Jamaica
ST JAMES, Jamaica — Senior law lecturer at Bangor University in Wales, Dr Ama Eyo, is calling for more sustainable procurement practices that shun corruption, bribery and collusion.
According to Dr Eyo, research shows that an estimated 10 to 20 per cent of the entire money spent on public procurement globally is wasted on bribery and corruption and only 2.81 per cent of contracts are publicly reported.
“When you are utilising the procurement system under procurement law this should not be practised… what we’re doing today around empowerment, training and development of expertise should go a long way in changing the mental well-being on how we look at the impact of corruption on procurement and it should give you some control to resist those unethical practices,” Dr Eyo was quoted as highlighting in a release from the Ministry of Finance and Planning.
She was delivering a lecture on day three of the Elevate Procurement Conference at the Montego Bay Convention Centre in St James on Thursday.
The three-day conference was held under the theme, ‘Elevate: Innovate, Create’ and hosted over 500 attendees, comprising suppliers of goods, services and works, public procurement oversight institutions, and international and regional procurement practitioners, among others.
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The Bahamas
FINANCIAL Secretary Simon Wilson rebuffed a claim in the United States’ latest human rights report that The Bahamas is failing to effectively implement laws related to contracts and procurement.
The report said the country has limited enforcement of conflict-of-interest and anti-corruption clauses in government contracts.
Mr Wilson said that the government has made improvements to fulfil its obligations under the Public Procurement Act.
“I think the procurement reform is an ongoing process,” he said yesterday on the sidelines of an event launching Cloud Bahamas.
“We have made great strides in procurement reform. Obviously, it’s not a flat standard, and each country and each situation is different.”
Mr Wilson said of the US report: “That’s a very broad statement, not reflective of the efforts we have made in terms of procurement reform.
I will say they will have to provide more specifics on that.
“We are a very small country, so obviously it’s very hard to have people unrelated in this country.
“They have to provide specific examples where there was a clear conflict of interest where the government didn’t act.”
Critics have repeatedly criticised the government for lacking transparency over procurement processes and awards. The financial secretary said the frequency of contract award reporting has increased, adding that full compliance will contribute to transparency.
He noted that the government aims to ensure that all agencies use the GoBonfire online portal to bid and award procurement deals.
“I will say that procurement compliance is a work in progress. We are more compliant than we were two years ago. In a year’s time, we will be more compliant,” he added.
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Trinidad and Tobago
The Procurement Act is being fully implemented during a period of low economic growth and stagnation. Oil production is a shadow (25 per cent) of its high point in 1978, and natural gas is 40 per cent below its peak. Declining foreign reserves and foreign exchange shortages indicate both a weakening energy sector and a private sector that is not growing fast enough to compensate for the energy sector’s weaknesses. Achieving economic growth is challenging absent any upward movement in the price of petrochemicals and other energy exports. Government expenditure needs to be rationalised and prioritised.
Given these realities, the mechanisms introduced by the act are an opportunity to make changes. But there are no shortcuts, no silver bullet that simplifies the adjustments required by the act. The Office of Procurement Regulator (OPR) understands the size of its task, and Section 3 of its handbook entitled “Training Standards Competence Levels and Certification Requirements” Version 1, published in 2020, identifies the gaps between the act’s requirements and the current state of readiness. The information presented in the report is based on data and statistics obtained from stakeholder engagements, the findings of a capacity assessment report, and the Auditor General’s 2019 Report.
It identifies the historical issues as poor data collection and reporting, the absence of a central electronic public information system, lack of a national registry, multiplicity in the tendering process, and a “shortage of trained procurement staff in public bodies.” The Auditor General’s 2019 report is worse. It noted poor internal controls, non-adherence to financial and regulatory guidelines, poor document management systems, weak asset management, limited human resources, and inadequate segregation of duties. The report also noted a lack of coordination between ministries and no provision for business continuity in a disaster.
To address these deficiencies, the OPR surveyed attendees at capacity-building workshops to assess capacity levels. The information was used to assess capacity gaps in public bodies among those officers charged with the responsibility for public procurement. The survey results and the percentages quoted refer only to those who responded. Accordingly, one can infer that if all public bodies responded, the results could be much worse. Only 31.3 per cent of the public bodies that responded had staff with the necessary theoretical knowledge and analytical skills required to adequately perform this critical function.
Further, the survey revealed a significant deficiency in the skill levels of officers charged with the responsibility for procurement. The handbook concluded that this was evidence of the limited importance placed on these roles in public bodies and highlighted the need for “appropriate qualifications and skills to make a strategic impact.”
