Arising from a number of questions relative to public expenditures on two properties which it has leased for some time in bids to utilised as part of its operational network, Tax Administration Jamaica (TAJ) has sought to provide details of the arrangements and basis for expenditure (lease payments on the two properties.
In a release late on Wednesday afternoon, TAJ said it is placing on record details of the costs of the lease arrangements and the circumstances behind the payments relative to the properties.
Below is the TAJ release in full:
“Tax Administration Jamaica (TAJ) wishes to place on record the costs of the leasing arrangements that are currently the subject of discussions in the public domain based on a recently tabled auditor general’s report.
“Properties were leased in Mandeville, Manchester and the other in Annotto Bay, St Mary in accordance with the GOJ Procurement Policies that require a lease to be in place before commencing the process to procure technical service and to renovate.
“Once the lease is in place, then TAJ is liable to make payments.
“The delay in occupancy is attributed to the lengthy procurement process and build out required to make the space suitable for the delivery of tax services, which in the instance of Mandeville, had to be restarted, and both (procurement processes) are still ongoing.
Mandeville, Manchester
In an effort to construct a one-stop-shop Revenue Service Centre (RSC) in Mandeville, property was leased to accommodate general tax office services currently offered from two locations, South Race Course Road, and audit operations from a plaza at Caledonia Road.
It is to be noted that the current arrangement at Mandeville does not provide the convenience of all the services at a single location, and this has proven to be costly and inefficient to the tax paying public.
“(It was therefore) decided to lease property to conveniently accommodate tax operations currently being done separately.
Procurement Process relating to the Mandeville RSC
The GOJ procurement process requires a signed lease for property before commencing the procurement to engage technical and contracting services for works. The procurement process for renovating the space of the size leased for the RSC operations requires Cabinet’s approval and a consultant to manage the project.
“It therefore means two (2) separate procurement processes (one for the consultant and another for the build-out contractor), which cumulatively can take up to 14 months for completion.
“In addition to the lengthy timeframe for the process, the procurement for the building contractor failed on the basis that four additional contractors in the category which responded to TAJ’s invitation for bids were added to the procurement platform after the expression of interest phase, but before the date for return of bids on August 2, 2023.
“The lease arrangement for this location was handled by the National Land Agency (NLA), with the process commencing on April 13, 2018, with the lease agreement duly signed by the lessor and TAJ, and was completed in September 2020 (30 months).
“The details of the process are outlined as follows:
“Based on the magnitude of the project, the process for buildout (of) the space, occupy and open is more involved in accordance with the GOJ Procurement Policy:
1. Procurement of a consultant to manage the project from concept drawing to occupancy:
a. Invited bids based on the requirements and value (November 17, 2020-February 26, 2021);
b. Preparation for bid evaluation and evaluation process (February 27-May 10, 2021);
c. Clarification and advice from OPPP (May 11-September 7, 2021);
d. TAJ Procurement Committee endorsement of recommended vendor,
Commissioner General’s sign-off on RPGS and standstill period (September
8-November 10, 2021)
e. PPC’s submission and approval (November 23-December 3, 2021)
f. Preparation, reviewing and signing of contract (December 4, 2021-
January 17, 2022).
2. Concept design work from consultant:
“a. (The) consultant met with various stakeholders to gather all relevant information required to prepare concept design drawings to reflect the various process flows and the required configuration (8-10 weeks);
b. Prepared and presented drawing, this meant a number of iterations to satisfy the required work flows and configuration. (at least 8 months);
c. Approval given on the finalized drawing to be used (5 days);
d. Assessed the drawing and determine the cost through a detailed bill of quantity for building out the space (12 weeks);
e. Prepared the requirements to be used in the tender for the buildout contractor (1 month).
Procurement of the buildout contractor who was to carry out the work to facilitate occupancy, would have taken a minimum of 6 months as it goes through the Public Procurement Committee (PPC) and then to Cabinet for approval.
Based on the advice of the consultant, the restrictive bidding method was used.
This involved:
a. Pre-qualification – all registered contractors in this category based on the value were invited to express interest (November 7-11, 2022);
b. Invite bids from those contractors who expressed interest based on the requirements and value (December 7, 2022 – February 3, 2023)
c. Consultant evaluated bid and submitted evaluation report (February 6 –March 10, 2023)
d. TAJ Procurement Committee endorsed recommended contractor, Commissioner General’s sign off on RPGS, standstill period etc. (March 10 – July 7, 2023)
e. Submitted to PPC for endorsement (July 12, 2023)
f. PPC did not endorse on the basis that four additional contractors in this category were added to the procurement platform after the expression of interest phase, but before the date for return of bids (August 2, 2023)
g. TAJ appealed the decision unsuccessfully. In the hope of expediting the process, the opinion of the Office of the Public Procurement Policy Unit (OPPP) was sought, but (it) was advised to pursue the competitive bidding process (August 8, 2023–October 24, 2023)
“On the advice of the OPPP, the competitive bidding process is being pursued and may take another 6 months to engage the contractor. Projections are that the work will take a minimum of 12 months to complete, and indicates September 2025 at best.”
Procurement Process for Annotto Bay, St Mary
“In the case of the Annotto Bay property, a former bank was identified as an ideal building (fit for purpose based on similarities between our operations) to relocate the Annotto Bay Tax Office, which was deemed to be in need of major repairs. Given the location, size and amenities offered, such as cashiering and customer service counters, vault and parking, it was considered well suited to serve the needs of the community and TAJ.
“In considering leasing the property, TAJ utilised a private valuation entity, based on the January 8, 2020 advice by the National Land Agency (NLA) and in keeping with its SOP, for identifying and leasing space.
“The following is the timeline on the arrangement for leasing the space and subsequent activities to retrofit it for relocation of the Annotto Bay Tax Office:
1. Inspection of report done by TAJ’s team to confirm suitability conducted July 20, 2021;
2. Expression of interest was made on August 25, 2021 via letter of the same date;
3. Valuation conducted October 30, 2021. All procurement protocols had to be observed before the valuation surveyor could be engaged, and despite using a private entity, it still took two months to get it done;
4. The lease was negotiated and duly signed December 17, 2021;
5. Upon taking possession of the keys for the premises on January 7, 2022 and entering the space, it was evident that changes had been made to the layout of the space. Consequently, a letter dated February 10. 2022, was sent from TAJ to the owners requesting that the space be restored to its original state.
“In keeping with GOJ Procurement Policy, the process to buildout, occupy and open the space cannot commence until a lease agreement is duly signed. This process that is currently in progress, involves several steps, including preparing, adjusting and finalising architectural drawings that took six months, and were approved April 2023;
“Engagement of Quantitative Surveyor (QS), who assessed the drawing and determined the cost (bill of quantity) for the building out of the space, which took approximately six months; Procurement of the build-out contractor who is to carry out the work to facilitate occupancy, work will commence thereafter, and may take four months at minimum to complete.
“The current situation is that the existing Annotto Bay Tax Office has been closed since the earthquake on November 3, 2023. The 5.6 magnitude earthquake exacerbated the poor condition of the building, and a structural engineer’s report rendered the building unsafe for occupancy.
“Fortunately, TAJ had already leased the new space, and the engagement of the contractor is at the evaluation stage.
“Based on the timelines, the Annotto Bay Tax Office should be open for business at the new location within the second quarter of the 2024/25 fiscal year.
“TAJ remains committed to observing the requirements of the GOJ Procurement Policy as it works to provide suitable accommodations for customers and staff.”
