29 April 2014

Liberia: NPA Hooked, Liable for Contractual Breach in Bryant Saga

Former National Transitional Government of Liberia Chairman Charles Gyude Bryant frustrated by the cancellation of a contract the company he locally represents was negotiating with the NPA is now dead and gone, but justice has prevailed at last with a complaint filed before the Public Procurement and Concession Commission of Liberia (PPCC) by the Damen Shipyard now decided.

Bryant, who had been ailing, fought in vain with the NPA over a tugboat contract he had legally won through a competitive bidding process. Bryant, who was the Liberian representative for Damen Shipyard, a Netherlands-based company, had filed a complaint before the Complaints, Appeals and Review Panel of the Public Procurement and Concessions Commission(PPCC) against the NPA for Tugboats that the company submitted bid for and the NPA illegally cancelled in contravention of the PPCC Act.

In the letter of complaint to the PPC dated March 3, 2014, addressed to the Executive Director of the PPCC, Damen Oerlemans, Regional Director for Africa for Damen Shipyard, filed a formal complaint to the Commission against the NPA.

The complaint stated: "We present our compliments and herewith file a formal complaint concerning our Bid offered to the National Port Authority (NPA) in keeping with the NPA's advertised invitation to tender for the acquisition of two (2) second-hand tugs-Bid Ref. ICB No NPA/ICB/002/2012. This complaint is made in keeping with Part V111-125-"rights to review", of the amended and Restated PPCC Act of 2005, approved September 16, 2010", stated the complaint.

In rendering ruling into the case entitled "Opinion in the Case: Damen Shipyards Gorinchem vs. National Port Authority", the PPCC held the National Port Authority in violation of the PPCC Act and reversed the decision of the port to cancel contract negotiations with the Damen Shipyards.

NPA's Action Reversed

"Accordingly, the Complaints, Appeals and Review Panel (CARP) invalidates and reverses the decision of the National Port Authority to abort all negotiations and cancel the procurement process relative to the purchase of tugs, and that to ensure compliance with the PPC Act, the National Port Authority is hereby ordered to formalize the contract for the acquisition of tugboats with Damen Shipyards Gorinchem in keeping with prior negotiations, AND IT IS HEREBY SO ORDERED", a ruling dated April 25 and signed by a five member panel stated. The Panel in its findings declared that the NPA was in violation of the PPC Act 2010 by cancelling the bid proceedings after the issuance of a letter of intent to award the contract to Damen Shipyards

Stated the Panel Opinion "Wherefore and in view of the foregoing facts and laws, it is the opinion of the independent Complaints, Appeals and review Panel of the Public Procurement and Concessions Commission of the Republic of Liberia that the National Port Authority was in violation of the PPC Act 2010, when she called the bid proceedings after issuance of a letter of intent to award contract and another letter authorizing Damen to begin contract negotiations with the NPA".

Faulty reliance

The PPC in detailed analysis on the compliant stated that justification by the NPA that it cancelled the contract because of another negotiation with the Kuwaiti Fund is unjustifiable as such was the reason the NPA should have indicated such in its bid advertisement.

"During investigations, the NPA provided reasons for the cancellation of the bid in two separate letters dated March 31, 2014, and April 15, 2014. In the March 31, 2014 letter, the NPA informed the Panel that the NPA had the right to cancel or reject all bid documents thereby incurring any liability to bidders. In reliance thereto, the NPA cited section 1 (39.1) of its bid document. In its second letter of April 15, 2014, the NPA said that she cancelled the bid because, it was in the process of rectifying a loan with the Kuwaiti fund for the purchase of tug boats among other things that must be bided for following specific rules that had o be preapproved by the fund. The later suggest that the Kuwaiti fund was in fact the pre-condition for advertising the bid. If this is the case, the panel thinks, that such preconditions should have been mentioned in the NPA's advertisement. To have failed to mention it in the bid document and/or notice of intent to award and the letter authorizing the contract negotiations, as well as the series of negotiations itself constitutes a waiver and a bar to exercise the right to cancel the bid proceeding as in this instance case", the panel stated.

The Panel contends that the NPA's reliance conflicts with the PPC Act as the establishment of the commission is to ensure that all procurement proceedings are in compliance with the PPCC Act of 2010.

"The NPA's reliance on its letter of March 31, 2014 conflicts with the PPCC Act of 2010. As such, the Act prevails over the bid provided by the NPA. The essence of the establishment of the PPCC is to ensure that all procurement proceedings are complaint with the PPC Act of 2010", the Panel expressed.

