In a historic move, 13 companies and persons have been debarred for varying periods by the Public Procurement Commission (PPC) from getting government contracts, including the Chinese company presently executing the East Coast Demerara road expansion project.
The development follows the approval of long-awaited debarment regulations earlier this year as the PPC ramps up preparations for oversight of the spending of revenues from the oil and gas sector.
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The micro, small and medium-sized enterprise (MSME) sector has received a boost with the passage of two Resolutions in the House of Representatives that seek to provide an opportunity for local suppliers to bid on government contracts, based on the percentage of local raw material being used.
The resolutions are the Public Procurement (Domestic Margin of Preference) Order, 2019, and The Public Procurement (Set Aside) Order, 2019.
Piloting the resolutions on October 22, Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, said the Public Procurement (Domestic Margin of Preference) Order is the application of a prescribed factor on the bid price of foreign bidders participating in international competitive bidding procedures.
“The application of this factor allows a national bidder to earn a government contract, even if its bid price exceeds the price of a foreign bidder, provided that the national bidder demonstrates a required percentage of domestic content,” the Minister noted.
“This Order dictates 20 per cent and 35 per cent, respectively. Therefore, the procuring entity shall apply a domestic margin of preference of 20 per cent on the criterion of bid price in respect of bids which demonstrate the use of domestic content of a minimum threshold of 35 per cent,” he added.
Dr. Clarke said it is intended to mitigate the competitive disadvantages of the participating Jamaican suppliers, adding that the measure will develop the local business sector over the long term.
“We are doing what other countries have been doing for some time, which is balancing the need to ensure that the Government gains competitive tenders but develops local industries, develops local firms and develops our own country,” he said.
He explained that the Public Procurement (Set Aside) Order aims to create opportunities for specific groups of bidders who may be otherwise unable to earn government contracts with undertakings in industries targeted for development.
The Minister said with the Order, micro, small and medium-sized enterprises (MSMEs) will also have access to a certain percentage of government contracts under the public procurement Set Aside Order 2019.
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A top engineer yesterday hailed the draft Public Procurement Bill as a tool that can “remove the veil” and “opaque processes” surrounding the award of multiple government contracts.
Quentin Knowles, the Bahamas Society of Engineers (BSE) president, told Tribune Business that the long-awaited legislation that has been released for a 30-day public consultation seems to promise the creation of an equitable ‘level playing field’ for all bidders on public sector contracts.
Revealing that he knew of companies and entrepreneurs who simply chose not to bid on government tenders because of perceptions they were always awarded to “favoured” rivals, Mr Knowles voiced optimism that the legislation will “go a long way” to boosting competition by expanding the bidding pool.
Describing himself as a small businessman of 30 years standing, the BSE chief said there were “too many forces” ranged against micro, small and medium-sized (MSMEs) in The Bahamas, and expressed hope that the Bill may “counteract” some of these.
Focusing on the construction industry and related professions specifically, Mr Knowles said he also wanted the Bill to encourage the Government to outsource more services and work to the private sector, pointing to the building inspection process and other aspects that have the potential to be “farmed out”.
“From my perspective, public procurement is basically giving equal access to the public to bid on any projects and products the Government may have,” Mr Knowles told this newspaper. “That’s my understanding of what this is all about, and it’s critical for me as a contractor and engineer.
“Procurement is what I do in contracting. That’s what contracting is all about; to secure the best price, product and resources. To give people who are suitably qualified equal access to all available procurement possibilities is going to be critical.
“I think the way it’s done presently, it’s a veil and such an opaque process,” he continued. “It’s not to say things are not being done in a correct way, but this Bill will probably remove that veil, if you will, and I think it will be a benefit not only to the Government but people out there who did not have access to opportunities.”
Complaints and allegations have long swirled over the process for awarding government contracts, with rejected bidders frequently challenging this and the selection of rivals. The Government, though, believes the Public Procurement Bill will both help save taxpayers millions and aid small businesses.
Besides producing better “value for money” through improved transparency and accountability surrounding the award of government contracts, the Bill also stipulates that all government agencies must award a minimum 10 percent of their contracts to Bahamian MSMEs.
Acknowledging that “having to embrace change is sometimes difficult in a government environment”, Mr Knowles said it was “human nature” for persons to deal with companies that they knew and trusted, which sometimes meant rival bids were not properly considered.
“There’s a lot of people that I know of, because of the perception they don’t have a chance to even go after some of these projects, they decide not even to bid even if it’s advertised in the newspaper because they feel there are people who would be favoured,” he added.
