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Panama’s Underbidding, Overcharging Carousel


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OPINION: Panama’s Underbidding, Overcharging Carousel

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Posted 02/10/2019

Hiring with the State is the regular course of many companies, some with a good compliance history, and others, with a truly questionable track record. The new government of President Cortizo has had to face projects from previous administrations, which in one case have needed, for now, six addenda to see if they comply. We are attending a carnival of addenda in which both the delivery time and the price of the works have had to be changed.

In other words, the bidding by these companies in terms of prices and delivery of the work has been breached. Flexibility over addenda represents a reason why public procurement legislation should be reformed. How is it possible for a company to win a tender, usually with the best price, Then negotiate cost overruns? This puts other bidders who offered real prices and timely compliance schedules at a disadvantage. The prevalence of live play means that not only the patrimony of the State is squandered, but also that human lives are affected by the lack of hospitals, or by road networks in poor conditions. Until when will this ordeal last? - LA PRENSA. Oct 2

 

https://www.newsroompanama.com/opinion/opinion-panamas-underbidding-overcharging-carousel

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I remember my former employer commenting, after the Spanish consortium had won the Canal expansion contract with a $3.2 billion bid, that the project "can't be done for less than $4.8 billion". I am not sure that anyone has the total real accounting for the project, but I believe it has easily exceeded $5 billion. That's an age-old strategy for winning bids. There are projects that get done as budgeted, and IMO they usually share the same features, i.e. all engineering is complete before the first spade of dirt is turned, there are no new untried technologies made part of the project, there is an experienced watchdog contractor on the owner's side responsible for evaluating bids and then for tracking the project's progress, and there are incentives/penalties in the contract for budget and schedule milestones.

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