Bahamas
THE United States continues to highlight the inadequacy of local legislation and enforcement efforts to combat corruption and conflicts of interest in public office.
In its latest Investment report, the US said the political system of The Bahamas remains “plagued by reports of corruption, including allegations of widespread patronage, the routine directing of contracts to political supporters, and favourable treatment for wealthy or politically connected individuals.”
The US report on The Bahamas, which has changed little over the years, said efforts to enforce conflicts of interest rules related to government contracts remain limited.
The Minnis administration passed new procurement rules in Parliament last year. The law will come into effect September 1, according to Financial Secretary Marlon Johnson.
Campaign promises to enact campaign finance legislation and fully enact the Freedom of Information Act remain unfulfilled.
“In May 2017, the current government won the election on a platform to end corruption,” the report said. “Early in the administration, the government charged a number of former officials with various crimes including extortion and bribery, theft by reason of employment, and defrauding the government. These cases were either dismissed, ended in acquittals, or are ongoing. The government reported no new cases of corruption in the executive, legislative, and judicial branches during 2020. Nevertheless, three Cabinet Ministers resigned in the first three years of the current administration under allegations of corruption, including the Deputy Prime Minister, the Minister of Financial Services, and the Minister of Youth, Sports and Culture.
“The Public Disclosure Act requires senior public officials, including senators and members of Parliament, to declare their assets, income, and liabilities annually. For the 2020 deadlines, the government gave extensions to all who were late to comply. The government did not publish a summary of the individual declarations, and there was no independent verification of the information submitted.
“The campaign finance system remains largely unregulated, with few safeguards against quid pro quo donations, creating a vulnerability to corruption and foreign influence. The procurement process also remains susceptible to corruption, as it contains no requirement to engage in open public tenders, although the government routinely did so. In February 2021, the government passed the Public Procurement Bill (2020), which reportedly overhauls current governance arrangements for government contracts to improve transparency and accountability.
“The absence of transparent investment procedures and legislation is also problematic. US and Bahamian companies alike report the resolution of business disputes often takes years and debt collection can be difficult even after court judgments. Companies also describe the approval process for FDI and work permits as cumbersome and time-consuming. The Bahamian government does not have modern procurement legislation and companies have complained the tender process for public contracts is not consistent, and that it is difficult to obtain information on the status of bids. In response, the current government passed a Public Procurement Bill and launched an e-procurement and suppliers registry system to increase levels of accountability and transparency. The Public Procurement Bill was passed in March 2021, but has not yet been fully enacted.”
The US noted that The Bahamas scored 63 out of 100 in Transparency International’s most recent corruption index.
“However, the country’s scores have dropped eight points since 2012, perhaps indicating an erosion of transparency,” the US said. “The Bahamas still lacks an Office of the Ombudsman to strengthen access to information, nor has it fully enacted its Freedom of Information Act (2017) or appointed an independent Information Commissioner. Although the current government is pursuing legislative reforms to strengthen investment policies, progress on these efforts has been mixed.”
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Bahamas
I wish to now elaborate more on the electronic portal that is the Bahamian government’s e-procurement supplier registry.
This was launched by the Ministry of Finance on December 19, 2017, with the then-deputy prime minister and minister of finance, K Peter Turnquest, saying: “This government administration is keeping its promise to bring greater accountability, transparency and modernity to the government by changing how persons and businesses bid for government purchasing opportunities, otherwise known as procurement.
“Procurement will move from a very paper-based, time-consuming process to an online automated system that utilises standardised forms with clearly-defined evaluation criteria. Interested bidders can prepare and submit documents through the online portal, which will be known as the e-tendering and supplier register system.
“More importantly, these initiatives will leap the country forward in terms of having a transparent and accountable use of public resources that will ultimately expand opportunities for a greater number of Bahamian businesses and save taxpayers some money in the process.”
Mr Turnquest said the government is a major procurer of goods, works and services, spending in excess of $1.475bn to deliver public services. “This underscores the importance of having in place effective, fair and efficient procurement arrangements to ensure that the best value is obtained for the monies being spent,” he added.
