The following is a statement from the Gleaner Company in response to Government criticism of its handling of the primary schools textbook project.
THE GLEANER Company had, before now, avoided going public on the controversy surrounding the award of the 2003/2004 contract to an overseas company, Von Hoffman Inc., as we were directly involved in the bidding for this contract and we did not consider that it was a good idea for us to be judge in our own cause.
However, our performance over the 16 years we were awarded the contract, has recently been brought into question in both Houses of Parliament and we think we should now set out the facts.
1. History & Past Performance of Primary School Textbook Project
a) We are proud of the part we have played in getting the textbooks printed in Jamaica. Our Company came up with the idea of printing these books on newsprint in 1984 and we got the project going that year with the support of the Ministry of Education, the Private Sector Organisation of Jamaica and various bilateral and multilateral funding agencies. We were able to print the books at a fraction of the imported cost and enabled the Government to provide a book for every child.
b) Past Performance
It is simply not true to say that the Gleaner Company consistently delivered the textbooks late. For the previous year 2001/2002 the target date for completion was September 30.
The contract completion date was extended in order to accommodate the printing and distribution of additional books requested by the Ministry of Education and to save on delivery costs. All the schools excepting those in the Christiana/Spaldings area were delivered by Friday, September 28, 2001. The delay was due to inclement weather which prevented delivery until Tuesday, October 2.
2. Contract 2002/2003
a) Delivery For 2002/2003 the contract was awarded very late by the Ministry of Education and as a result was broken down into two delivery phases:
September 3 to 30, 2002 and November 4 to 29, 2002. Up to September 30 the company had delivered 27 of the 42 titles, and we were, up to then, on schedule to complete the contract on time. For the second phase, all but two titles were delivered by December 7. These two titles were fully delivered by March 2003. These two titles were late due to mechanical problems experienced by our local sub-contractors. We paid the financial penalty of $385,016 for the late delivery and are truly sorry for the inconvenience it caused the schools.
b) Dumped Books 2002/2003 This most regrettable and extraordinary occurrence was clearly a breach of our instructions and could only have been influenced by external considerations inimical to the interest of the Gleaner Company. The delivery contractor presented forged signatures as evidence of delivery. For the past 16 years, the Gleaner has had a good record of delivering the full requirement of books. The number of books said to be dumped was 20,000 (less than one per cent of the 2.1 million books produced), and these were fully paid for by us.
c) Negatives requested for Von Hoffman Inc. The Gleaner Company did not refuse to make available the negatives of the books. The fact is that letters were exchanged between the Ministry of Education and the Gleaner Company but no formal negotiations ensued. We, like other successful bidders in the past, had to produce our own negatives.
3. 2003/2004 Contract
a) Bid Price Von Hoffman bid $51.7 million and we bid $54.98 million in January 2003 for the 2003 contract a difference of $3.28 million.
In April when the Ministry of Education requested us to extend our bid for a further 30 days, we confirmed we would at the same bid price despite devaluation of the Jamaican dollar.
We lost the contract on the basis of the bid cost and we consider that there should be no variation to the terms of the contract at this stage.
Further, on examination of samples of the books printed this year it was noticed that colour requirements for some of the titles were missing and this is not in accordance with the technical specifications in the contract.
b) Loss of local jobs and taxes We have estimated that the loss of revenue to the island from awarding the contract abroad would be about $15 million. This would be reflected in wages and taxes. Small printers and their workers have been badly hit, as about 56 per cent of the work of printing and binding was subcontracted out to them.
As far as taxes are concerned, the Government will suffer from a loss of PAYE on wages, customs charges on raw materials and company tax. We understand that no taxes were paid on the textbooks brought into the island by Von Hoffman Inc. If this is so then our company and other local printers would have been placed at a distinct disadvantage to Von Hoffman Inc. as we would have had to pay customs charges on raw materials of over $1 million.
There was at one time a policy of Government that a contract would be given to local companies rather than foreign companies if (a) the local cost was not more than 15 per cent above the imported cost and (b) the quality and service was comparable. This policy has apparently been discontinued.
Finally, it would be a grave injustice to local printers, to re-open the contract price now to allow Von Hoffman Inc. to obtain a higher price than they bid.
Apart from the loss of revenue suffered by the island from awarding this contract abroad Von Hoffman Inc. benefited by not having to pay any penalty for failing to produce some of the books to specification (we had to produce to specification) and did not have to pay local taxes on the books they produced (which we had to pay on raw materials etc.
Over the years local printers quoted and got paid on what they had bid, despite devaluations. We hope the above sets the record straight and put the statements made in perspective.
