Bahamas
The government’s landmark public procurement legislation took effect on September 1, after months of preparation and years of legislative reform.
The Public Procurement Act, 2021, has implications for all government entities and state-owned enterprises, which have been undergoing training and orientation exercises over the last four months.
The Public Procurement Department, located in the Ministry of Finance, is fully established. Carl Oliver is serving as acting chief procurement officer while the recruitment exercise of the head of the department remains ongoing.
To implement the Act, all of the required ministries, agencies and other entities have set up their own procurement units and tenders committees, which will self-administer and oversee the contract process under their budget remits up to specified financial thresholds.
Acting Financial Secretary Marlon Johnson said: “This is a government-wide process that has taken time to rollout and will take time to iron out. The Ministry of Finance has conduct training sessions for all government entities as well as external stakeholders.”
He added that public education activities will be ongoing.
The ministry co-hosted a live two-day webinar series last month in collaboration with the Bahamas Chamber of Commerce and Employers’ Confederation, with about 200 registered participants and over 5,000 online views. There will be ongoing public education through the ministry’s social media channels and other stakeholder outreach.
“The department will ensure that the reporting requirements on procurement activities are met, as well as the requirements for publication of the details of contracts awarded,” said Johnson.
“We anticipate the first publication online and in the media before the end of the month and that the publications will happen at set intervals thereafter.
“The ministry and the new Public Procurement Department will work to ensure all public entities operate consistent with the provisions of the new law.”
A key provision of the new law is the requirement that bids be facilitated via an open online platform. The eProcurement and Suppliers Registry has been operational for some time in preparation for the new legislation.
Up to yesterday, there were 2,527 business suppliers registered on the eProcurement and Suppliers Registry. These businesses will now benefit from access to electronic notifications for all government tenders, and have the ability to be seen by all government entities seeking to source goods and services.
Training for government entities will be ongoing.
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Guyana
The National Procurement and Tender Administration Board (NPTAB) yesterday distanced itself from a decision to retender a contract, as claimed by the Ministry of Agriculture, and its Board will meet next week to discuss the issue.
An NPTAB official said that the Board will want to clarify its role, including that it “does not decide on re-tendering,” as if a contract should be advertised again it lies solely with the procuring entity, which “recommends and justifies” such decisions. “NPTAB merely facilitates the decision of the procuring entity,” the official said.
Chairman of the NPTAB Tarachand Balgobin yesterday told Stabroek News that he is currently on leave and won’t be back at work until next week. He said that the Board is scheduled to meet next Tuesday, when the issue will also be discussed.
He noted that he is not au fait with the matter, which involves the recent retender for the supply of steel sheets for the National Drainage and Irrigation Authority (NDIA).
Following the retender, which received 12 bids, the Ministry of Agriculture issued a press release on Monday in response to a Kaieteur News report that highlighted the retendering.
The Ministry and the NDIA, which announced the withdrawal of the release last night, sought to deny any role in the decision to retender as it claimed that the decision would have to have been made by the NPTAB. “…by virtue of the Procurement Act 2003, public procurement of goods and services up to a certain limit is done exclusively by the NPTAB, a body that is independent, separate and apart from both the Ministry of Agriculture and the NDIA. The NPTAB has its own employees and the BIDS received through the tendering process are assessed by evaluators drawn from across the public sector by the NPTAB. Indeed, no evaluators are drawn from the sector whose BID is being evaluated. In summary, therefore, the Ministry of Agriculture nor the NDIA plays any role whatsoever in the tendering of contracts,” the release stated.
“The tendering of bids, acceptance of bids and subsequent award of bids are done through the [NPTAB] once it is above a prescribed limit. All these projects named in the articles are above that prescribed limit and therefore falls under the ambit and control of the NPTAB and not the Ministry or the NDIA,” it added.
The release further said that if an aggrieved bidder wishes to know the ground for the rejection of the bid, they can contact the NPTAB for such information.
