More worries with police car contract

Security ministry could be heading to court to end deal with Obrien's

Senior staff reporter

Thursday, January 18, 2018

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CONTROVERSY over Government's contract with Obrien's International Car Sales Limited has deepened, with the court battle, which National Security Minister Robert Montague alluded to when he answered questions on the deal in Parliament, now seems certain as the dealer has reportedly refused to exit the contract.

Obrien's is reportedly disputing how much of the Government's $213-million deposit on the contract sum the company should repay, Permanent Secretary Diane McIntosh told the Public Administration and Appropriations Committee (PAAC) yesterday.

She explained that the ministry had called on the advance bond to reclaim the full sum after Obrien's allegedly failed to give an account of exactly how the $213 million had been spent. McIntosh informed the House committee that the Government had now “partially terminated” the contract and is solely focused on getting the 62 vehicles, and recouping the deposit it paid to Obrien's.

But it appeared that the company could fight all the way. “There is a dispute as to paying back this amount and how much is to be paid, and the Solicitor General's Office has been asked to take conduct of this case on our behalf,” McIntosh stated.

The permanent secretary said that consequent on new arrangements coming out of a December meeting the supplier had agreed to, and been issued a purchase order to deliver within 15 days, the 62 vehicles that are on the wharf.

In the meantime, the Government has agreed to pay Obrien's $42 million more on the cost of the vehicles as it had gone ahead and sourced 2013 to 2015 vehicles and not the 2012 models originally agreed. The vehicles were supposed to be delivered by December 20 last year, based on this arrangement.

Four of the 66 units which were tied up since last year in the quarrel over who should pay the applicable taxes have now been delivered. McIntosh insisted yesterday, as she did at the November 29 meeting of the PAAC, that the security ministry would not be accepting liability for the $34 million due in taxes, noting also that Obrien's had now accepted liability on the duty for the motor vehicles.

However, a letter from Obrien's did not specify whether that liability was for the first batch of 30 vehicles which were delivered last June or the 66 that were on the wharf.

Yesterday, the procurement director in the ministry, Milton Morrison, insisted that there had only been a 10 per cent overall increase, but committee member Fitz Jackson (Opposition) argued that the $42 million on just the 66 vehicles – which was originally anticipated to cost a total of $109 million — amounts to a 38 per cent increase on those units, as the variation only applied to the 66, and did not include the first batch of 30 which was already delivered last June.

North Western Manchester MP Mikael Phillips (Opposition) argued that the ministry had not done proper due diligence. “If it was done you would not have got a shipment now where the bulk of the vehicles are not 2012 models. The contract allows you to vary, but you made a request for 2012 vehicles… you would have realised that 2012 used cars would be next to impossible to be found and that was why the supplier is supplying vehicles outside of 2012,” Phillips said.

Chairman Wykeham McNeil also reiterated that the situation had become fraught with the same dangers which the Opposition had warned of when National Security Minister Robert Montague announced the Government's plan to purchase used vehicles for the police.

The ministry has also made a final demand on the $42-million performance bond, which has a January 19 expiry date. However, the Permanent Secretary explained that Obrien's had received an unsolicited extension from its banker, which gives the company up until the end of January to respond. “By that action we would expect that the vehicles should be cleared and delivered by that time,” she said.

The Government last January awarded a contract to O'Brien's for $426.9 to supply 200 used motor vehicles for the Jamaica Constabulary Force.

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