If you have been keeping a regular eye on Caribbean procurement-related news, you would have observed a recurring theme: conflict of interest, or the appearance of conflict of interest. Although the situations vary, essentially, the allegation is that contracts have been awarded to individuals in circumstances where there seemed to be bias, or where there was a close relationship or affiliation with procuring organisation, the tender evaluators, or even with the political directorate, which may have influenced the procurement process, and the tender award.
Allegations of conflict of interest is usually levelled at decision-makers., as reflected in a typical definition for such a matter:
A conflict of interest occurs when a corporation or person becomes unreliable because of a clash between personal and professional affairs. Such a conflict occurs when a company or individual has a vested interest, such as money, status, knowledge or reputation, which puts into question whether they can be unbiased in their decision-making.
Although in and of itself conflict of interest is not illegal – but it is behaviour that most countries would like eliminated – when it does happen, it undermines fairness and transparency, which is becoming increasingly important in both the public and private sectors. Further, and in many instances, the performance of contracts issued under those circumstances is not as closely monitored; thus essentially wasting taxpayers’ (or shareholders’) money, and resulting in poorly executed, or no, project outputs.
Avoiding conflict of interest
In many countries, safeguards addressing conflict of interest have been established. Further, donor agencies, such as the World Bank, Inter-American Development Bank, and Caribbean Development Bank, to name a few, address the issue in their rules and guidelines. Frequently, depending on the project, it is a matter that is specifically raised in the tender notice or invitation, where individuals interested in responding to the invitation are referred to the relevant sections of the organisation’s procurement guidelines to ensure that there is no conflict of interest.
It is emphasised that many procurement guidelines speak to conflict of interest by bidders. In other words, they put the onus is on the bidder to ensure a conflict of interest does not exist. Some of the situations that could be considered a conflict of interest and result in disqualification from the tender process include, but are not limited to the following in summary:
An entity that provided consulting services to assist in preparing a project or in its implementation, it cannot subsequently provide goods, works, services resulting from, or directly related to, its initial project preparation or project implementation consulting services.
An entity that has been engaged to provide goods, works, or services for a project, cannot also provide consulting services in relation to those goods, works or services (and vice versa).
An entity already contracted for an assignment, where that assignment may be in conflict with another.
Prospective bidders (including their personnel, and sub-consultants) who have a close business or family relationship with a member of the tender evaluation committee, the procuring organisation, the donor agency, or even with the ruling government.
A prospective bidder who submits more than one proposal in the same tender process, either individually or as a joint venture partner.
A prospective bidder who is a government official or public servant and wishes to participate in a government tender.
It is thus crucial to review the procurement guidelines for the tender process, before starting any work toward your participation. Further, if in doubt, consider contacting the designated representative for that procurement process, for advice on whether your circumstances could be construed as conflict of interest, and your bid subsequently rejected.
A Cabinet Minister yesterday asserted that the Government “will get the best result for the Bahamian people” after receiving 17 ‘expressions of interest’ (EoIs) for the New Providence landfill.
#Romauld Ferreira, minister of the environment and housing, conceded to Tribune Business that the process was already behind schedule, but emphasised: “We can’t sacrifice getting it right for speed and time”.
#Interested parties had to submit their landfill management proposals by December 15, 2017, with the offers scheduled to be opened four days later. However, Mr Ferreira yesterday said the submissions were only now being handed over to a Cabinet-appointed evaluation team which will recommend which bidders qualify for the Request for Proposal (RFP) round.
#While acknowledging the importance of meeting deadlines, the Minister emphasised the Minnis administration’s determination to avoid a “repeat” of the former government’s experience with Renew Bahamas, which “walked away with its tail between its legs” from managing the New Providence landfill in October 2016.
#The 17 bidders, according to a list provided by Mr Ferreira, are BISX-listed Bahamas Waste; Providence Advisors, the Bahamian investment house; Bahamas WTP Ltd; Clleen Water and Power; RRI Global; Eastern Waste Systems; OMNI Corporate Services; Marine Contractors Inc; Bahamas Processing and Trading; Valoriza Servicios Medioambientales; New Providence Smart Power; Gold Seal Industries; Supernova Dominicana; EnviroQuip; Apapa International (Nassau); NP Eco-Park Ltd; and EBT Services International and Gel Tech Solutions.
#One name missing from the list is Stellar Energy, the waste-to-energy proponent, which was at the heart of the Letter of Intent (LoI) controversy surrounding now-minister of agriculture and marine resources, Renward Wells, when he was part of the former Christie government.
#Stellar had repeatedly given notice of its intention to bid on the latest landfill tender, and it is possible the company may be part of one of the 17 EoIs. Several of the bids are likely to involve groups or consortiums of investors. Providence Advisors, for instance, is likely to have partnered with waste disposal companies in its offer.
#Providence Advisors, headed by well-known financier Kenwood Kerr, had teamed with the all-Bahamian Waste Resources Development Group (WRDG), a 10-strong consortium of local waste services providers, to submit a bid on the Request for Proposal (RFP) launched in the last days of the Christie administration. That process was subsequently annulled by the new government.