Again, on November 29, 2018, while opening the Ministry of Finance’s e-procurement reform seminar, which was held at the Pelican Bay Resort in Freeport, as well as officially launching the e-procurement and supplier registry system in Grand Bahama, the former deputy prime minister said: “The whole idea of the reform is to make the process of government procurement transparent, and to ensure that there is fairness across the system so that everyone has an opportunity.
“I know that for most businesses in The Bahamas that I have come across, one of the things that they have been concerned about is fairness and access,” he added. “We know how it worked in the past, where if your party is in power you get the contracts, and when your party is not in power, you’re out of luck.
“This system seeks to try to create some balance, some equity and fairness across the system, so that we can take out these kinds of bias. If we allow the system to work the way it has been designed to work, it is going to create equity and it will result in savings and GDP business growth for all Bahamians.”
More recently, Elsworth Johnson, minister of financial services, trade and industry and Immigration, said on March 15, 2021, while closing the debate on the Public Procurement Bill: “For about five years or more persons have been discussing the necessity of having an electronic process; how persons would tender, how they would appeal as Killarney said, and how persons can be treated justly.”
But it was just last month that his ministry advised the Department of Immigration to engage a vendor to provide meals for detainees of the Detention Centre. The electronic process and print media were not used to invite bids for this service, as prescribed by the government’s tender process for any contract in excess of $50,000.
In 2018, the Committee of Experts of the Follow-Up Mechanism on the Implementation of the Inter-American Convention Against Corruption (MESICIC), of which The Bahamas has been a signatory since 1998, visited this nation and interviewed myself and other officials from the Ministry of Finance to follow up on the public procurement reform process. This was part of a series of visits, and this one was considered as round five.
In their final report dated September 18, 2018, MESICIC made recommendations that the government should consider enacting a new comprehensive legal and regulatory framework which encompasses all the branches and agencies of the state applicable to the public procurement of goods, works and services.
It added that this should be done in a way that embodies the principles of openness, equity and efficiency as outlined in the Convention, and called for the creation of a centralised registry of contractors of works, goods or services.
MESICIC added that this should be mandatory for all state bodies and dependencies, while registration was also to include a list of sanctioned contractors in order to foster the principles of openness, equity and efficiency provided for in the convention.
It has been two years and seven months since the e-procurement supplier registry’s initial launch, and two years since all government ministries, agencies and state-owned enterprises were mandated to use the portal for all procurements.
To date there are 2,266 vendors who have registered on the system. However, 208 of them will not receive e-mail notices of the opportunities available to them because, since the departure of the international consultant and procurement officer at the Ministry of Finance in March this year, the ministry has lacked the ability to approve these vendors on the system electronically, causing them a grave inconvenience. The same dilemma exists for new buyers and those sending in requests for technical assistance via e-mail. Approximately four months have passed now but the Ministry of Finance also has yet to hire an IT systems manager to address these situations and more.
The following is a list of ministries, agencies, departments and state-owned enterprises (SOEs) that have not registered on the e-procurement supplier registry to date:
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Bahamas
NASSAU, BAHAMAS — Over 2,200 businesses are registered on the government’s e-Procurement system to date, according to Ministry of Finance officials, who noted that each government agency will have to produce an annual procurement plan.
The Ministry of Finance’s eProcurement and Supplier Registry System (ePSR) enables businesses interested in securing government contracts to participate in a “360-degree digital procurement process”.
According to Gaynell Rolle, undersecretary in the Ministry of Finance, 33 agencies have been trained on the new Public Procurement legislation
She noted that the Public Finance Management Act now requires every government body to maintain a higher level of transparency and forward planning with mandated annual and business plans and quarterly and annual reports, which must be presented to Parliament and published online.
“An important new provision in the Public Financial Management Act is called ‘objection to direction’. Essentially, if a public officer feels as though they were given a direction that goes against the act or any other legislation, there is now a legal process that empowers public servants to formally object,” said Rolle.
“This involves a written objection to the minister or public officer that gave the direction with further oversight by at least two other stakeholders, including the permanent secretary, the chairman of the Public Service Commission, attorney general or financial secretary.
“The intent here is to provide a way for public officers to uphold their oath while protecting themselves against future liability.”
