No decision yet on lawsuit over botched used-car contract

The Ministry of National Security is yet to decide if it will take legal action against O’Brien’s International Car Sales for faltering on its 2017 contractual obligation to supply used cars to the police force.

Permanent Secretary Courtney Williams told The Gleaner on Thursday that, by the end of next week, the ministry will respond to O’Brien’s, which is seeking a new settlement agreement despite a breach of the previous one.

“I can’t comment on that right now. There are internal discussions taking place,” Williams said when asked about litigation.

The Gleaner obtained a copy of the settlement agreement, which followed mediation between the two parties in 2018 after O’Brien’s failed to fulfil its contractual obligation in providing 200 used cars for the police.

The settlement agreement, dated October 30, 2018, outlined that O’Brien’s would supply the ministry with 69 vehicles at a cost of $158.2 million. This would be in addition to the 36 vehicles it had provided at that time.

It said that the vehicles were to be delivered within 45 days after the date of the settlement agreement, signed by then Permanent Secretary Dianne McIntosh and O’Brien’s Managing Director Clement Ebanks.

The pact further outlined that any breach “shall be determined by hearing or trial before the courts of Jamaica”.

Last month, Williams told Parliament’s Public Administration and Appropriations Committee (PAAC) that at least 30 used cars, or $100 million in refunds, are still due to the police.

At that time, Williams told lawmakers that the matter remained unresolved and that he was having dialogue with the ministry’s legal team.

But, in a letter to The Gleaner last month, O’Brien’s said that fifty 2012-2014 Toyota Axio motor cars remained outstanding to the police, noting that 19 pick-ups were delivered.

The company said that the vehicles remain at Kingston Wharves, pending a new agreement.

O’Brien’s said a letter was sent to Williams in May with the request, but noted that no response had been received.

On Thursday, O’Brien’s attorney-at-law Zara Lewis told The Gleaner that her client is seeking to negotiate a new settlement agreement with the ministry or further mediation.

Lewis said that O’Brien’s sought an extension of the previous agreement before it expired.

“We’ve also asked that the contract be completed in a different manner. They said that they want all at once, [but] we want to give them in batches,” Lewis said, adding that O’Brien’s was experiencing difficulties with fees being accrued.

However, acting chairman of the PAAC, Fitz Jackson, said that, while the vehicles would still be able to serve their intended purposes, the value ought to be renegotiated to benefit the ministry.

Jackson said that the value of the vehicles would have depreciated significantly despite the ministry calling on the performance guarantee. As a result, additional sums ought to be paid over to the ministry, he said.

O’Brien’s emerged as the sole contractor after a recommendation from the National Contracts Commission.

This was despite a recommendation from the evaluation committee that the contract be split between two bidders, as “it would not be in the best interest of the ministry to award all the lots to one bidder”.

The used-car policy was a manifesto pledge by the Jamaica Labour Party and was introduced by then Minister of National Security Robert Montague.