Eyebrows raised as chairman’s company bags millions in contracts
Officials at HEART/NSTA Trust have been wrestling with conflicts of interest claims over the award of millions in contracts to a technology company whose CEO is the State’s multibillion-dollar training agency’s board chairman. Edward Gabbidon, the...
Officials at HEART/NSTA Trust have been wrestling with conflicts of interest claims over the award of millions in contracts to a technology company whose CEO is the State’s multibillion-dollar training agency’s board chairman.
Edward Gabbidon, the CEO of SynCon Technologies, has been serving as chairman of the Trust since April 3, 2017, and was last month reappointed for another term by Prime Minster Andrew Holness.
For the period of his chairmanship, Gabbidon’s company has won at least eight contracts, worth approximately $38 million, according to the Integrity Commission’s quarterly contract report.
SynCon is a 27-year-old IT consultancy firm that has been supplying cloud, wireless and cybersecurity services, among others, to HEART from as far back as 2013. These services are not unique to the company, an official there admitted.
However, it has not always been smooth for HEART’s procurement officials, some of whom have had serious discomfort with the agency inviting SynCon to bids, a Sunday Gleaner probe has uncovered.
In 2020, the procurement committee voted against awarding a $2-million contract to SynCon, which was selected for the provision of Fortigate Firewall appliances at three HEART locations, claiming that there was a “conflict of interest”.
Flagged in 2019
It started with a December 9, 2019 email from Marsha Whyte-Fletcher, the chief accountant and chairperson of the committee, to the procurement director, William Malabver, seeking guidance on whether SynCon’s submission constituted a conflict of interest.
She pointed to Section 42 of the Public Procurement Act, which states that a procuring entity “shall exclude a person, firm or entity from procurement processes if the person, firm or entity has an unfair competitive advantage or a conflict of interest that is likely to impair the integrity” of procurement processes, and HEART’s Code of Ethics Handbook.
The code adopted the definition by the National Contracts Commission (now Public Procurement Commission), which said a conflict of interest was a situation where a “public officer has a private or personal interest sufficient to appear to influence, or to appear to be capable of influencing, the objective exercise of his official duties”.
Whyte-Fletcher queried whether Gabbidon had submitted a declaration of interest.
The issue dragged on into 2020, with The Sunday Gleaner so far unable to determine how the issue was settled, although the Integrity Commission’s quarterly contract awards update did not include any reference to SynCon being awarded the contract.
Whyte-Fletcher wrote again on January 14, 2020, this time to Desrine Pearson, HEART’s most senior lawyer, and with more details about the process.
It was revealed that SynCon was among three suppliers that the agency invited to bid but came out on top because it was the supplier with the lowest cost.
She wanted to find out whether the lawyer had Gabbidon’s declaration of interest statement because the procurement committee, at a January 9 meeting, “was not satisfied” that the statement of affiliation provided was “sufficient” to override the procurement law.
Pearson replied on January 27 that she did not have the form and that she could not comment on the statement of affiliation before seeing it.
A week later, on February 4, Whyte-Fletcher sought an update from Pearson, who responded that she was still awaiting the two documents.
In a subsequent email to Malabver on February 11, Whyte-Fletcher informed the director that at a meeting five days earlier, the procurement committee voted to abstain from endorsing SynCon’s submission.
“This is due to the fact that there is a clear conflict of interest,” she said, again citing the law and the agency’s code of ethics.
The procurement committee was also bothered that HEART was “still inviting SynCon Technologies to limited tenders while this matter was being deliberated”.
“We are recommending that the procurement department have dialogue with the cost centre who usually request the goods/services offered by SynCon Technologies be made aware of this preserved conflict of interest and guidance be given on how to proceed with future procurement,” Whyte-Fletcher continued.
In his February 24 response, Malabver directed six questions to the agency’s lawyer for the provision of legal guidance.
One of the questions revealed that the board chairman signed one of his company’s tender documents that was submitted and which the director questioned should disqualify SynCon.
He also wanted to know, among other things, whether the declaration of affiliation and interest form signed by the Gabbidon was “sufficient” to treat with conflict of interest and whether going forward, HEART should continue to invite SynCon to participate in restrictive or national competitive bids.
The outcome is not clear and Sunday Gleaner questions submitted to HEART on the processes surrounding SynCon contracts and others asked of Gabbidon are yet to be answered.
HEART explained that it needed more time to provide a response, while last Thursday, Gabbidon said that he would reply in “due course”.
Audrey Sewell, the permanent secretary in the Office of the Prime Minister, where HEART is based, said she will have to seek a report from the agency as she was learning about the issues from this newspaper for the first time.
“I’ve never had any concerns expressed whether inside the organisation or outside the organisation to my office. Nothing has ever come to my attention,” she said.
