The Guyana Sugar Corporation (GuySuCo) has completed a major overhaul of its Procurement Policy Manual to render the company’s procurement procedures more consistent with national policy guidelines and to improve transparency and accountability in its multi-billion-dollar procurement process, Chairman of the Corporation’s Central Tender Committee (CTC) Keith Burrowes has told Stabroek Business.
And according to Burrowes GuySuCo’s modified procurement procedures which will be centred on “greater efficiency and careful monitoring” will be one of the central planks upon which efforts to significantly enhance the profitability of the country’s sugar industry will be built.
Earlier this year, in a series of articles, Stabroek Business had reported on, among other things, deficiencies in GuySuCo’s procurement process which had been identified in the company’s 2009-2018 Strategic Plan. Burrowes too, in earlier interviews had said that there were weaknesses in the industry’s procurement procedures that required attention.
In a further interview earlier this week Burrowes outlined details of what he described as a “comprehensive overhaul” of the sugar industry’s procurement elements of which have been in force since last year and which he estimates would have directly resulted in savings to the industry totaling in excess of $400 million. He said that this year GuySuCo was looking for “perhaps a further 10 per cent in savings “arising out of some of changes that we have made to the procurement process. Burrowes provided a 2010 procurement estimate for GuySuCo of “between $19 billion and $22 billion”.
According to Burrowes GuySuCo’s new procurement regime centres on the full implementation of the new Procurement Policy Manual which is awaiting the approval of the Board and which he said “had not been updated in several years.” A second major feature of the new procurement regime is the creation of standardization tender documents which, according to Burrowes, “now allow for easier identification and analysis” of important tender-related information. “What we have also done in the process is to put mechanisms in place that shifts the focus away from procurement as a separate and isolated pursuit and to link the process more integrally to the production targets and to the overall performance of the industry. Critically, managers of those areas of the industry whose performances are directly linked to the procurement of specific goods and services will now be more integrally involved in the process. Field managers, for example, will be more integrally involved in matters relating to the timely delivery of fertilizer,” Burrowes added.
Source: Bank of Guyana
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The CTC Chairman says that critical to the Corporation’s new procurement regime were the use of management information systems to help ascertain trends in the procurement process and the employment of “stricter mechanisms” for the awarding of tenders “with a view to institutionalizing “a greater level of fairness.” The new documentation associated with the Corporation’s also seeks to avoid “contract-splitting,” Burrowes says.
One aspect of the new process with which he says he is “particularly satisfied” is the new standardized tender forms which suppliers will now have to complete. “One of the problems that we have faced in the past is the fact that the absence of standardization made it difficult for critical information to be properly accessed because of the irregular manner in which it was presented. The new tender forms now allow us to isolate particular pieces of information on all tenders and subject these to analysis on a level playing field. Our concern here is with the fairness and transparency of the evaluation process.”
While the new Procurement Policy Manual is still to receive the formal approval of the company’s Board of Directors, Burrowes told Stabroek Business that elements of the new regime were already in force with “several improvements in the overall efficiency of the process were already in place.”
According to Burrowes, the need for GuySuCo to critically re-examine its overall procurement regime had derived from a recognition that the company’s acquisition of goods and services was not only a high-cost element in its overall operations but that it was a critical element in determining the overall performance on the industry. “Meeting targets depend on timely procurement of goods and services and what we have done is to seek to create a new procurement regime which establishes traceable linkages between the work of our procurement section and the performance of the industry,” Burrowes said.
GuySuCo’s revised procurement policy, according to Burrowes, is aimed at obtaining goods and services in a timely manner and “on the most economically beneficial terms.” He said that the new focus also sought to pay more attention to issues of quality, specifications, delivery time, credit terms, suitability and compatibility level of after-sales service and availability of spare parts. The new system now allows us to anticipate the likely impact on production of any slippage in the procurement process,” Burrowes said.
Poor forward planning, a lack of ongoing monitoring and untimely delivery of goods and services are some of the problems which Burrowes identified in the company’s old procurement regime. “The new regime allows us to directly identify the particular individuals and bottlenecks that might be responsible for causing the system not to work as it should. Obviously, where we are able to do this the corporation will have to take corrective action and that, in some instances might mean the removal of personnel whose actions might have been responsible for the problems,” he added.
And according to Burrowes, the role being played by entities that supply goods and services to GuySuCo is one that is sufficiently critical to the performance of the industry to cause GuySuCo to be regarded as “a public/private sector partnership.” In this regard Burrowes told Stabroek Business, the new procurement regime takes “particular account” of the role of suppliers. “On the one hand we have moved to enhance and strengthen our internal system by, for example, adding an internal auditor to the process in order to ensure that there is transparency at the stage where the tenders are opened. At the same time the new procedures also take account of the need to engage our suppliers in order discuss the new procurement systems with them and to ensure that their concerns are addressed, though we are mindful of pursuing that relationship in a manner that ensures that there is no conflict of interest.”
He said too that some of the new tools being employed in the administration of contracts for infrastructure works were intended to “overcome problems associated with evaluating tender submissions prior to approval. “What the new manual does is to bring stricter mechanisms to bear as it relates to the evaluation of tenders.
Additionally, those procedures also allow the management of GUYSUCO to possess a monitoring framework for ensuring that procurement-related obligations are met by both the contractor and the company,” Burrowes said.