The announcement on Friday that Indian company Fedders Lloyd had been prohibited from participating in the proposed construction of the Specialty Hospital is a lesson about rectitude in public procurement, one that the APNU+AFC government failed to heed just months into its administration.
Having entered office on lofty promises of transparency and probity in the area of procurement, the government proceeded to traduce these solemn commitments by entering a murky MoU with Fedders Lloyd despite the fact that it had been disqualified on administrative grounds from the earlier bidding process for the hospital and that the procurement act provided no pathway through which it could be re-engaged aside from a fresh tender process.
Despite the serious reservations raised by civil society, the Ministry of Finance and the government proceeded with preparations to instal Fedders Lloyd as the contractor for the project in clear violation of the extant procurement act. The freezing of the project as a result of a World Bank finding of procurement violations by Fedders Lloyd provides no consolation to those here who had argued against the MoU. The question now is whether the Granger administration will take heed of valid concerns raised by civil society about its governance and whether it is prepared to modulate its actions or at least provide sound justification for them.
What was even more galling about the government’s insistence on Fedders Lloyd was the public’s knowledge that there had been a connection between the company and Minister Ramjattan and therefore, at least on the face of it, the company was benefiting from this. Not even this prompted any hesitation or introspection on the part of the government. As in so many other cases, it has taken action by an influential external actor to bring an end to a disreputable deal, not as a result of the breaching of the local procurement act but because an offence was caused to the World Bank’s procurement standard.
It is quite significant that allied to the announcement of the Fedders Lloyd debacle, Minister of State Harmon announced at the same time that the Bid Protest Committee (BPC) mandated under the Procurement Act has been established. It has taken an entire year for this committee to be consecrated even while the public waits for decisive action on the setting up of the long-awaited Public Procurement Commission. Ironically, if such a committee had been functioning properly under the former PPP/C administration, Fedders Lloyd may have been able to object to the award of the original contract to Surendra Engineering and might have even been able to secure the contract the first time around.
Minister Harmon announced that the BPC comprises Attorney General Basil Williams as its Chairperson and former Manager of the Guyana Telephone and Telegraph Company, Archie Clifton and Company Secretary of Insurance Brokers Limited, Ewart Adams. Chief Executive Officer of Property Protection Services, Colin Shaw will be a rotating third member. It is unclear whether the appointments comply with the Act. Under the Procurement Act, the BPC is composed of one member appointed by the Minister of Finance, one by the Association appearing to the Minister to represent contractors and one by the Attorney General. The members are appointed from among professionals who are particularly competent in the field of procurement. It is unclear how the Attorney General is on the BPC particularly if he is to be the respondent on behalf of the state in any legal proceedings filed by disgruntled contractors. It is also unclear if the other announced members have wide, contemporary experience in procurement as called for by the Act.
Now that the government has made the welcome step of appointing the BPC, it must ensure that this mechanism is made available to any contractor who feels he/she has been wronged. Those who tender for projects in this huge public procurement sector also have a responsibility to citizens to ensure that improper practices are exposed and that they enlist the institutional mechanisms to prosecute their case.
The Fedders Lloyd fiasco underlines the need for the government to scrupulously follow the law on procurement and to ensure that all bidders are satisfied that there is a truly open and transparent process. Adherence by central government to these tenets sends an important signal to other tiers of government. Already, the Mayor and City Council has embarked on a reckless process for parking meters without an open invitation for interested providers. It has relied on two dated proposals to initiate the process and has clearly favoured one of these for no good reason. The ultimate irony is that its Municipal Tender Board is now seeking to prequalify contractors for a variety of services including the cleaning and desilting of drains. Surely the contracting of services for parking meters warranted far more rigorous examination and consultation than has occurred to date.
With the country having endured many years of questionable procurement practices, unwarranted single-sourcing and related maladies there must be no tolerance of diversion from the procurement law.
