Specialty hospital hits snag…Indian contractor asks govt. to review bidding process

A major fight is looming between two Indian contractors and the government over an US$18M contract to build a specialty hospital at Turkeyen.
Construction firm, Fedders-Lloyd, is asking the Guyana Government to reverse a decision taken to award the contract to Surendra Engineering Corporation Limited of India.
Fedders-Lloyd, which says Surendra should have been disqualified as a bidder, wants the contract.
The firm, which submitted one of the lowest bids, said that a Government statement which termed them as an “air conditioning sales agent, and “an over the counter drug salesman,” has undermined its stature.
The hospital is being funded with a line of credit from India of US$18 million. The government here intends to staff the hospital with specialists from India to do complicated surgeries, ranging from heart operations and organ transplants to cosmetic surgery.
Preliminary works have begun at Turkeyen, East Coast Demerara where the specialty hospital is intended to be built. The announcement for construction was made in February 2011 by former President Bharrat Jagdeo when he returned from India after securing a US$18M line of credit.
Government had budgeted $150 million to commence the preparatory work. Cabinet awarded $97M to G. Bovell Construction Services in January 2012 to commence those works which included the construction of a fence, bridges and gateways.
Fedders Lloyd, in a released letter sent yesterday to the Permanent Secretary of the Ministry of Health which is handling the project, said that the pre bid meeting was held on April 23, 2012 at the Ministry of Health, Guyana.
Mr. N. C. Soral, Sr. Vice President and Representative, Mr. Ajay Jha attended the meeting.  As part of the meeting they visited the site and the clarifications pertaining to the tender were issued during their stay, before they left Guyana.
It was noted that the date was extended for submission of the bid documents extended from March 20th, April 17th, to May 15th and then June 26th, 2012.
The company said finally on 26th June, 2012 the bid documents were submitted by Mr. Ajay Jha. Subsequently, Fedders and Lloyd said that the bid prices were opened the same day and it came to light that a total of five companies had participated in the tender.
The company explained that the bid documents of all the parties were sent for evaluation to the Tender Evaluation Committee, and later it was learnt that the contract was awarded to Surendra Engineering Corporation Limited.
In light of that the company sought to submit their assessment of the entire bidding and the evaluation process, since the time of tender announcement till the press release announcing the news of Surendra Engineering being awarded the contract.

Double standards…
Fedders- Lloyd said that a letter from the High Commission of the Republic of Guyana made it clear that there would not be any further extension in the bid opening date of the tender. However, through the message dated May 4th, 2012, the Ministry of Health announced that an extension for bids to come in was okayed until June 26th.
The company insisted that the extension violates the stipulation of International Competitive Bidding process.
The company also said that contrary to norms, the Ministry made critical additions, almost
20-25 pages to the tender documents, which is not a standard practice in international tenders all over the globe, and that it “was issued only five days prior to the tender opening date”.
The company said they, however, still adhered to their policy of giving its best techno-commercial offer to the client and abided by this anomaly also, though it was not as per the tender conditions.
Fedders-Lloyd also pointed out that in the pre-bid meeting clarifications, it was mentioned that the Bank Guarantee has to be submitted by an Indian bank but has to have a corresponding financial institution located in the employer’s country (namely Guyana) to make it enforceable.
The company insisted that if the bidder does not satisfy this requirement, the bid documents made it clear that the bid security requirements are not met, it “shall be rejected”.
Fedders-Lloyd said they abided by both the clauses and submitted the Bank Guarantee from Axis Bank of India for USD 500,000 and it was confirmed by the local bank in Guyana, Nova Scotia Bank, also.

Disqualification
“However, as per the bid opening readouts, we noticed that the Bank Guarantee submitted by Surendra Engineering was on the Indian bank letterhead and it was never confirmed by any local bank in Guyana… This outrightly disqualifies Surendra Engineering and makes them a non-responsive bidder in the first place.”
When the bids were opened on June 26th, the bids that came in were: Surendra Engineering-US$18,180,000 (submitted with design); Fedders Lloyd US$17,679,000 (submitted with design after a discount of 23%, discount letter provided); Shapoorji Pallonji -US$42,473,600 (submitted with design); Jaguar Overseas Limited – US$18,650,000 submitted with CD; Vydehi Institute of Medical Sciences and Research of India, US$19,500,000 (no design submitted).
During the bid opening, the company said that they observed that despite their discount letter being attached in the financial bid, the Chairman of the Tender Committee refused to announce the discount letter.
“It was only on the repeated insistence of our representative Mr. Ajay Jha, that the discount letter was finally read out and the discount announced as 23% quoted price, thus making our final price as US$ 17,679,000.”
The Delhi-based company said they have noticed that in various press reports during the last one week, various officials in the Ministry and Tender Committee are claiming that Fedders-Lloyd had quoted two prices.
“…but as a matter of fact, and contrary to the claims during the tender opening, at the same time and moment, both our total price and the discount letter were readout, which clearly makes our price as a single financial bid and the lowest priced bid i.e US$ 17,679,000.”
The company also insisted that it is unaware what government is talking about when it said Fedders-Lloyd has been rejected on ‘Administrative Grounds’.
They said that disqualification was always the technical aspect or the financial aspect, and on both grounds, Fedders-Lloyd was ahead of Surendra Engineering.
Fedders-Lloyd said it participated in the tender process by forming a consortium with NOUS Hospital Consultants, which has expertise in building and commissioning specialized hospitals and which has already commissioned more than 90 hospitals in India and abroad.
Furthermore, Fedders-Lloyd said it has experience in almost 30 countries around the globe in the sectors of education, health, agriculture and power, and with an annual turnover of around U.S. $700M.
“This consortium is definitely a name to reckon with and clearly has enough expertise and experience to fulfill a contract of this magnitude to the complete satisfaction of all. Moreover, Fedders-Lloyd is a public limited company listed on the Bombay Stock Exchange of India having 17 plants/factories in India & abroad carrying a famous “Lloyd” brand since 1943.”