Petty and Major Contracts
The government is often viewed as a more reliable and stable partner for doing business. Government contracts generally fall in two categories: petty contracts and major contracts. The term petty contract in the BVI refers to a contract with government that is in excess of $10,000 but under $100,000. A major contract refers to a contract that is in excess of $100,000.
When applying for a contract with the Government, your company must be in good standing. That means it must be up-to-date with trade license fees, company registration fees (if the business is registered as a company), Social Security and taxes. This applies for both petty and major contracts.
You will be required to submit a tender security (only required for construction projects), which is usually from a bank or an insurance company, for about 5-10 percent of the contract price (depends on the size of the project). The submission of the tender security is proof that your company will be able to obtain a performance bond which is required to be submitted by the successful contractor. A performance bond is a percentage of the actual cost of the project that is advanced to the contractor to commence work.
The time frame for submission of bids is usually between two to four weeks from the last date to pick up the tender documents. The Tender Box for receipt of bids is located at the Ministry of Finance, Procurement Unit, RFG Place, Road Town, Tortola. You must drop the bid in the Tender Box by the closing date and time for submission or they will be disqualified from the bidding process. You are required to submit an original and two copies of all documentation that was requested.
Central Tender Board
On the closing date, there is a Central Tender Board (“CTB”) meeting to open the bids. This meeting is open to members of the public who can attend and view the process. At the CTB meeting, the Tender Box is opened. The Board will read out the name of the tenderer, whether the trade license, Company Registry (if applicable) or Good Standing Certificates were submitted and the amount of the bid. If any of the documentation is missing from the tender, that tenderer will be immediately disqualified. After all the bids have been opened and the information documented, the meeting will then be closed to the public and the remainder of the deliberations will remain confidential. A letter will be sent to all tenderers outlining all the names of the tenderers and the amount for each submission.
A sub-committee of the CTB (comprised of specialized persons and relevant experts) will review and evaluate in detail the bids that have been submitted and will make recommendation to the CTB. The CTB in turn makes a recommendation that is reviewed by the Financial Secretary, Minister of Finance and finally Cabinet. It is at Cabinet’s discretion whether the CTB’s recommendation is accepted or not. Cabinet makes the final decision on which bid will be awarded the contract.
Signing the Contract
The contract will include the bid document and other relevant information which will be drawn up the Attorney General’s Chambers for the successful tender. All tenderers receive a letter indicating whether they were successful or unsuccessful. After that, the respective Ministry will contact the successful tenderer to have the contract signed. On signing the contract, if it is a construction project, a Performance Bond is required to be submitted by the successful tenderer. The Performance Bond is issued by a bank or an insurance company, to guarantee satisfactory completion of the works. If the contractor fails to perform satisfactory in accordance with the contract or fails to complete the works, compensation is guaranteed for any monetary loss up to the amount of the performance bond. The performance bond usually covers 10 percent of the contract price.