“It will go a long way to encouraging people who have not traditionally gone after government work to go after it… I haven’t looked at it [the Bill] in detail, but it seems like a really good thing if it’s properly implemented. That’s another question: Proper implementation will be the key. We have a lot of great laws and regulations on the books, but we sometimes struggle to implement.”
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The Cane Garden Bay sewerage project has moved one step closer to becoming a reality.
The much-talked-about project is now open for tender and will remain open until 10 am on October 1.
“The Government of the Virgin Islands invites all tenders for the procurement of works for Lot 2 – procurement and installation of the sewer network system in Cane Garden Bay,” a public tender notice posted on the Government’s website said.
The scope of works consists of the demolition and removal of 35 lift stations. The contract will be funded through the government, the notice added.
We can reject all bids if we want to
In the meantime, the public tender notice came with a disclaimer to all interested bidders.
The notice said: “The Government of the Virgin Islands/ Ministry of Finance, reserves the right to accept or reject the right to accept or reject any bid or annul the process at any time prior to the award of any contract without thereby incurring any liability to the affected prospective bidder(s) or any obligation to inform the affected prospective bidder (s) on the grounds for Government/Ministry of Finance action.”
The disclaimer also informed that government will not defray any costs incurred by any bidder in the preparation of bids.
Interested persons willing to bid on this project should be addressed to the Chairman of the Central Tenders Board in the Ministry of Finance.
The Sewerage Project
In May of this year, Deputy Secretary in the Ministry of Works Jeremy Hodge told BVI News the initial $1.6 million sewerage project has been put back on the proverbial drawing board.
According to Hodge, the project was pushed to accommodate a number of changes after government hired FDL Consultants to manage the project last year.
“Instead of looking at a 10 to a 20-year solution, we are looking more futuristically in terms of a 30-year sustainable design for the area; taking all the different sectors into consideration,” Hodge explained at the time.
The deputy secretary, however, said plans are now back in its final stages to get off the ground.
“We have now received the final documentation in terms of designs and tender documents for that project, and that information is now with the Ministry of Finance,” Hodge said.
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In the 2017 hurricanes the BVI Post suffered damage to all of its locations, including letterboxes, and the recovery has been an ongoing struggle, Postmaster General Pascha Stoutt told legislators during Standing Finance Committee deliberations in April.
As a result, she said, all staff members from across Tortola were reassigned to the Road Town office, where she said conditions were “inappropriate,” according to a report on the closed-door SFC proceedings.
All mail was being collected, sorted and distributed to customers at the central location as well, she said, adding that a Cabinet paper had been drafted regarding the procurement of new letterboxes and the waiving of the tender process.
Letterboxes
Natural Resources, Labour and Immigration Minister Vincent Wheatley inquired about a statement in Ms. Stoutt’s presentation indicating that the letterboxes for Anegada and for North Sound and The Valley in Virgin Gorda would be installed in 2021, and asked whether there were already any letterboxes at those locations and whether the installations would be upgrades.
Ms. Stoutt replied that letterboxes were being “installed in three phases,” according to the report.
Third District Representative Julian Fraser also asked about the letterboxes at Sea Cows Bay and the former post office in Road Town, to which Ms. Stoutt responded that the letterboxes for SCB would be installed during “Phase Two” of the project.
She also said the former location in Road Town was not safe to enter because of structural and mould issues, and added that the letterboxes there were outdated and that the keys needed to open them are no longer manufactured.
Junior Minister for Tourism Shreen Flax-Charles asked about the construction project that was being undertaken at the letterbox location in Road Town near Scotiabank, noting that the way the area was boarded up at the time posed safety concerns by forcing pedestrians to walk into traffic. Ms. Flax-Charles asked Ms. Stoutt who was responsible for boarding up the area, but the SFC report did not include Ms. Stoutt’s response.
Finance
When Mr. Fraser pressed Ms. Stoutt on the delay in restoring the letterboxes, she cited a lack of funding and resources.
She also said that the BVI Post needed a cost accountant to ensure that the costs of delivering and processing mail were “adequately covered.”
Financial Secretary Glenroy Forbes said that $377,000 had been allocated in the department’s 2019 budget to purchase and maintain letterboxes, and that $119,000 had been allocated in the 2018 budget for this purpose as well.
Ms. Stoutt also stated that the 2018 budget — in which 64 percent of funding went towards personal emoluments, 23 percent went towards contractual agreements and 13 percent went towards operational expenses — was “not feasible,” but the SFC report did not state if she specified any suggested changes.
The budget estimates suggest that the office’s overall budget remained about the same this year: The 2018 estimate was $3,155,809, versus $3,104,860 for 2019.
US proposal
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