NAO: Preparation of BOQ by Non-Engineer Attracted Additional Cost of Over D175 Thousand

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By: Kebba AF Touray

The National Audit Office (NAO) has revealed that the preparation of Bill of Quantity (BOQ) by a non-engineer has resulted in an additional cost of D175, 450.75 in hiring a consultant for the tourism Ministry’s Eco Lodges Project.

The NAO revealed this in its management letter on the audit of the eco-tourism camps and lodges while reporting on the absence of engineering and legal personnel in the contract committee segment of the said management letter

“The BOQ prepared by a non-engineer has resulted in an additional cost of D175, 450.75 in hiring a consultant in the midst of finalizing the contract to negotiate the price and establish new estimates of the project,” the NAO Reported.

The NAO explained that section 30(1) of the GPPA Act states, “A procuring organization is responsible for the administration of procurement contracts into which it enters and shall establish procedures for contract administration and provide the necessary material and human resources for their implementation.”

2003 GPPA Regulations section 121(1) states, “Procuring organizations shall establish and provide the staffing necessary for the operations involved in contract administration as described in the Instructions. Those include, but are not necessarily limited to engineering and design services, providing design and monitoring functions for preparation and implementation of procurement contracts; financial control and payment services; management information systems for co-ordinated processing and communication of and access to relevant information by all parties involved in contract administration, including document control services, for establishing and maintaining filing systems for correspondence and other paperwork and records relating to procurement contracts; and legal services.”

NAO stressed that the Bill of Quantity (B.O.Q) is required to be prepared at the initial stage of the contract preferably by an expert in order to give a standard budget and to also serve as a buffer when selecting and scoring bidders.

The audit team noted that the BOQ used by the GT Board for the budget allocation and scoring of bidders for the Eco-Lodges project was not prepared by an engineer contrary to the aforecited section of the GPPA.

The audit noted that an engineer was hired only at the price negotiation stage and did not take part during the evaluation process. In addition, the BOQ was generic and did not include specifications of the eco-lodge concept.

The audit stated further that there were no legal personnel in the contract committee to advise on legal matters even though GT Board has in-house legal officers which suggests that the contract document was not subjected to legal scrutiny.

According to the audit, there is an increased risk of wrong cost estimates of the contract which could result in sub-standard work as well as delay in the completion of the project especially when the cost is understated.

The audit added that the implication also includes that appropriate selection of the bidders will be difficult if the estimated cost of the projection is accurate, an absence of a legal person within the contracts committee can lead to inadequate, scrutiny of the content of the contract resulting to adverse legal implication and potential financial loss in the event of a dispute.

The NAO recommended that the GT Board management should ensure that GPPA Act and Regulations are fully adhered to at all times in ensuring that the BOQ is prepared by an expert.

“We recommend that a representative from the legal department of GT Board be part of the evaluation team for future contracts. This will help ensure that the content of any contract document is thoroughly scrutinized. This will also be useful for the contracts committee to prepare a standard BOQ as well as a realistic budget for the overall project,” NAO recommended further.

Management in its responses replied that they always ensure that the GPPA procurements Rules and Procedures are followed at all times and they always seek prior advice from them on complex procurement-related matters.

“We agree with the query where you mention the absence of a legal officer and an engineer in the Contract Committee,” the Management replied.

However, the management said the Director of product development had a vast knowledge of Ecotourism and sustainable tourism and the reason for the department taking the lead on the project.

“Several meetings were also conducted between the independent engineer (Mahfous Engineering) and the contracts committee wherein evidence of minutes of the meeting was provided to the audit team during the audit review exercise,” said Management.