The Auditor General found no “smoking gun” in his special investigation into the controversial Berkeley project, Government Senator claimed yesterday.

But Opposition Senators questioned when the school - due to be open in September - would be finished and said Government had put the Island's schoolchildren at risk by handing the contract to unproven contractor Pro-Active.

And they accused Government Senators of performing an about-face when they said they welcomed the report after Auditor General Larry Dennis had come under a fierce attack from Works Minister Alex Scott in the wake of its publication.

Mr. Dennis released the report last November and raised concerns over the fact that the Cabinet overrode technical officers recommendations that the contract not be awarded to “high risk” Pro-Active and over a lack of documentary evidence that a $700,000 performance bond had been paid.

Government Senate leader David Burch said:“The fact that Pro-Active did not have a track record as a company was self-evident.

“That argument can be equated to circumstances in life and it was not a reason not to give them a chance.”

But Opposition Sen. Leonard Santuccisaid:“How long will it take to (finish) this project,” he asked. “It affects hundreds of children and hundreds of families.”

Sen. Burch said he thought it was a good report and a commendation for the Ministry of Works and Engineering, which is responsible for the controversial development.

And he said there had only been one recommendation to come out of it, which was a that the Education Ministry be informed that the school would not be ready on time.

He said: “The only recommendation was that the Ministry of Works and Engineering needed to inform the Minister of Education when the project was likely to be completed.”

Sen. Burch said he was pleased with the overall conclusion in the report that the staff of the Ministry of Works had handled the tendering process well. He said Ministry staff were not criticised in the report written last year by Auditor General Larry Dennis.

Sen. Burch said Mr. Dennis reported the staff had handled the day-to-day administration of the contract well and had maintained adequate records and controls, but he admitted the report had raised concerns that some of the payments made to general contractor Pro-Active Management Systems Ltd. appeared generous.

Sen. Burch said he agreed with Mr. Dennis that there had been advantages and disadvantages of awarding the contract to Pro-Active - which was a little known company with limited experience when it won the contract in May of 2001.

But he said: “The fact that Pro-Active did not have a track record as a company was self-evident. That argument can be equated to circumstances in life and it was not a reason not to give them a chance.

“It is like saying we (the Progressive Labour Party) as a political party, had no experience because we had never been in power before, and so, did not deserve a chance to run the country. I am not surprised by that statement - that has been the legacy of the previous Government.”

Sen. Burch compared the lack of experience factor to students returning from university looking for work, and said the previous Government had told them they could not gain employment because they did not have experience.

“We welcome students coming back from university to gain experience with us - otherwise where else will they gain the experience?”

Sen. Burch noted that BermudaTech - the construction firm that bid the lowest for the senior school project and whose workers marched on Parliament in protest at not winning the deal - went bust less than a year after Pro-Active won the contract.

“It seemed a whole lot hinged on keeping firms afloat,” he said. “It seems to be an obsession with creating difficulty.”

Mr. Dennis said some of the recommendations from technical officers had not been accepted by Government and Pro-Active had been selected as the contractor, even though Ministry experts recommended that the contract be awarded to BermudaTech.

Sen. Burch claimed Mr. Dennis contradicted himself by claiming in the report that all payments to Pro-Active had been properly processed and approved, only then to say in the next paragraph that his examination of monthly payments had revealed that some payments were not strictly in accordance with contractual requirements or had exceeded amounts given by the quantity surveyor.

Sen. Burch said: “That was an individual oversight by Pro-Active, but what I do have a problem with is that it seems to be a contradiction.”

Opposition Sen. Leonard Santucci said Sen. Burch's comments were an “about face” on previous statements made by the Government, because several Ministers had been highly critical of Mr. Dennis.

He said concerns over Pro-Active were not over the company's inexperience, but over how the contract had been awarded, adding: “That's politics.”

“How long will it take to (finish) this project,” he asked. “It affects hundreds of children and hundreds of families.”

Sen. Santucci said the delay in the school was “at the country's peril”, and he complained about the late discussion in the Senate on the Auditor's report, which had been released last November.

Sen. Santucci said there were risks involved in giving the contract to Pro-Active that may have put the project at risk.

He said: “They (Pro-Active) have never to my limited knowledge been involved in any major construction, which is running in excess of $70 million and very near $100 million.

“You say the media is the UBP (United Bermuda Party's) rag, but the Government plays hide and seek, claiming to be acting in the interests of the people.

“And when something is wrong, you kill the message and you kill the messenger.'

Pro-Active was rated as a high risk by technical officers, he said, adding: “I ask - when does the Government listen?”

Sen. Calvin Smith (PLP) interjected that Government did not have to act on the recommendations of technical officers if it believed other social factors could be considered, instead, such as giving a contract to a particular firm in a bid to share around the wealth.

Sen. Santucci retorted: “I want to know who is paying the bill.”

“There will always be questions. Questions with reference to the awarding of the contract.”

Sen. Santucci said it was unusual not to take advice from experienced technical officers when they were making recommendations, particularly on such a big project.

He said it was not just an issue of time with the delayed project, but there was also the issue of the performance bond, which is put in place by a sponsor of the general contractor, in this case Union Asset Holdings Ltd., to act as a cash guarantee should the project go awry.

But Mr. Dennis raised concerns in his report about the authenticity of the bond, and said it had been put in place 11 days before the Bermuda Industrial Union had actually formed Union Asset Holdings Ltd. for the sole purpose of acting as the guarantor.

And Mr. Dennis said requests for the original copy of the bond had never been received by his office, and that he had also never seen a receipt for the $700,000 premium Pro-Active had to pay to Union Asset Holdings in order to get the bond in place.

This was despite Government willingly reimbursing Pro-Active for the $700,000 it was supposed to have paid out.

