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, through restrictive tendering reportedly signed the contract agreement with Rolider Company in June 2015, six months before the Public Procurement Authority (PPA) granted the company’s request for the exercise in December 2015.
This is captured 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.
According to the Report, 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.”
“The 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,” the report said.
The Audit 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 are inadequate contract documentation to authenticate the procurement processes used by BOST before awarding the contract.
The Report also cited the company for paying approximately GH¢5.1 million for insurance premiums without signed contracts.
It uncovered that three service providers contracted by BOST to provide various services such as insurance, medicals, repairs and maintenance among others were without duly signed contract documents and yet management paid a total of GH¢1,207,991.62 and US$642,946.67 for these services.
The Report indicates that though management entered into contracts with most of the service providers five years ago, the contract documents have disappeared and could not be made available for review by auditors.
The only document made available, it said, was the renewal contract letter but the contractual documents were nowhere to be found at the time of the audit in October 2020.
One supplier simply named Enterprise was contracted to provide staff group and motor insurance, Asset All Risk and Public Liability was paid GH¢ 487,747.46; US$ 628,442.67 and US$ 14,504.00 for these services respectively.
Meanwhile another service provider, Total House Clinic was paid GH¢522,144.00 for medical services while a third supplier, All Garages provided repairs and maintenance of vehicles for an amount of Gh¢198,100.16, which summed up to just about GH¢5.1 million.
The report indicated the absence of the contract documents connotes ineffective control mechanisms for the custody and management of records, and consequently, auditors were unable to determine whether the service providers involved fully discharged their obligations under the terms of the contract.