Rolle noted that starting September 1, the procurement process for all departments, agencies, ministries and state-owned enterprises will be governed by the new Public Procurement Act.
“The procurement process is moving online. To receive tender notices and requests for quotes, all businesses must be registered on the eProcurement and Suppliers Registry,” said Rolle.
“To date, over 2,200 businesses are registered on the system. This was an optional process in the past, but now businesses must be registered or they will miss out on opportunities to secure government contracts when the new law takes effect on September 1.”
She added: “Approximately 33 agencies have been trained to date on the new legislation, and they are currently undergoing further training on the online portal. Under the new law, the tender’s board is being reconfigured.
“The Ministry of Finance now has a Public Procurement Department (PPD) to be headed by a chief procurement officer that will oversee procurement across government. The Ministry of Finance is currently advertising for this position.”
Rolle further noted that individual government entities will have their own procurement units and tender committees that will be empowered to award procurement contracts within preset financial thresholds, reducing the bottlenecks experienced under the previous model.
She pointed out that the new law requires every government agency to produce a detailed procurement plan at the start of the budget year and publish this report on the official website of the Public Procurement Department. That report will include a detailed breakdown of their procurement needs, estimated contract values and how the goods and services will be used.
“The new law makes special provisions for the minister to allocate a percentage of the procurement budget to small businesses, which are businesses with no more than a maximum of 50 employees, and revenue under $1 million annually,” said Rolle.
Rolle noted that the Ministry of Finance has kicked off an educational campaign to encourage more businesses to sign up.
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Bahamas
It was really not my intention to write another article before September, but so much has been happening on the public procurement front lately that I believe I am duty bound to respond to these issues.
On July 21, 2021, the US State Department released its annual Investment Climate Statement on The Bahamas. The report said of The Bahamas’ investment regime: “Negative aspects include a lack of transparency in government procurement, labour shortages in certain sectors, high labour costs, a bureaucratic and inefficient investment approvals process, time consuming resolution of legal disputes, internet connectivity issues, and high energy costs.”
It added: “The Bahamian government does not have modern procurement legislation, and companies have complained the tender process for public contracts is not consistent, and that it is difficult to obtain information on the status of bids.
“In response, the current government passed a Public Procurement Bill and launched an e-procurement and suppliers registry system to increase levels of accountability and transparency. The Public Procurement Bill was passed in March 2021, but has not yet been fully enacted.
“The political system is plagued by reports of corruption, including allegations of widespread patronage, the routine directing of contracts to political supporters, and favourable treatment for wealthy or politically connected individuals.”
While addressing the opening session of the National Conclave of Chambers of Commerce in The Bahamas on June 17, 2017, Dr Hubert Minnis said: “Corruption has cost The Bahamas untold hundreds of millions of dollars or more over the decades.
“Under the previous administration, there were constant complaints about having to see certain people in order to get a proposal reviewed or approved. My administration is committed to transparency, openness and accountability.”
I hate to be the one to say that sometimes annoying phrase: “I told you so”, but in my first two articles I questioned the government’s reasons for delaying the enactment of the Public Procurement Bill as the halt was totally unnecessary. I questioned whether this was done to facilitate the awarding of contracts to political supporters before an election. On June 21, 2021, while on the floor of the House of Assembly, the prime minister attacked me personally, referring to me as “an angry man”, and explained the reason for the Bill’s delay. “The Ministry of Finance is busy putting in place procedures, rules and training to ensure that the September timeline is met comfortably”, he said. If that was the case, as a procurement specialist I would have supported the delay.
Is the State Department analysis of the public procurement system of The Bahamas correct, or are they just angry men and women as well? First fact is that The Bahamas does not have modern procurement legislation because the Public Procurement Bill has not been enacted. In other words, it is not law.
With regard to US companies’ complaints that the tender process for public contracts is not consistent, and that it is difficult to obtain information on the status of bids, again they have a valid complaint. The e-Procurement Supplier Registry was to eliminate such issues because registration is free for all companies to have access to view bid opportunities, and to take part if they are eligible to do so. However, as I have said on numerous occasions, the government’s mandate for all ministries and agencies to place all procurement opportunities on the e-Procurement Supplier Registry is not being adhered to. They are not uploading or advertising their bids and, most importantly, the Tender Award portal – which is to be used to show all contract awards – has been used by only one agency, the Department of Environmental Health.
