BOST extends TSL Logistics' terminal management contract without PPA approval – Report

The Bulk Oil Storage and Transportation Company Limited (BOST) extended its terminal management contract with TSL Logistics (Ghana) Limited without the approval of the Public Procurement Authority (PPA), the 2021 report of the Auditor-General has revealed.

Section 40 of the Public Procurement Act, 2003 (Act 663), as amended, provides that a procurement entity may engage in single-source procurement under Section 41 with the approval of the Board where the procurement entity has procured goods, equipment, technology or services from a supplier, contractor or consultant because of standardisation or compatibility with existing goods, equipment, technology or services taking into account (i) the effectiveness of the original procurement in meeting the needs of the procurement entity. (ii) the limited size of the proposed procurement in relation to the original procurement. (iii) the reasonableness of the price. (iv) the unsuitability of alternatives to the goods or services in question.

However, the audit team said: “We noted that BOST requested an extension of the Terminal Management Contract between BOST and TSL Logistics (Ghana) Limited in a letter referenced BOST/SCR.35/PPA/30171 and dated December 19, 2019, to which approval was granted by the Public Procurement Authority (PPA) with the reference PPA/CEO/01/57/20 and dated January 20, 2020, to cover a period between December 31, 2019, to March 31, 2020, at a cost not exceeding US$300,000.00”.

“However, upon expiration on March 31, 2020, the management did not obtain prior approval from PPA for the additional contract extension period of six (6) months at the cost of US$1,800,000.00 of which TSL was still engaged for their services”, the report said.

The audit team said the management’s “disregard of the procurement law caused the anomaly”.

“The anomaly undermines the integrity of the contract between the parties, and this is a breach of the fundamental principles upon which single-source procurement is granted, as specified under Section 40 of the Act", the report added.

“We recommended that the management provide the audit team with justifications leading to the contravention and further write to PPA in accordance with Section 90 of Act 663 as amended failing which the offences relating to procurement under Section 92 shall be applied to the officers who authorised and sanctioned the transaction.”

The report added that the management of BOST said: “Notice is taken of the recommendations and steps have been put in place to ratify this by 2022”.

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