The PPP/C’s procurement system

In a letter to this newspaper on October 1st, 2016, former President Donald Ramotar insisted that the PPP/C should be credited with transforming the procurement system and opening it up to public scrutiny. He was responding to a Stabroek News editorial of September 26 which had welcomed the recent appointment by the APNU+AFC government of a Bid Protest Committee and the imminent constituting of the Public Procurement Commission (PPC) which the PPP/C had failed to get going for more than a decade. The editorial contrasted the progress under the APNU+AFC government with the PPP/C administration by saying that under the latter “there was a heavy veil drawn across the huge procurement sector.” Mr Ramotar took exception to this statement and proceeded to enumerate what the PPP/C had done to make procurement transparent.

The former President said that when the PPP/C entered office in 1992, “The PNC, which now leads the APNU+AFC regime, had no tendering process. Contracts for projects, goods and services were given to their cronies and party financiers. The PPP/C administration not only changed that system, they introduced an open bidding process and implemented systems to establish and enforce transparency. These included inviting members of the media and representatives of the tenderers to the opening of the bids. Persons/companies that tendered for the job and the amount they bid were announced to those present and by extension to the public.”

Mr Ramotar also blamed the PNCR’s stance on the Public Accounts Committee (PAC) of Parliament for the non-activation of the PPC saying that it wanted to appoint the majority of the members and to control the body. He added that in 2011, when the opposition gained control of the legislature it became even “more belligerent”.

For the sake of the record, it is important to establish that while the PPP/C did introduce a public procurement system it remained bereft for over a decade of the PPC, the PPC tribunal and a true culture of transparency.

Mr Ramotar’s rendering of why the PPC was not set up for more than a decade under the Jagdeo and Ramotar administrations is typical smoke and mirrors, a trumped up excuse which has been thoroughly undermined by the recent agreement between the two major political parties on the membership of this important watchdog. While it was true that when the PNCR chaired the PAC it initially insisted on unanimity on the five candidates for the PPC, the PPP/C government made little effort at a political deal and this remained the case for an entire decade. The only conclusion that could be drawn was that the PPP/C was wary of the scrutiny of the procurement process by some of the nominees that the PNCR and later APNU and the AFC proposed.

There was little else that the PNCR or APNU and the AFC could do to make the Procurement Commission a reality as the five PPC nominees required a two-thirds majority approval in Parliament to go ahead. So even if the opposition could succeed in having a motion from the PAC put to Parliament for approval of the names, there was no chance of it succeeding as the PPP/C would have to support it. So while the PPP/C was in office there was no progress as it found a series of ways to stymie the process including reversing itself on the method of approving the five candidates.

On the other hand, the AFC in particular had staked much while in opposition on the setting up of the PPC and there was clearly a more conducive atmosphere at the PAC for agreement on five names as it was in the PPP/C’s interest, now in the opposition, for the PPC to go ahead. So what, the PPP/C had avoided while in government, it has now quickly acceded to. It named two of the nominees to the PPC while the government named the other three. Without the PPC, or at least a Bid Protest Committee (BPC) the procurement system as authored by the PPP/C was merely a shadow of what should have been there and a system easily compromised. Mr Ramotar in response to the statement that not even a BPC had been set up by the PPP/C government made a vague reference to a bid review committee which he said was set up to examine complaints and appeals whenever they were made. This, he said, comprised technical persons from the Ministry of Finance and the ministry/agency concerned. He added, “True, it was not a permanent committee, but was established as the need arose.” The committee that the former President referred to cannot be taken seriously and cannot be compared to the work of the BPC which has now produced a formal decision in the case where Cevons Waste Management Inc had challenged the award of a contract to Puran Brothers for the running of the Haags Bosch landfill site on the East Bank of Demerara.

The other point that must be made about the PPP/C’s procurement system was that it was full of holes which permitted all sorts of abominations to occur. So while on the face of it there was an appearance of openness, this masked a variety of failings. The public opening of tenders was a torturous, drawn out process which was not completed by the  subsequent naming of the winning bidder. PPP/C cabinets refused to divulge the names of winners of contracts on the flimsy grounds that they could be targeted by criminals. Without the winners of the contracts being known, watchdogs were immediately unable to trace the works and determine if the contractors had the requisite facilities and were doing the job. Under the APNU+AFC government the winning bidders are being named.

A number of notorious procurement decisions under the PPP/C also call into question the integrity of the system that Mr Ramotar lauded. The public had no clue of the composition of evaluation committees set up under the National Procurement and Tender Administration (NPTAB) and what their terms of reference were. These committees all operated clandestinely and though they must have undoubtedly made many fair and perfect decisions, there was much that the public didn’t know.

For example, how could an evaluation committee opt for Mr Fip Motilall as the contractor for the Amaila Falls Hydropower Project road when he had  no known experience in such projects? It was Mr Ramotar’s government that terminated the contract in the end after unending delays and cost overruns. How could Surendra Engineering be chosen for the construction of the Specialty Hospital when it competed against much better qualified companies? Again it was the Ramotar administration that embarrassingly had to dismiss Surendra after it was linked to fraudulent behaviour.

In perhaps the most serious of the deviations from fair procurement, an evaluation committee only pre-qualified New GPC for the supply of drugs to the public health system. It had been well known that the PPP/C government was intent on favouring New GPC with billions in contracts so it tapered pre-qualification guidelines to ensure that only this company could be so qualified and this eventuated, notwithstanding the complaints of ANSA McAl and others. That single decision made a mockery of the entire public procurement regimen. There were many other poor decisions including the awarding of contracts for the laying of the fibre optic cable from Brazil which was so badly botched that there was hurried attempt by the PPP/C government to award a repair contract to Dax Engineering without any advertisement for bids.

On top of this, a significant number of contracts that passed through the procurement system saw cost overruns as evaluation committees often settled for the lowest bids without properly assessing whether they were realistic. Others like the hugely expensive Kato school in Region Nine and the Hope Bridge on the East Coast were so haphazardly supervised and constructed so as to become burdens on the public,  requiring costly repairs. Just as an aside, as it didn’t fall within the national procurement system but was nevertheless under the control of the PPP/C government, the choice of a Chinese contractor for the new US$110m Skeldon sugar factory has left the industry – and the country – with a huge liability which seven years later continues to drain resources. Someday, the bids for that factory project must be carefully re-examined to determine how such a botched decision came to be made.

So in as much as Mr Ramotar could boast of a procurement system it was far from complete, badly compromised and thoroughly unacceptable for a country with a huge public procurement sector.