I was also not surprised when I read the “plenty to nothing” response to the US Investment Climate report from the Ministry of Finance. They failed to address a number of issues such as the selective bidding process presently being engaged in by larger ministries, including the Department of Public Works and Department of Education. This means they are actually sending bids to a chosen few, and then there is the total disregard for competitive tendering by the Ministry of Financial Services, Trade Industry and Immigration, which recently made a direct award of a $300,000 contract to a caterer to provide meals for detainees at the Department of Immigration’s Detention Centre.
One does not have to wait for September to address these issues, as the activities described above are contravening the existing tender policy and circumventing best procurement practices. The US State Department is simply saying that a blind man can see these abuses. Further, the Ministry of Finance could not outline one initiative they had undertaken to support the enactment of the Act scheduled for September 1. In fact, the Ministry is still lacking an experienced and qualified procurement officer to assist with its capacity building efforts. This scenario reminds me of Billy Preston’s song: “Will It Go Round in Circles?”
In his debut address on July 5, 2017, at a CARICOM meeting held in St Georges, Grenada, during the 39th regular meeting of the Conference of Heads of Government of the Caribbean, Dr Hubert Minnis said: “Corruption remains a formidable challenge to small and developing countries such as my own, and we are determined to brutally confront this challenge. In this regard, my government has implemented a policy of zero tolerance for corruption. Upon taking the oath of office, all ministers have been told that they would be immediately dismissed if they are found out to be soliciting or accepting payments. We will implement strong anti-corruption laws and measures.”
Had the government heeded the warning and enacted the Public Procurement Bill immediately, the use of the e-Procurement Supplier Registry would have been legislated five months ago which would have enhanced transparency in the bidding process. The early appointment of a Public Procurement Board and Tribunal would have had a significant impact as well, and there would have been no doubt in anyone’s mind that the government was serious about combating corruption. Be that as it may, this administration must now talk less about transparency but rather strive to be transparent.
NB: Daniel Ferguson, a retired chief petty officer with the Royal Bahamas Defence Force (RBDF), is a former procurement officer in the Ministry Health and Ministry of Finance, and former component co-ordinator for the Inter-American Development Bank (IDB) sponsored public financial management reform project, in particular the public procurement reform. He led the drafting team for the development of the Public Procurement Bill 2021, and public procurement regulations. He is a chartered member of the Chartered Institute of Procurement and Supply, with over 25 years of experience in public procurement.
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A pervasive culture of disregarding rules and procedures in government has left Auditor General (AG) Sonia Webster with some amount of concern.
During a live hearing of the Commission of Inquiry (COI), Webster said she found that it was becoming acceptable within the government to disregard procurement requirements.
“I think there needs to be an understanding that those rules are put in place to protect the government,” Webster said. “They’re put in place to protect transparency.”
Webster said the absence of these measures creates what she describes as ‘a slippery slope’. The AG also said she is concerned that if the practice is not arrested, it will be a very costly exercise for the BVI in the long run.
The issue of disregard for procurement procedures is one with which Webster said she has become intimately familiar in her 30-year tenure inside the office of the AG.
Webster said she has seen a willingness in public officers to basically bypass the rules and make excuses for having bypassed them.
Contract splitting lacks transparency
According to the AG, contract splitting has been and continues to be one of the biggest issues that circumvent the rules of procurement. She also described it as the most basic form of circumvention of tendering requirements and said the practise was not being regulated.
“The regulations in place for public procurement are insufficient to ensure transparency and value-for-money [when there is] contract splitting,” the AG noted.
She said the practice of contract splitting risks incidents of cronyism, favouritism, poor value for money, and the hiring of inexperienced contractors.
She recommended that the regulations for public tender be reviewed for improved transparency.
Even as the AG decried the practice, at least two former ministers in the previous National Democratic Party government who gave testimony during the COI, stated emphatically that Cabinet has the authority to override procurement regulations by splitting major contracts into smaller ones.
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