According to the Panel, assuming without the NPA admitting that the Kuwaiti fund could be used as a precondition for the awarding of the contract subject to dispute, the PPCC Act is clear and unambiguous on contracts.

"According to Part IV, section 36 (2b), "a procurement proceedings may be cancelled for insufficient funding at any time prior to the acceptance of a bid where continuing with the procurement in its present form or a substantially similar form is not appropriate", the PPC Panel ruling finds.

Binding on parties

In the opinion of the Panel, circumstances that surrounded the biding, exchange of sealed bid and acceptance of bid by the NPA followed by a letter of intend to award met the meeting of the kinds of the two parties and was therefore binding on both parties.

Stated the Panel "In this case, the exchange of the sealed bid by Damen, and the acceptance thereto, that is to say the letters of award and contract negotiations from the NPA to Damen essentially met the meeting of the minds of the parties thereby binding them. Either party could not have cancelled the contract without the knowledge and consent of the other or without due process of the laws. For either party to have done so, in the mind of the Panel, is arbitrary and a violation of the PPCC Act. The authority to cancel a contract is vested within the Judiciary Branch of government. As such, any party exercising that authority without due process is void ab initio".

Case history

The National Port Authority in July 2012 advertised an International Competitive Bid (ICB) for the supply of two second hand tugs for use by the NPA and six companies participated in the process including Damen Shipyards.

Following the review of the bid documents, the NPA declared the Damen Shipyards as the winner of the bid and wrote the shipping agency notifying it of intent to award a contract.

In a letter dated May 1, 2013, under the heading "Notice of Intent to Award", signed by Matilda W. Parker, Managing Director of the NPA, the NPA notified the DAMEN Shipyard Gorichem of its intent to award the contract for the supply of the tug boats to the shipping agency requesting the agency to prepare for the contractual process.

"I present my compliments and on behalf of the Procurement Committee of the National Port Authority (NPA), I thank you for the two visits made to the NPA Conference Room on April 17, 2013 and April 19, 2013 respectively, in which the reports from the Due Diligence process were scrutinized by the Procurement Committee.

In view of the aforementioned, we wish to notify you of our intent to award a contract to Damen Shipyard consistent with IFB No-NPA/ICB/002/2012-Tug Boats acquisition.

Meanwhile, I request that you kindly prepare yourself for the NPA contractual process along with the Ministry of Justice and the Ministry of Finance, upon approval by the PPCC", a letter signed by Matilda Parker, NPA Managing Director with CC copy to Hon. M. Nathaniel Barnes, Chairman/NPA Board of Directors, Dir. Rudolph J. Merab, Chairman, Operations Sub-Committee/NPA Board of Directors, DMD/A/NPA; Comptroller/NPA, Legal/NPA and Dir of Ports & Harbor/NPA stated.

The NPA through its Managing Director, Matilda Parker wrote another letter to the General Manager of DAMEN Shipyard on July 25, 2013 requesting the agency to a meeting in the NPA conference room to negotiate the contract in keeping with the PPCC laws.

Stated the NPA July 25, 2013 letter signed by Managing Director Matilda W. Parker:

"We present our compliments and wish to inform you that the PPCC Laws require a contract negotiation for the purchase of capital items. In fulfillment of that law, you are invited to a meeting on Tuesday, July 30, 2013, at 3:00 pm in the Conference Room of the NPA Head Office to negotiate a contract for the purchase of two (2) tugboats".

In follow-up to the supply of the tugboats, former NTGL Chairman Bryant wrote the NPA on October 3, 2013 inquiring why the NPA had been mute on the contract negotiations after it had notified the Damen Shipyard that the agency gets ready to negotiate the contract.

Former Chairman Bryant stated in the letter:

"Dear Mrs. Parker:

You will recall that on the 23rd of August 2013, you communicated to me that the NPA was in the process of seeking approval from PPCC for the purchase of new tugs. Since that date, we have heard absolutely nothing from the NPA. Please be informed that if the NPA is having difficulties getting approval from PPCC for the purchase of new tugs, built to the full specification of the NPA, we wish to confirm that second hand tugs are still available to be delivered in keeping with our original bid for used tugs.

Please let us know when these negotiations can be continued for either used or new tugs in keeping with your specification, and Notice of Intent to purchase two (2) tugs from Damen".