Representatives from two of the country’s top technology service providers declined to speak on the issue, while a third expert, requesting that his name be withheld because of his “business interests”, said “the optics are not good” even if Gabbidon declared his interests.
“I think there’s a difference if you are the board chairman versus being a regular board member. Some distance is needed and that could mean losing out on some money, but the services are not exclusive,” said the cybersecurity professional.
“SynCon is a good company. It’s an unfortunate situation that somebody should have flagged from the start. Even if other providers had a problem, it wouldn’t have been a public issue once everybody getting part of the pie,” he added.
The Jamaica Accountability Meter Portal (JAMP) and the National Integrity Action (NIA) – two of the leading transparency and anti-corruption lobbies here – say Holness and HEART have questions to answer.
“That the HEART/NSTA Trust chairman had a contractual relationship with the entity prior to being appointed and continued to benefit from award of contracts after taking on the responsibility as the head of the its primary decision-making body is far, far from the ideal and warrants closer inspection,” argued Jeanette Calder, JAMP’s executive director.
She also said another board issue involving Gabbidon also needs to be explained.
Last December, Technology Minister Daryl Vaz announced the reappointment of Gabbidon as chairman of the Spectrum Management Authority (SMA), the body that regulates radio frequency in Jamaica.
But Calder said that could be in breach of the Government’s Corporate Governance Framework which stipulates that the chairperson of a public body “should preferably be selected from an industry not related to or conflicting with the nature of business of the public body”.
Records show that in 2017, the authority contracted SynCon for $800,000 to provide and implement a Vmware vSphere package that would help with data security and virtualise physical servers to reduce hardware costs.
Gabbidon joined the SMA board in November 2018, and is a former vice-president of corporate and small and medium enterprise sales at LIME, a leading telecoms provider now operating as FLOW.
Calder said both Holness, who is in charge of HEART, and Vaz, who oversees the SMA, need to “revisit” Gabbidon’s status.
“If the minister believes that the competencies of Gabbidon are of such value that it warrants him serving his country as the chair of a public body, there are currently another 146 such bodies, with many in need of strong leadership and effective oversight.”
Trevor Munroe, the principal director of the NIA, said the issues may be pointing to a violation of the Government’s staff orders, which said a conflict of interest may be deemed to exist where a public officer is ‘engaging in transactions with ... an organisation in which ... family members have an interest’.
“How much more a conflict of interest if contracts are being awarded by HEART to a company of which the HEART chairman himself is also CEO!” he said.
Munroe has questioned whether the permanent secretary or the prime minister was informed.
“If either or both were informed, was permission granted for this apparent conflict to remain? If so, for what compelling reasons?” he asked, noting that recent surveys of the opinions of the Jamaican people, audits and international reports have affirmed the “urgent need to tighten enforcement of good governance principles in relation to Jamaica’s public bodies”.
The issues involving the HEART board chairman come as internal and turmoil seeps into the public following news that the board did not renew Dr Janet Dyer’s three-year contract as managing director.
Two major appointments have since been made – Novelette Denton-Prince as interim head until April 30, and Kenesha Campbell as acting deputy managing director.
The training agency, which is funded through a three per cent tax on employers’ gross payroll, projects income for this financial year at $14.1 billion and expenses at $13.9 billion, according to budget documents.
HEART, whose certification rate has been under scrutiny, is in transition after the functions of three entities were merged into its structure in 2017.
SynCon’s (1994) leadership
Chairman – Professor Evan Duggan
Founder and managing director – Dudley Johnson
Chief executive officer – Edward Gabbidon, who is also chairman of HEART/NSTA Trust since April 3, 2017
HEART’s Contracts to SynCon during period of Gabbidon’s chairmanship
• September 3, 2020 – $9,767,640 – Ubiquiti Wireless Access – 8 tenders requested, 4 received
• March 7, 2020 – $684,457 – Production – two tenders request, 1 received
• January 7, 2019 – $3,255,693 – CISCO Switches and Accessories – 5 tenders requested, 3 received
• September 19, 2017 – $11,130,562 – CISCO US Phone & Renewal of licences – 5 tenders requested, 3 received
• August 30, 2017 – $2,967,022 – CISCO bundle training material – 3 tenders requested, 1 received
• August 8, 2017 – $4,561,955 – CISCO Unified Collaboration Service – 5 tenders requested, 2 received
• July 27, 2017 – $2,307,022 – Renewal of VMWare subscription – 3 tenders requested, 1 received
• July 7, 2017 – $3,559,122 – CISCO Network equipment – 3 tenders requested, 1 received
Total: $38.2 million
*Data from Integrity Commission Quarterly Contract Awards up to October 8, 2020.