Dana Wibawa

In the 90s, most government's construction projects were using conventional contracts. Conventional contract means a team of consultants is appointed by the agency to prepare design, tender documentation, conduct tendering process and supervise the construction. The consultants directly report to the agency. Post 1998, GOM started to use Design & Built contract and started negotiated/selective tenders. Since then, newer scheme such as PFI/PPP are used.

Whilst the official reasons or justifications stated for D&B negotiated/direct award were amongst others fast delivery, single party responsibility, special-function building where the contractor chosen is a so-called specialist, security facilities and myriad of other reasons, it has been an open secret within the construction circles that this procurement method is chosen due to the potentiality for political funding and corrupt practices.

Now that the Pandora Box (Pandora papers is another issue) has been opened! It is not a secret anymore. We will now see how the modus operandi by the players when the cases are brought to trial.

Having involved in many D&B projects in the last 20 years, I can vouch that D&B contract did not save so much time; at least in my projects. Typical project still takes 5-6 months for design and 36-48 months for construction depending on the size of project. Perhaps, some savings of about 3-6 months for tender & evaluation stage. This saving (if any) would be wiped out by the EOT anyway! Maybe other justifications stated above could be true; some D&B projects like road works, schools or universities are nothing to shout about.

That was when consultants became subservient to the contractor. Contractor calls the shots, they are the paymaster; instructing consultants on the design aspects to reduce construction cost and increase profits. ?Those recalcitrant consultants holding steadfast his principles on quality of design, would be despised on. As a result, there are many cases where the projects suffered many defects as reported in the AG Report (just google it).?

In one of my projects, the D&B contractor made a hefty 27% margin on the M&E amount (GOM awarded amount to D&B contractor less the M&E sub-contractors’ contract sums). This profit was many times more compared to the consultant’s fees. Had it been a conventional contract, the most he would get was 5% for profits and attendance.

Fees were squeezed to the minimum with a supplementary contract; although on paper to the GOM, they were following the Scale of Fee. Some consultants could not get payment until the GOM came up with a direct-payment directive with an irrevocable deed of assignment. Yet, they never say thank you!

The consultants suffered in silence. These contractors were the taiko with high-tension cables to the political masters. Who wants to listen to the pitiful consultants? Some more, with not much money to throw around.

I do not want to comment on PFI/PPP projects yet. Surely there are many skeletons in the closet.

Where do we go from here? Now that everything is in the open, it is time to go back to the fundamentals.