Responding to Bryant's letter Matilda Parker, NPA MD stated:

"Dear Mr. Bryant,

I am very pleased to present avid compliments, and hereby acknowledge receipt of your letter concerning the second hand tugs that are also available for purchase. You will be contacted by our legal department to continue negotiations". Damen Shipyard in a January 10, 2014 letter to the NPA requested information on the delay in getting word from the Legal Department of the NPA as stated by Managing Director Parker in her communication to Mr. Bryant.

"In the beginning of November we received your notification letter MD-1/648/2013 dated 29 October, 2013, in which you mentioned that your legal department would contact us in order to continue negotiations for the acquisitions for tug boats. However, until now we haven't had any message from your legal department", Dereck Oerlemans, Damen Shipyard Regional Director Africa stated in the letter. Cllr. Jeffrey George, Legal Division of the NPA in a letter dated January 13, 2014 informed Damen Shipyards that the NPA was aborting the contract.

"In an effort to support the PPCC Law by affording all bidders equal opportunity, coupled with the fact that it does not have the capacity readily to purchase new tugs, the NPA has decided to exercise its rights as stated under E: 'Evaluation and Comparison of Bids Prior to Contract Award' in section 39.1 (Purchaser's Right to Accept Any Bid And To Reject Any or All Bids) of the bid document to abort all negotiations relative to the purchase of tugs and hereby abort the process until it is financially capable of purchasing new tugs; at which time bid documents for new tugs will be published.

Accordingly, we wish to inform you that all negotiations for the purchase of tugs are cancelled for now and the immediate future", the indicated. Damen Shipyard again wrote the NPA informing the Port that the issue of new tugs was not a major problem as the agency was available to provide used tug boats based on the need of the NPA.

The shipping agency stated in the letter: "Dating back to our letter DJo/MvV/P240574 of April 24, 2013, we confirmed that the used tugs were available. We repeated that confirmation of availability of used tugs built to the specification of the NPA in our letter of October 3, 2013 signed by our Local Representative, C. Gyude Bryant (see Attachments 1 and 2). Therefore Damen would like to stress we have never neither verbally nor in writing said or put that used tugs are not available. In fact, for a very long period already Damen has two perfectly suitable tugs available meeting the requirements".

The shipping agency appealed to the NPA to reconsider its decision aborting the negotiations, but Managing Director Parker in a January 28, 2014 letter confirmed the NPA's action aborting the contract. "On behalf of the National Port Authority, this letter serves as confirmation of the cancellation of said bid", MD Parker declared.

President Sirleaf gives go-ahead

In a letter dated July 8, 2013, Edward B. McClain, Jr. informed that NPA that President Sirleaf interposes no objection to the acquisition of the used tugboats.

The Letter States:

"This is in response to request for presidential authorization to proceed with the acquisition of two used tugboats for the National Port Authority. It is our understanding that there is some concern that the purchase of two tugboats might be prohibited by Government's policy because the tugboats are not new but used. It should be noted that Government's Fleet Management Policy, published by the General Services Agency, which expressly prohibits the purchase of used vehicles for Government, applies to land-based vehicles and is not intended to apply to sea crafts or aircrafts, which can be very costly when purchased new".

The Ministry of State cautioned the NPA that when such equipment are purchased all care should be taken to ensure that the item are thoroughly examined and under proper and reasonable warranty.

"It is imperative, however, that whenever such used equipment are being purchased for use by Government or an agency of Government, all care should be taken to ensure the items are thoroughly examined and under proper, reasonable warranty. The tugboats to be purchased are necessary to facilitate safe international and domestic trade by ocean-going vessels that carry goods and passengers within our territorial waters.

The National Port Authority has confirmed that all other procurements under existing laws have been duly met. We understand these have been or are being further confirmed by the Public Procurement and Concessions Commission and because of the amount of money involved, the Ministries of Finance and Justice will participate in concluding the acquisition of the tugboats", the Ministry of State noted in the letter to NPA MD, Matilda Parker.

The Ministry concluded in the letter that President Sirleaf interposes no objection to the purchase of used tugboats. "In view of the above, Her Excellency herein interposes no objection to the acquisition of the two used tugboats", the letter from the office of the President stated.

Despite a letter of appeal from the shipping agency calling on the NPA to reconsider its decision coupled with the letter of no objection from the President, the NPA did not recommence contract negotiations prior to the death of Bryant.

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