Contractors face greater scrutiny

 IT IS worth noting that acting Works Secretary David Wereh has directed his project managers to undertake first quarter reviews and provide reports on all infrastructure projects.

The focus of the reviews is to assess project implementation against plans.

Among the key questions for project managers to consider is one that concerns the performance of contractors.

Are all contractors and consultants in place and are they performing?

This has been a contentious issue for the Department of Works and Implementation (DoW) since it was given the mammoth task to rejuvenate the Government’s infrastructure sec­tor programme with a Budget allocation of K2.7 billion for this year.

The department is now taking strong action to ensure the performance of infrastructure consultants and contractors are measured and recorded to, among other things, ensure that taxpayer monies are not wasted on contracts.

According to Wereh, there are several examples of poor contract performance by contractors and the department was now undertaking action to terminate several contracts. 

“While there are potential negative implications, the per­formance has been poor and action must be taken. To ensure that the department is in a strong position, it is important that it has in place a robust contractor performance measurement system.”

Indeed, many countries and their governments measure contractor performance and use past performance information in their selection processes.

Many lessons have been learned that recording a con­tractor’s performance information periodically during the contract and discussing the results with them is a powerful motivator for contractors to maintain high quality performance or improve inadequate performance before the next tender.

Current performance assessment is a basic “best practice” for good contract administration, and is one of the most important tools available for ensuring good contractor performance.

Prime Minister Peter O’Neill recently said that “Government contractors that failed to perform or only carried out sub-standard work on major projects would not be given another project. The department says prospective contractors must have a satisfactory performance record in order to do business with any government department and agency.

The use of part performance as a major evaluation factor in the contract award process is instrumental in ma­king best value selections. It enables agencies to better predict the quality of, and customer satisfaction with, future work.

“There are some doubts that contractor performance is being consistently measured and recorded, and I have now issued directions to ensure that the performance of DoW’s infrastructure contractors and consultants is consistently measured and recorded,” Wereh says.

To help in considering the issue and more fully applying this key qualification requirement, DoW has had developed a short paper to guide the development of its infrastructure contractor and consultant performance measurement system.

The paper provides comment on how performance can be scored and the information used. A DoW working group has agreed to engage a consultant to develop a procedure to improve contractor performance, review and update the DoW contractor administration manual and deliver contract management training to DoW officers to ensure all projects are properly managed.The working group is supported by the Department of Transport, National Roads Au­t­hority, Infrastructure De­velopment Authority and international development partners, including Asia Development Bank, PNG-Australia Transport Sector Support Programme, Japan International Cooperation Agency and the World Bank.

It is encouraging that DoW will no longer readily accept variations of project pricing by contractors. This bad practice of the past has seen large amounts of public money being wasted.

Wereh is adamant that any variations of contract pricing will now come under intense scrutiny. Under Wereh’s watch, DoW has refocused and re-strategised to ensure that it walks the political talk. 

If all goes well, 2014 will indeed be a year of implementation for DoW.