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Awarding contracts at lowest prices gateway to bid rigging

Dealings in some of the tenders raise many questions

KUWAIT CITY, Aug 10: After years of implementation, it has become necessary to reconsider the condition of awarding contracts to the tenderer at the lowest prices, as stipulated in the Central Tenders Law, given the negative repercussions recorded sometimes through the application of this condition, reports Al- Qabas daily. The evaluation of bids is done through two systems.

The first is to submit two technical and financial envelopes for the tender, and the technically acceptable offers are determined and arranged according to grades obtained by each bid, then the financial offers are opened to only those who are technically acceptable and evaluated. An equation is made, based on which the order of bids is determined, and often, the owner of the lowest financial offers from the technically is accepted. As for the second system, which is applied in all Kuwaiti tenders, bids are submitted through the one-envelope system that includes technical and financial offer.

The lowest bids are financially studied from a technical point of view and an appraisal budget made to ensure that prices are appropriate for all items. Informed sources said the awarding process sometimes pushes the authorities to accept offers that do not often achieve the desired goal of the tender, with the required efficiency.

The major problem is that it often plays the major role in the technical committee of the relevant sector. In light of the price burning operations, and despite the tenders law permitting some contracts to be awarded at a value less than the estimated cost, according to the adequacy principle and opinion of the technical committee, the dealings in some of those tenders raise many questions about how various items listed in the contract are implemented, including the process of floating bid for an amount less than one-third of the estimated value of the tender.

According to sources, many of the problems in tenders – especially those related to operations and maintenance that require the purchase of a lot of materials, surface after the period of its inception due to challenges the contractor faces through low tender price in general and high price requirements, while different items demand heavy spending.

This opens the door to the issuance of variation orders to compensate for the difference, besides purchasing non-original spare parts, supplying insufficient quantities or carrying out substandard technical works to escape the dilemma of high contract cost, given that no contractor wants to lose and the idea of making profits is inevitable to ensure that the company continues to operate. The same sources pointed to the problems of those types of contracts in which what can be described as “price burning” occurs in the form of sudden technical defects, stumbling in implementation and delaying completion ratios. In some cases they may be covered up and the problems only become clear if the administration supervising the contract itself is changed.

This is what actually happened in one of the contracts when those in charge were referred to prosecution several months ago, after the contract awarded at a discount rate of 65 percent caused the contractor to neglect the implementation of many listed items. Some countries rely on study conducted by a specialized insurance company to support the vision of the contract owner in determining the acceptable value of the award by which the competing offers are evaluated

‘LOYAC Kuwait’ takes part in program

Immediately after the tragedy of the explosion that befell the Lebanese capital, LOYAC Lebanon Foundation responded to the call of humanity, and led the ‘Beirut Awake’ campaign with the participation of tens of youth volunteers, reports Al-Seyassah daily.

The volunteer campaign was launched with the cooperation and support of ‘LOYAC Kuwait’ to provide quick and immediate assistance to the victims of the Beirut Port explosion, while under the umbrella of the ‘Homes’ emergency program, a group of volunteer youth teams were formed to confront the disaster, developing a clear practical plan for each team.

Under the plan, the ‘Control’ team undertook operations to find appropriate and quick solutions such as finding and providing suitable homes to accommodate the affected people, while the hospital and public facilities assistance team took care of cleaning up the traces of destruction

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