Gregory de Montrichard, managing director of Risk Research Ltd (RRL), the preferred candidate which lost T&TEC's (Trinidad and Tobago Electricity Commission) brokerage contract to Neil Gosine on a claim that the tender process was flawed, agreed to talk about the aborted Tender No 9183 which was reported on exclusively in yesterday's Sunday Express.

Following is a summary of his Q&A interview with Head of the Express Investigative Desk Camini Marajh:

Q: The GM of T&TEC, Kelvin Ramsook, has said that on the Commission's first approach to your company for a three-month extension, after its audit department deemed Tender No 9183 flawed, and before it solicited quotations from other firms, your company submitted a quote that was 60 per cent of the total value for an entire year. Is this so?

A: Yes. On June 11, I met with Mr Ramsook at his Mt Hope office to explain in detail the serious economic disadvantages to T&TEC of arranging either a three- or six-month extension of the June 29, 2012, expiration date on the Main Assets Property Insurance Policy.

The reasons supporting my advice to Mr Ramsook were expressed in a June 14 letter I sent him and I quote: "As discussed with you, during our meeting, the cost of arranging either a three- or six-month extension of the Property All Risks Policy is going to be extremely high and uneconomic for T&TEC, given the fact that climatically, we have now entered the start of the traditional Caribbean hurricane season.

"As you would no doubt appreciate, International Re-Insurers who have underwritten Caribbean-based business consider their catastrophe exposure to be at its highest during this period.

"As a consequence of this, the Insurers traditionally rely on receiving a Full Annual Premium to cushion the widespread financial effect of a hurricane loss. A request for a three- or six-month extension of the June 30, 2012, expiration date is going to be met with the calculation of a punitive short period premium which takes into account the cost of paying the losses caused by major hurricane damage. It therefore makes far more economical sense for TTEC to consider the cost of procuring an annual renewal in comparison to requesting the short period extension."

In summary, we notified Mr Ramsook of the severe economic drawbacks of arranging the three-month extension of the policy, 16 days before the cover actually expired.

Q: Please comment on his statement that T&TEC saved over $3 million by selecting the lowest bidder, CIBL (Comprehensive Insurance Brokers Ltd).

A: Condition No 7D of TTEC Tender No 9183 under the heading "Duties and Responsibilities" unequivocally establishes the minimum financial rating criteria as set by AM Best and Standard and Poor's which selected insurance and re-insurance companies must meet before insurance can be procured from these companies to cover assets owned by the T&TEC.

From the inception of our appointment in June 2004, as T&TEC'S insurance broker's, RRL has complied implicitly with this critical tender condition by placing T&TEC'S property insurance with the world's most reputable and financially solvent Lloyd's Underwriting Syndicates, all of whom are Standard and Poor's "A+" rated and AM Best "A" rated. These syndicates have all exceeded, by far, the minimum financial rating standards set by T&TEC for the selection of their insurance providers.

These syndicates provide the highest and most reputable insurance underwriting security to the world's largest and technologically sophisticated power utilities. The pricing levels of these insurers, though internationally competitive, are consistent with the highest quality of insurance product available to a power utility in any part of the world. It therefore stands to reason that these companies will charge higher premiums in comparison to other insurance markets, who are not as financially stable.

To the best of our knowledge, the selected local insurers who are currently providing the three-month extended cover to T&TEC do not meet, let alone exceed T&TEC'S minimum financial security criteria. These companies, though not suited as the best insurers to underwrite a power utility, are obviously prepared to sell their products at any price, simply to attach T&TEC's business to their books.

It is clear that T&TEC has issued and applied a specific set of tendering rules and instructions relevant to Tender No 9183 and has obviously ignored this as a means of awarding its business to another broker.

Q: Mr Ramsook has said the Cheesman Evaluation Committee followed strict procedure and adhered to all of the tender rules in relation to the short-term three-month contract. What is your view?

A: We disagree. Condition No 7D was repeated in the RFP for the three-month contract and it was breached by T&TEC.

Q: Mr Ramsook made a point about the policies under review being extended for a full year without tender with your company as the existing insurer. Was there anything untoward about this one-year extension?

A: RRL was granted a one-year extension of service in June of 2011 by T&TEC on the grounds that our service for the preceding three-year period was considered excellent and far exceeded T&TEC's expectation standards.

Q: Mr Ramsook said he had concerns about the evaluation team on Tender No 9183 but has refused to provide specific details. Implicit in his statement, however, is the suggestion that the team attempted to push through a flawed evaluation process. What is your view?

A: I disagree. As far as I am aware, T&TEC's Evaluation Committee carried out the tender process schedule exactly in accordance with the itinerary of events as chronologically detailed in Tender No 9183. In our opinion, the committee did not attempt to "push through" any aspect of the process by circumventing or modifying anything associated with the tender.

Q: On the question of the custom and practice of the assistant GM—Finance being in charge or handling certain aspects of the Commission's insurance tenders, Mr Ramsook has said that he is not going to follow a "flawed" process on the basis that it was done before. What's your take on this?

A: Since the inception of our appointment, the assistant GM—Finance has always signed the covering letter attached to T&TEC's Tender Invitation Document for the "Provision of Insurance Brokerage and Risk Management Services". She has also traditionally signed the award letters associated with this contract. We find it highly unusual for Mr Ramsook to now suggest that Ms Colleen Licorish's involvement in previous and current tender invitations constituted a flaw in the process when there was never any prior objection raised by any member of T&TEC's executive management and/or board of directors regarding her involvement in this respect.

Q: Please comment on the Commission's decision to abort Tender No 9183 and the ensuing process employed in selecting an insurance provider.

A: I see absolutely no reason for T&TEC to abort Tender No 9183. Furthermore, we cannot understand how a firm called CIBL [which] did not qualify for advancement into the second and final phase of Tender No 9183 was ultimately awarded T&TEC's insurance brokerage services in deference to one of the three companies which had been short-listed to participate in the phase two tender. The industry norm is that the incumbent broker would usually be requested to provide an extension of all expiring policies if required. It is highly irregular to see an eliminated tenderer being requested to provide this service to a client.

Q: Comment on your company's failure to bid on the second public tender put out by the Commission.

A: As I told you before, we willfully refused to participate in T&TEC's most recent public tender because we felt it would compromise our position in objecting to the manner in which T&TEC has awarded [its] business to another broker. Had we tendered, effectively we would be saying that we saw nothing wrong with the method by which the award was made.