 2021 lacks transparency and accountability throughout, producing awards that do not comply with tendering requirements.
The requirements in the 2017 tender document were specifically for “all risks” coverage and not “fire and special hazards.” Other requirements included that the final cost to GPL be fully presented with no hidden costs, that brokers are required to supply both qualitative and quantitative information and that insurers involved must be “rated by AC Best or Standards and Poor at least a certain level with proportionally awarded evaluation points. ”
In addition, the Insurance Act 1998 required a locally registered insurer to act as a Fronting Company to avoid direct placement as prohibited by the law, which has to pay fees for insurers foreigner who wants to do business in Guyana.
In addition, a certain withholding tax on premiums exported by the leading company was required to be charged as a certain percentage of the premium payable to the Guyana Finance Authority (GRA).
The three local brokers submitted bids within the range of US $ 750,000 to US $ 850,000 while a fourth bid for US $ 624,061 was submitted.
The broker was awarded the contract on September 27, 2017.
The local brokers, with the combined experience of over 90 years, in the business argue that the prices offered in the approved application were not competitive.
Furthermore, the brokers claimed, from their own initial investigations, that there is nowhere in the world to offer that rate, leading to the conclusion that GPL would not have been able to award the tender to the broker in question for the quoted price without compromising on own requirements.
The three local brokers also noted that documentary evidence even proved that GPL breached its own tendering procedures when it received a secondary submission from the successful broker which was not included in the original tendered amount.
Later in 2020, GPL advised on tenders for the same project.
However, with the successful broker already having the relevant tender information, it gives the complainants an unfair advantage.
The three brokers then wrote to GPL seeking an extension, one they detailed “unsatisfied” with a new tender submission date of May 14, 2020 set.
But then on April 7 of that year, the complainants were informed by GPL that the extension had been suspended and the tender ended with the award going to the broker holding the ongoing placement.
“The situation so far remains the same and essentially means that the corporation continues to breach the tender board procedure in what we believe are deliberate and calculated moves to secure the broker in question by default. , will benefit from GPL’s business to the detriment of the Corporation’s entry into a competitive bidding process, ”the complainants said.