#However, Mr Ferreira yesterday revealed that group had now split into two competing bids – the Bahamas Waste offer, and the one submitted by Providence Advisors.
#“We had some delays in opening the Expressions of Interest, but we’ve received 17 in total,” the Minister told Tribune Business. “That’s a good number to start with; some local, and some from outside.
As we all know, one of the challenges of being an Independent Consultant, Contractor or Service Provider, is the uncertainty inherent in that way of life. There is considerable stress around securing the next contract: to be able to pay the bills, keep a roof over our head, pay staff, send our kids to school, etc. But what happens when after you have gotten the contract, submitted all of the deliverables, but you have not been paid? That was a situation recently shared by a Project Calls subscriber:
Been a Caribbean consultant for many years but recently have been seeing a slowing down in the effort to pay on completion of deliverables by some countries. An associate was recently told that the final payment (nearly US$10,000.00) cannot be made as “there are no more funds”. What can the individual do in these circumstances? A contract was in place.
Below, are a few suggestions of the recourse that can be pursued. However, what advice would you give an individual, who is USD 10,000.00 out of pocket and has fulfilled all of their obligations under the contract?
1. Review to the contract and procurement framework
With regard to the situation communicated, and in the first instance, we recommend revisiting to the contract and the overarching procurement framework for guidance. Most Caribbean governments have a comprehensive set of guidelines and even legislation in place to manage their procurement processes. Large private corporates are also likely to have detailed policies in place. The challenge tends to be with smaller organizations, where relatively brief contracts are the norm.
2. Negotiate with client
Although a client may say that they cannot pay you, that does not automatically mean that you should just write off the outstanding sums and walk away. Consider options that can be explored with the client to allow you to recover what is owed to you. For example, could a payment plan by installments, rather than just a single lump sum, work? Could you be amenable to payment in kind? If there is agreement on a way forward, do remember to ensure that it appropriately documented and signed.
3. Refer to oversight committee
For projects for a government/public institution, there could be scope to refer the matter, or to seek recourse through an oversight group, such as a Tenders Board. Most Caribbean countries have such as unit, which monitor tender processes. However, many are also empowered to weigh in after the contract has been awarded. Further, with all of the effort across the region to reduce corruption in public procurement, increasingly, governments are assigning personnel (such as the Office of the Contractor General in Jamaica) to monitor their contracts.
On the other hand, an oversight body for private contracts is generally non-existent. However, depending on the size of the client and/or the industry in which it operates, it might be a member of a professional/business association. In some instances, matters related to unethical practices and behavior by its members might be something the association might wish to know, and it could be in a position to intervene.
4. Seek legal advice
Finally, there is always option to get one’s lawyers involved. Depending on the circumstances, it may be necessary in the first instance to better understand the arguments/case that could be successfully made, and the recourse available, before the matter is escalated (with legal action).
Off the bat, questions could be raised about whether the client acted in good faith. For example, did client know it was unable to pay, but failed to communicate that to the consultant, but yet allowed him/her to continue with the work? At what point did the client know that it was unable to pay? Also, recognizing that the work was delivered, is the client not prepared to offer a payment plan or some other alternative, or does it just expect the consultant write off the outstanding amount?
Additionally, advice could be sought on matters related to ownership and intellectual property. Typically, consultants produce work for their clients for an agreed fee. On submission of all deliverables and outputs, the consultant gets paid all that was agreed. Further, depending on the contract, the client either owns the material produced outright, or it is implied that although the material is recognized as still belong to the Consultant, the client can use it as it sees fit. However, if the consultant has not been paid in full, what right does the client have to the deliverables?
Some final thoughts
Typically, the successfully delivery of the specified project outputs requires considerable effort on the part of the contracted party, who is out of pocket, not only with regard to time and effort, but also with respect to funds advanced (for reimbursables or if goods/material had to be procured). Although there is always the option to write off outstanding payments, that posture might not be tenable, based on the amounts involved and/or how frequently such delinquencies occur.
In the event clients are no longer making the effort to pay all monies they owe – which hopefully our poll will either substantiate or refute – it may mean that contracted parties may need to be more proactive and vigilant from the outset, and be clear upon their options for recourse as needed.
Tenders have been invited for security services for a year at five facilities run by the Office of the Prime Minister (OPM).
Newsday has been reliably informed that the facilities in question fall under the ambit of the Gender and Children Affairs Division of the OPM. A senior government official told Newsday they have always been covered by private security arrangements.
The official said security for the OPM in St Clair, as well as the Diplomatic Centre and Prime Minister’s Official Residence in St Ann’s, will continue to be provided by members of the police and the Defence Force. They took over security at these venues from a private firm last year…
The National Procurement and Tender Administration (NPTA) placed advertisements spanning 9 pages on their new Supplier Registration Form, which advised that the forms could be obtained from the NPTA page of the Ministry of Finance website, at the NPTA or by email request to SPO_Compliance@Finance.gov. gy.
The NPTA website ‒ npta.gov.gy ‒ does not have the forms. The Ministry of Finance website ‒ finance.gov.gy ‒ does not have the forms. And the email address provided does not exist.
