Monitoring and supervision of public procurement

Over the last two weeks, two important events took place in relation to public procurement. The first was a two-day workshop for officials of ministries, departments and regions while the second was the National Procurement Conference for contractors, consultants and related government officials. Both were held at the Guyana International Convention Centre.

At the first event, the Minister in the Ministry of Finance, Mr. Juan Edghill, spoke of the impending launching of a strengthened procurement policy administered by the National Procurement and Tender Administration Board (NPTAB), especially with regard to the evaluation of bids as well as the need to ensure that the requirements of donor agencies are met. He stated that Cabinet had recently approved of this revised policy.

The Minister defended the current system by stating that: (a) it is open and transparent; (b) there is no preferential treatment; (c) the system involves advertisement, the receipt of sealed bids and the public opening of tenders, among others; and (d) there is no back room wheeling and dealing. He also spoke about the Bid Protest Process involving a panel to look into complaints from contractors and suppliers of goods and services. On the question of the E-Procurement website, the Minister acknowledged some problems and stated that the Government Information Agency was instructed to ensure that all relevant information is provided. He concluded that the Government wanted the best person for the job, and that it was searching for a greater pool of people to carry out works and to provide goods and services.

The highlight of the second event was a feature address by the President at which he spoke about the government’s commitment to transparency. He referred to public accusations of corruption and stated that some of the accusations were justified. He also spoke about contractors who bid for several projects simultaneously but who did not have the capacity to deliver.

There were frequent time over-runs resulting in extensions being granted; delivery of shoddy work; and poor supervision of the related projects.

The President indicated that he requested the Ministry of Finance and the Attorney General’s Office to examine the contract documents to ensure that: penalty clauses and their enforcement are catered for; and contractors who provide shoddy work at inflated prices are blacklisted. He also issued a call for an expansion of the pool of contractors to avoid contracts being awarded to the same persons repeatedly.

All of this is laudable except that this was not the first time such statements were made. The Stabroek News editorial of 6 August 2012 indicated both the former President Jagdeo and the current Minister of Finance, Ashni Singh, making similar statements in April 2009. Later in June 2010, the Minister of Home Affairs echoed similar sentiments.

In a letter to the editor dated 10 August 2012, the Chairman of the Public Accounts Committee (PAC), referred to a statement on 29 May 2010 made by the Deputy Head of the National Procurement and Tender Administration Board (NPTAB) to the effect that: NPTAB was moving to implement a system where defaulting contractors could be blacklisted; and NPTAB was considering hiring a consultant to assist in the effort.

The problem appears to be one in which there is no effective mechanism for the monitoring and supervision of public procurement to ensure that the requirements of the Procurement Act 2003 and related regulations are rigidly enforced. The NPTAB approves of contracts between the threshold set for ministerial/departmental/regional tender boards and $15 million. Beyond the latter sum, the NPTAB recommends the award to Cabinet which will offer a “no objection” unless the procurement entity failed to comply with the applicable procedures.

Given the overwhelming involvement of NPTAB in the procurement process, there is currently no mechanism to monitor and supervise the work of this body.

In addition, the NPTAB reports to the Minister of Finance who appoints the seven members (not more than five from the Public Service and not more than three from the private sector after consultation with their respective organizations). In addition, when the NPTAB makes a recommendation to Cabinet, it would be difficult for the latter to raise any objection on procedural grounds since this would be in effect      calling into question the work of the Minister who is a key member of the Cabinet. In any event, given the workload of Cabinet and the lack of expertise in procurement matters by other Cabinet colleagues, any objection to the award of a contract is likely to be a rare occurrence.

Further, the law requires that the tenure of office of members of the various tender boards, including the NPTAB, should be for two years. Implicit in this is that there should be not only some form of rotation of members but also a mechanism for ineligibility after serving for say,
two consecutive terms. The same should apply to persons who are appointed to evaluate bids. It is not clear whether such a practice currently exists.

In view of the above, a gap or lacuna exists in relation to the monitoring and supervision of the public procurement process. It is in this regard, that the Public Procurement Commission established under Article 212 W of the Constitution, must be viewed. It was in 2001 that the Constitution was amended to provide for the establishment of the Commission “to monitor public procurement and the related procedures to ensure that the procurement of goods and services and the execution of works are conducted in a fair, equitable, transparent, competitive and cost effective manner”. The Commission’s independence and impartiality are also guaranteed by the Constitution.

It is indeed disappointing that after ten years such an important constitutional body, whose work it is to instill public confidence in the public procurement process, is not yet in place. The Transparency Institute of Guyana Inc. calls on the PAC to take urgent measures to nominate the five members of the Commission so that the President can make the appointment.

There is no requirement for political parties to nominate persons to the Commission and therefore the PAC could enlist the support of key stakeholders to identify candidates. Alternatively, the PAC could advertise for the positions on the basis of which the names of five persons could be selected and presented to the President for appointment. The latter will be a more transparent and competitive approach and is likely to result in the Commission being a truly professional body and not a political one.

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