The Ministry quoted Section 40 of the Procurement Act as it sought to explain that it was merely following instructions. “Section 40 of the Procurement Act 2003 states that “(1) Subject to approval by the National Board, if so specified in the solicitation documents, the appropriate board may reject all tenders at any time prior to the acceptance of a tender. The appropriate board shall upon request, communicate to any supplier or contractor that submitted a tender the grounds for its rejection of all tenders, but is not required to justify those grounds. 2) The appropriate board shall incur no liability, solely by virtue of its invoking subsection (1), towards suppliers or contractors that have submitted tenders. (3) Notice of the rejection of all tenders shall be given promptly to all suppliers or contractors that submitted tenders.”
“Therefore, based on the above, the Ministry of Agriculture nor the NDIA cannot request retendering or rejection of bids. It is only the National Procurement and Tender Administration Board (NPTAB) that can do so. The NDIA only provides the engineers estimate which is published along with the tenders for bids. Therefore, it cannot be said that the NDIA (the budget agency) has been turning down competitive bids as is being claimed in the September 19th, 2021 [Kaieteur News] article,” the release added.
However, the Procurement Act makes clear the role of the procuring entity.
As it pertains to examination and evaluation of tenders, Section 39 states that “(1) the procuring entity shall transmit to the Evaluation Committee all tenders timely received from contractors or suppliers promptly following the bid opening ceremony for the evaluation. (2) The Evaluation Committee shall, using only the evaluation criteria outlined in the tender documents, evaluate all tenders, determine which tenderer has submitted the lowest evaluated tender, and convey its recommendation to the procuring entity within a reasonable period of time, but not longer than fourteen days. (3) The procuring entity shall, if it agrees with the Report of the Evaluation Committee, publicly disclose the name of the tenderer identified by the Evaluation Committee as the lowest evaluated tenderer.”
It continues, “If the procuring entity does not agree with the Evaluation Committee’s determination, the procuring entity shall issue an advisory recommendation to the Evaluation Committee regarding which bidder should be the lowest evaluated bidder, which recommendation the Evaluation Committee shall observe.
The law says also that the “procuring entity may ask, within a reasonable period of time, suppliers or contractors for clarifications of their tenders in order to assist in the examination and comparison of tenders.” However “No change in a matter of substance in the tender, including changes in price and changes aimed at making a nonresponsive tender responsive, shall be sought, offered or permitted.”
Subject to certain provisions, the Evaluation Committee may regard a tender as responsive “only if it conforms to the requirements set forth in the tender documents; the Evaluation Committee may regard a tender as responsive even if it contains minor deviations that do not materially alter or depart from the characteristics, terms, conditions and other requirements set forth in the solicitation documents or if it contains errors or over sights that are capable of being corrected without touching on the substance of the tender”.
On June 25 this year, Stabroek News published a letter complaining about the retendering of steel piles for the NDIA. The letter read as follows:
“Bids were opened earlier this month and read for a tender contract (NDIA) to supply a fixed quantity of steel sheet piles. This is a re-tendering of a bid put out last November for sheet piling. No award was made last November although several bids were tendered for the correct grade of sheet pile at a competitive price by reputable bidders. There were complaints of the lowest bid not getting the contract last November. It is the norm that the lowest bid gets the contract once the company demonstrates the ability to carry out the work or supply the required materials. In this case, the re-tendered bid was awarded last Thursday in memo by cabinet and not to the lowest bidder but at some $40M above the lowest bid. Why?
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Jamaica
Member of Parliament for Hanover Eastern, Dave Brown, has expressed frustration with the procurement process which he has highlighted could leave projects in limbo for years while driving up cost.
Brown, who was making his contribution to the 2021/22 State of the Constituency Debate in the House of Representatives this week accepted that the guidelines outlined in the procurement process must be strictly adhered to and respected.
But, having listed several road projects that have been stalled, some for nearly four years, the second term MP said “…You would have recognised the recurring theme here. All these projects are said to be stuck in the procurement phase. The procurement process should not serve or create an impediment to work that is urgent”
“We must think of the time value of money and also the hundreds of lives that are impacted by delays due to procurement,” Brown told his colleagues.
He said tropical storms Elsa that impacted the island in July and Grace and Ida which followed in August, have made bad road conditions in his constituency worse.