In addition, 77 per cent of those designated as “procurement officers” lacked decision-making authority in the procurement and disposal process. This means that those charged with procurement responsibility have limited scope to ensure that the process accords with the act and its regulations. Yet the act makes these procurement officers liable for wrongdoing or failure in the procurement process.
Following this evaluation, the OPR set training standards, competence levels, and training requirements for procurement officers. The standard is structured in three parts and defines the skill sets and training required at each level. In addition to the standards, a Readiness Assessment Checklist was developed to guide public bodies in the convergence exercise to comply with the requirements of the act. This includes the development of a code of conduct to guide both procurement officers within the public bodies and the contractor and supplier with whom they must interact.
The readiness document recognises that certification requirements must be matched by improvements in internal control, without which procurement changes would be ineffective. It also recognises the need for compensating modifications to the organisational structure to incorporate these changes. The foregoing requires phased planning and implementation. These changes also call for training and system improvements, which would also require a different level of expenditure and process to manage those changes.
The takeaway from the foregoing is that there are significant deficiencies in the way public bodies (government ministries, state enterprises, et al) are currently structured. In short, when there are complaints of corruption, they are also due to systemic errors. For example, the current “war” with the Auditor General is due to a significant systemic weakness that the Finance Minister has attempted to pass off as a computer glitch and signals weak controls that failed to detect the error for a significant time.
The Procurement Act must be viewed primarily as a critical step in improving the functioning of public bodies by addressing the underlying systemic weaknesses. The difficulty is making it work. A former minister commenting on last week’s column noted, “I wonder if we can and are willing to pay for all the things we say we need. Where is the money to come from? We have to establish priorities and accept that we can’t get all we want.” Such choices are necessary but never easy. If the country wants good roads, schools and improved public service delivery, then those choices must be made, explained, owned and financed by the public purse. Change requires leadership to initiate and drive the process and management to ensure it works, continuously.
Mariano Browne is the Chief Executive Officer of the UWI Arthur Lok Jack Global School of Business.
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Guyana
Mr. David Patterson, then Minister of Public Infrastructure under the APNU+AFC Govern-ment, was found by the Public Procurement Com-mission (PPC) to be directly in breach of the Procurement Act when in or about 2016 he took an “unsolicited proposal” procurement request directly to Cabinet, bypassing the open tendering process mandated by law. On the approval by Cabinet, he instructed the General Manager of the Demerara Harbour Bridge Corporation to sign the contract. At page 8 of the Report of the PPC:
“Rawlston Adams, General Manager of the Demerara Harbour Bridge Corporation (DHBC) signed the contract with LIEVENSE CSO ENGINEERING CONTRACTING BV on December 9, 2016. Mr. Adams informed the PPC that the Board of the DHBC was not a party to the decision to use these funds for this purpose, as approved by CABINET, and further stated that he had not signed the contract on behalf of the DHBC, but only because he was requested to do so by the Minister of Public Infrastructure [Mr. David Patterson]”.
At page 11 of the Report, the PPC stated:
“… the submission by the Minister of Public Infrastructure directly to Cabinet was in breach of the Procurement Act.”
Mr. Patterson has to this day the distinction of being the only sitting Minister to be cited for a breach of the procurement law of this country.
However, although Mr. Patterson was found to be directly in breach of the Procurement Act, the PPC did not direct that the contract entered into on that breach be rescinded. The decisions of the then and current PPC are consistent with each other and the law.
Are Mr. Patterson and the Alliance For Change (AFC) by their public statements yesterday (April 19, 2024) now saying that that decision of the then PPC was wrong and that the contract directed by Mr. Patterson to be entered into on the flawed procurement process should have been directed to be rescinded?
There was no penalty imposed against Mr. Patterson either for directly breaching the procurement law. Is he and the AFC now saying that was wrong and he should have been penalized and he should have resigned? Did they object to the Report of the then PPC as they are doing now demanding that the contract should have been rescinded and Mr. Patterson be penalized?
Of course, this clear inconsistency by the AFC and Mr. Patterson has not all been addressed by certain media houses who have dutifully carried their propaganda.
Of note, this PPC on which I proudly sit as a member under the astute Chairmanship of Ms. Pauline Chase, has gone further than its predecessor in that it expressly addressed the deficiency in the law of not providing for penalties for the breach of the procurement laws and recommended at paragraph 152(X) of its report that legislation be enacted to provide for penalties. Will the AFC and Mr. Patterson who are part of the Legislature take up this cause that they are now so openly passionate and vocal about and ensure that the law is amended to provide for penalties for breach of the procurement law. And will they so passionately demand that it be applied retroactively? Perhaps the AFC ought to stay quiet and not shoot itself in the foot.