Minister Alex Scott has repeatedly said the bond was in place and could be called upon, and claimed it was not normal for Government to ask for a receipt once the premium had been paid.

He said all Government was interested in was knowing that the bond was active.

“Are the people of Bermuda adequately protected?” asked Sen. Santucci. “And is the performance bond financially able?

“Anyone else would call this mismanagement. It's like building a house upon sand. Sooner or later it will take a licking and then fall. And the people will be stuck paying the bill.

“How much will I have to pay for your foolishness?”

Sen. Santucci slammed “a deplorable lack of communication” in Government, saying Mr. Scott was still saying that the school would open on September 4 of this year.

And Sen. Santucci questioned whether the Minister of Education and Development Paula Cox knew that she would be sending the children down the hill to the old Berkeley Institute.

He said: “In the report, printed in October, Pro-Active stated that the project would not be finished until January 2004.”

Sen. Jeanette Cannonier (Ind) praised the report, but complained that the Senate should not have been made to wait eight months to debate it.

“I am sure there have been many changes since then,” said Sen. Cannonier.

“I say you are looking at a mammoth project. The wealth of supplies that need to come in from overseas and the completion date has had to be revised by an extra four months.

“I think we need some up to date information as to where the project stands.”

Sen. Neville Darrell (UBP) said a $68 million project carried a heavy risk and the Government had put the responsibility of educating the Island's children on an unknown company.

“The high risks that some may see as anomalies is not remarkable, but what is remarkable is that this report was printed out in October and it is just now being debated. We need to be have relevant updated information.”

Sen. Darrell said Government's reasons for choosing Pro-Active were still not clear.

“There doesn't seem to be a collective mind as to why this particular builder was chosen,” he said.

Works Minister Alex Scott said the contract was awarded on merit, while Tourism Minister Renee Webb said it had to do with some form of affirmative action, he said.

Government Senate Leader Kim Swan characterised Government's public statements as “double speak” and “collective hypocrisy”.

“Are we to expect that when the Government wants to put a political spin on a situation, the private deliberations of the Cabinet will be carried on outside the Cabinet where two Cabinet Ministers are at variance on the issue,” he asked.

The concept of collective responsibility had been brought “into disrepute,” he said. And he questioned whether the completion bond for the project still existed.

Senate President Alf Oughton pointed out that the Auditor General had seen the bond and was trying to determine whether the company existed before it was put in place.

Sen. Swan said that like others, he wondered what the completion date of the project would be.

Mr. Scott still said the project was on schedule, he said.

“What schedule ? Is it the six-month delay schedule?”

Government was misleading the public with attempts to reassure the public that everything was all right with the project.

“All is not well. We've had situations where workmen have not been able to get their pay cheques.”

The project had been behind schedule “from the get go” because steel specifications had to be redrawn, he noted.

“What we need to know is whether the contract is still enforceable with all these changes.”

Sen. Swan slammed Bermuda Industrial Union president and Government backbencher Derrick Burgess for his criticisms of the Auditor General shortly after the report was published.

Sen. Burch said the comments were made as a president of the Bermuda Industrial Union, not as a Government MP.

“When is an MP not an MP ?” retorted Sen. Swan.

“An MP makes a statement that is offensive and derogatory and the Government says he had on a different hat. Irresponsible political statements cannot be passed on to a different hat.”

He claimed Works Ministry staffers were fearful for their jobs and had been used “as political human shields”.

Sen. Michael Scott (PLP) said the report had not produced a “smoking gun” and questioned why the Auditor had decided to conduct the probe.

“What is all this fuss about?” he asked. He said the Country had undertaken a number of projects that had not been put under the Auditor's microscope.

He said: “To be as charitable as I possible can to the Auditor and his staff, in looking for a basis for his activity it comes down to the performance bond and that too sticks in my craw... and he has found no smoking gun.”

He said a bond would have been difficult to obtain given the timing involved. “I think it ought to be commended that people of goodwill and resources came to the wicket.”

The report had given the project a clean bill of health besides the “narrow concern” of the performance bond.

“This report goes far beyond its mandate and is entirely wrong to call for disclosure of Cabinet discussions.”

Sen. Scott questioned why the civil servants had chosen BermudaTech as their first choice for the contract. The company went bankrupt months later - proving the consequences would have been disastrous if it had been chosen.

The recommendations of civil servants could not supplant Cabinet decisions, he said, and Government had “pulled no punches” when it announced the reasons for its final decision.

The argument that Pro-Active had no track record was “entirely specious” because the principals had a “wonderful track record”.

“They simply organised themselves into a company, which one does when you get into the game at this scale,” he said.

“I take it that BermudaTech would have given the Opposition members some comfort, yet as they spoke, BermudaTech was hurtling toward Chapter 11. Where would we have been had they taken the job ?”

Sen. Oughton said Sen. Scott was wrong to question the motives of the technical officers and said the Auditor had made it clear that the report was done because of public discussion.

Sen. Calvin Smith (PLP) and Sen. Victoria Pearman (PLP) agreed the report had produced no smoking gun and that it vindicated Government's handling of the project.

“There's a lot of people who think it's high risk to hire someone like me even if I went to Harvard,” said Sen. Smith in response to the Opposition's criticism. The decision to give the contract to Pro-Active was “an excellent example of collective responsibility overriding the technical officers”, he said.

“Cabinet said ‘no' as any good people-centred Cabinet does.”

The public controversy had clouded the fact that Government was responding to public concern by building the new school, said Sen. Pearman.

“No matter what is said and done, nobody can criticise this Government's commitment,” she said. “No one can doubt that this Government is committed to doing what previous regimes have ignored - to provide a first class education system...

“This Government makes no apologies whatsoever for standing by this project in all its facets. This project goes to the heart and soul of what this Government stands for.”