“The passing of the named storms has caused further damage to the already horribly-deteriorated roads. Additional funding is now needed to have the roads fixed,” Brown said.
He shared that commitment was secured from the relevant authorities in 2017 to begin rehabilitation work from Hopewell to Cacoon Castle. The plan is to rehabilitate approximately 7,000 square metre of roadway.
Of course, for sustainability and to assure the integrity of the project, there is the plan to improve the existing drainage system and to construct retaining walls as required. The estimated cost is $60 million. This project is an imperative but it remains in the procurement phase,” Brown lamented.
He also pointed to the planned rehabilitation of the Chi-Chester to Golden Grove road which also went to tender in 2017. Brown said the bidding was aborted due to low tender and the National Works Agency has failed to provide an update on the project.
“The road is heavily traversed and is in fact the second most important road in Hanover Eastern,” he said.
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Guyana
In an effort to implement a structured system for emergency medical air transportation services, the Ministry of Health (MoH) is seeking to prequalify suppliers and has invited bids.
In advertisements in the daily newspapers last week, the health ministry stated that it was seeking the supply of air transportation services to conduct medical evacuations, transport of medical supplies, medicines and pathology teams and staff, to far-flung costal and hinterland communities.
Minister of Health Dr Frank Anthony explained to this newspaper that the ministry is seeking to eliminate the haste which often occurs when it comes to medical transportation of patients and health teams. He noted that once the tender documents are reviewed, they will be able to shortlist companies that are able provide the services requested.
“Anytime a doctor calls and says it is an emergency, we have to find a flight to send for that patient… you will have to scramble in most cases. We want to put some order to the process and get the supply of that service done in order,” he explained.
According to the ministry, tenders will be evaluated on the ability to transport patients of all categories, which includes the critically ill, persons with infectiousness diseases such as COVID-19 and tuberculosis; technical ability to monitor patients during air transfers; willingness to provide credit facility; an adequate response timeline; ability to operate during day and night; ability to transport regular passengers and luggage; and being able to operate at any of the fifty communities the ministry may require service from. Bidders were also asked to submit a price schedule for each destination for air medical evacuation, chartered flights to transport the pathology team with a two-hour waiting period, and other special chartered flights for medical supplies, medicines and medical teams.
The MoH noted that it will continue to provide necessary personal protective equipment for both patients and crew members during an emergency transfer, as well as adequate oxygen supply, blood and blood products, medical supplies, and medical equipment, where possible.
Suppliers, who can satisfy the requirements are asked to submit bids and a signed price schedule no later than Wednesday August 18, 2021, at 3pm.
The bids must be submitted to the Chairman of the National Procurement and Tender Administration Board at the Ministry of Finance.
Bidders are also asked to submit an original and electronic copy of the bid document in different sealed envelopes bearing the labels “original” and “copy.”
Bid documents can be purchased for a fee of $2,000 from the Ministry of Health, Accounts Department, at Lot 1 Brickdam, Georgetown.
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Bahamas
The Government has failed to meet the Auditor General’s demand to provide ownership details on all the companies awarded COVID-related contracts despite this being deemed “pivotal” to good governance.
The revelation, contained in the Office of the Auditor General’s report on how the Government used the proceeds from last June’s emergency $250m International Monetary Fund (IMF) loan that kept the country and government afloat during the pandemic’s peak, reveals its request for information on who beneficially owns these entities remains “pending”.
The June 25, 2021, report tabled by speaker Halson Moultrie in the House of Assembly yesterday, confirmed that the Auditor General and his staff were provided by the Minnis administration with a list of companies “that received payments for the delivery of goods and services related to COVID-19”.
That list was not disclosed in the report, which suggested that the information made available by the Government fell some way short of the full transparency its internal financial watchdog was seeking. “Request was made for the beneficial ownership of these business entities. However, the same is pending,” the Office of the Auditor General said.
However, it immediately referenced an IMF quote that stated: “Knowing who ultimately owns companies (their beneficial owners) is a key piece of data that allows governments and citizens to check that money is going where intended.”