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Guyana
The opposition APNU+AFC yesterday called for a probe of the national tender board and the procurement system in the wake of the scandalous award of the Belle Vue Pump Station contract to Tepui Inc.
In a statement, it said that the findings of the Public Procurement Com-mission (PPC) on the Tepui contract for the construction of the Belle Vue pump station have outraged Guyanese across the political spectrum.
“We, in the Opposition, firmly believe that the Tepui contract scandal is only the tip of a large iceberg. Indeed, NPTAB was barefaced enough to inform the PPC that it awarded similar pump station contracts to others who also did not have the experience and prerequisites. We are convinced that breaches of the procurement laws and the award of contracts to the friends, families and favorites of the PPP government occur regularly and are in the tens of billions of dollars.
“We, therefore, believe that calls for only a criminal investigation of the Evaluation Committee for the Tepui contract or the revocation of the contract fail to recognise the magnitude of the mismanagement, corruption, and political interference in the contract award system under the PPP. Nothing short of radical overhaul and total cleansing is needed. Guyanese must note that the government’s entire capital budget is processed through the public procurement system. We are dealing with hundreds of billions of dollars annually. In 2023, the capital budget was G$388B. In 2024, it is a galloping $666B, approximately 58% of the entire national budget”, the opposition said.
It noted that the award of government contracts was a “Herdmanston issue.” – meaning that in the aftermath of the 1997 election and public protests, the award of contracts was explicitly identified by all stakeholders as a matter of central importance for race relations, social justice, and equal opportunity in Guyana.
It added that the 1999 Constitution Reform Com-mission (CRC) agreed, therefore, to establish the Public Procurement Com-mission as a body with constitutional powers to address this national problem.
The opposition charged that the PPP/C, during its previous term in office, thwarted both the establishment and the functioning of the procurement commission.
“Given the PPP’s track record, it is no wonder that the government’s only response on the Tepui contact scandal was to say, through its Minister for Finance, that it wishes “to assure the Guyanese public that this PPP/C government, led by His Excellency President Dr. Irfaan Ali, remains firmly and unwaveringly committed to good governance and accountability, including through the maintenance and preservation of public bodies that can withstand scrutiny.” Sheer platitudes! Sheer hypo-crisy! The government evidently regards Guyanese as either blind or fools”, the opposition thundered.
Stating that the Tepui contract award and the other such dubious awards are merely the tip of the iceberg, the opposition said that it was calling for:
1. A full and thorough investigation of NPTAB and the public procurement system.
2. The enactment of legislation to give the PPC clear-cut powers to revoke contracts and impose penalties whenever breaches, non-compliance, and fraud are discovered.
3. The urgent drafting and enforcement of regulations by the PPC using its powers under the current procurement act.
4. The termination of the Tepui contract in keeping with the position of former Public Procurement Commission Chair Carol Corbin’s position. The opposition reported her as saying that the Commis-sion should “recommend” to the procuring entity that they terminate this contract.
“What we want to emphasize, in closing, is that what we are facing with the PPP is a total lack of political will to stamp out corruption and cronyism. They have deliberately decided not to enforce the law, to empower only a narrow section of elite society, and as a result even the changes we recommend must be met with political change. Other-wise, we will continue to hear idle talk and no action. Guyanese must use their vote to ensure the PPP is prevented from further undermining our government and its institutions”, the opposition said.
More than six months after a complaint was lodged by APNU+AFC MP David Patterson about a pump station contract award to Tepui Inc, the procurement commission found major breaches in the evaluation process but said it could do nothing about it as a contract has already been concluded.
The PPC on April 16 issued a summary of findings since Patterson was not an aggrieved party and only entitled to recommendations on the way forward.
The PPC said “…on the entry into a contract, privity of contract issues arise. There is nothing within the statutory framework which permits the commission to revoke, rescind, recall and or in any way alter, suspend or stop the contract once entered”.
The award of the $865m Belle Vue Pump Station to Tepui Inc had raised questions from the outset as its key principal Mikhail Rodrigues was not involved in construction but was known to be a confidant of Vice-President Bharrat Jagdeo and with ready access to government.
In its 35-page summary, the PPC elicited answers from the NPTAB – whose evaluation committee made the choice of Tepui – and the procuring agency, the National Drainage and Irrigation Authority (NDIA). Not only were both tardy in answering the PPC, they only provided some of the documents requested.
Tepui was required to have had the experience of having completed one project of a similar nature within the past five years. Similar projects “shall include pump stations, sluices and drainage structures”. Having been incorporated less than a year before, Tepui did not have these qualifications, yet the evaluation committee of the NPTAB found its bid to be responsive.
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