Drawing on this, the Office of the Auditor General said: “We note that beneficial ownership full disclosure plays a pivotal role in the good governance in governmental financial affairs with respect to transparency and accountability; integrity and law enforcement; and mitigating the risks associated with abuse of public funds, corruption and financial fraud.”
The implication of all this is that The Bahamas still does not have complete transparency over the awarding of contracts to supply goods and services to the Government despite the enactment of the Public Procurement Act, set to take effect on September 1, and accompanying reforms such as the Public Financial Management Act.
While the names of winning bidders, and the reasons why they were selected, will be made public, it is still possible for politically-connected persons, family members/relatives and others to set up a ‘shell’ company or special purpose vehicle (SPV) to compete for government contracts without anyone being aware as the beneficial ownership details remain concealed.
Although annual company returns filed at the Registrar General’s Office can disclose the names of shareholders and/or directors, they are frequently concealed by the use of nominee entities or persons such as attorneys.
The Office of the Auditor General’s report is likely to trigger fresh scrutiny and political controversy. The Opposition Progressive Liberal Party (PLP) has claimed that the Government is in breach of the Emergency Powers (COVID-19 Pandemic) Regulations because it has failed to submit a report to Parliament on the “expenditures, suppliers for the goods and services procured, and the reasons those suppliers were chosen”.
The disclosure requirement is in Section 11.2 of the regulations. Philip Davis, PLP leader, said at the time: “Twice the proclamation of emergency has expired – at the end of June and in November – and neither time did you comply with that requirement,” he said. “Neither time. You are in breach of the law, sir. Why? What do you not want the Bahamian people to know about how you are operating behind closed doors?
“Which expenditures and which suppliers are so controversial that he cannot disclose them to the public, as he is so required? Perhaps we shouldn’t be surprised. Every promise ever made to the Bahamian people about accountability is sitting in the dustbin.”
Meanwhile, the Office of the Auditor General said Bahamian law also restricts the disclosure of beneficial ownership information based on an opinion it received from the Ministry of Finance’s legal unit. This opinion, which was attached to the report, said it was “suitable” to publish the name of a company awarded a government contract and details such as its shareholder register – but only if the latter is “publicly available”.
The Register of Beneficial Ownership Act gives the Government no authority to disclose “beneficial ownership information in relation to the tendering process”, while the Data Protection Act is another barrier to its release. “There is no law which imposes mandatory disclosure of beneficial ownership information on the Government,” the Office of the Auditor General added.
The Act restricts access to beneficial ownership details to law enforcement agencies and financial services regulators for purposes of responding to overseas legal requests, and any unauthorised disclosure is treated as a breach of privacy/confidentiality.
Nevertheless, the Office of the Auditor General recommended “addressing the beneficial ownership disclosure in terms of advancing and strengthening good governance”. It also called for “harnessing accountability in public procurement and financial affairs”, and “further strengthening good corporate governance of all legal entities doing business in the country”.
Research by Tribune Business reveals the beneficial ownership non-disclosure potentially places The Bahamas in non-compliance with one of the promises/commitments it made to the IMF in return for receiving the $250m low-cost loan based on the special drawing rights (SDRs) it had available with the Washington D.C. based organisation.
The letter submitted by The Bahamas to the IMF, which was co-signed by then-finance minister, K Peter Turnquest, and Central Bank governor, John Rolle, pledged: “We will publish procurement contracts of crisis mitigation spending, including beneficial ownership information of companies awarded procurement contracts, report quarterly on COVID-19 mitigation spending, and such spending will be audited by the Auditor General in accordance with international best practice within nine months of the end of the fiscal year, and auditing results will be published on the Government’s website.”
The IMF, in response, noted the same legal difficulties involved in accomplishing this.”Although The Bahamas has a beneficial ownership definition and mandates registered entities to provide such information, it is not clear that such information is required in the bidding process. As such, beneficial ownership information of companies awarded COVID-related contracts is not published,” it added.
“The authorities are collecting the relevant information and developing the website for publishing crisis-related procurement contracts. The authorities want to publish all fiscal year 2019-2020 contracts at once and thus are waiting until all information is collected. They are also working on the web design.”
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