A special ‘no objection’ role for cabinet is unwarranted

Self-evaluation
The specific ‘no objection’ role that cabinet plays currently has to do with evaluating how well and fair the procurement process itself has been working.  From a reading of Article 54 (1) of the Procurement Act 2003 available online, this specific oversight role of cabinet, “… to review all procurements …” apparently was derived from the absence of the Public Procurement Commission (PPC).  Since cabinet is part of the executive which has responsibility for public procurement, cabinet, in effect, is undertaking an evaluation of itself.  Persons are deliberately conflating this inappropriate role for cabinet with its right to reject a decision of an evaluation committee with which it does not concur.  Given that it enjoys and retains the implied right of ‘no objection’ under Article 39 (3) of the Procurement Act 2003, one must enquire as to the reason cabinet is seeking a ‘no objection’ role as part of the work of the PPC.

This article argues that cabinet should not be allowed to insert itself into the intended independent review into the functioning of the procurement system that is the constitutional prerogative of the PPC.  It also posits that Article 39 (3) of the Procurement Act 2003 should be amended to give cabinet the express right to a ‘no objection’ role if it feels that that role is not already available to it by virtue of the authority and control it has over the procuring entities.  In which case, Article 54 should also be amended to make it clear that neither cabinet nor any part of the executive would be part of the independent review mechanism that is the PPC.

Not trivial
The matter of the ‘no objection’ role of cabinet is not a trivial one that was the consequence of an oversight or bad legislative drafting that some would like Guyanese to believe.  This issue is at the heart of whether or not Guyana could ever practise “good government” as desired by Article 65 (1) of the Constitution, and that would allow parliament the space to perform its oversight function effectively.  The discussion also has a public finance value that lies in the separation of powers between the three supreme organs of democratic power in Guyana, namely parliament, the president and the cabinet, and its impact on the level and effectiveness of government spending.  To appreciate the meaning and significance of this dispute, one must first understand the role that cabinet plays in the procurement process and then compare that role with what the PPC is required to do.

Public finance benefit
There are many reasons that governments are allowed to acquire goods and services through the public procurement process.  Foremost among them is the public finance benefit of achieving economy and efficiency in the process of acquiring goods and services in the service of the public.  The ability to achieve economy and efficiency depends on how well the special market for public procurement works.  The need to bid in the procurement process promotes competition among suppliers and contractors for the supply of goods or services.  To the extent that there are many suppliers and contractors bidding for each job and the evaluation process works well, the resulting contract should provide the best value for money.  But even well-intentioned processes could be compromised.  This is particularly true when the buyer, in this case the government, has monopoly power and could exert inordinate influence over the decisions of the procuring entity.

Not theoretical
This is not a theoretical point since the entire procurement process is in the hands of the Guyana Government.  It must be kept in mind that the public procurement process is a chain of events that starts with the deliberations and decisions of the administration often made by its cabinet and political cohorts on what public goods and services should be produced.  These decisions appear in the national budget and are eventually given appropriations.  The cabinet is made up of ministers of the government.  Each cabinet minister is responsible for a ministry that has a portfolio of activities that must be undertaken.  The portfolio often reflects the policy priorities of the government and the ministries seek to ensure that the policy priorities are achieved.  One of the ways in which the ministries go about implementing the priorities of the government is through the purchase of goods and services or the undertaking of capital investments.  These functions are performed by agencies and departments of the government and by using the services of vendors or contractors.

No dispute
Each ministry, agency or department creates a tender board which has jurisdiction over procurement activities by that ministry or other public entity.  Each tender board of each ministry evaluates the purchase of goods and services using persons that the tender board of the ministry would have chosen.  Those chosen persons, who make up the evaluation committee, are usually approved by the National Tender Board.  In addition to controlling the tender board of the ministries, the administration also controls the National Tender Board.  By virtue of these two circumstances, the administration controls the procurement process in the public sector.  No one disputes cabinet’s authority to oversee the procurement process in its entirety.  In this context also, the ‘no objection’ role is redundant since that authority is already built-in to the procurement system and the expectations that Guyanese have of a properly run cabinet.

Evidence
The evidence for this is contained in Article 39 (3) of the Procurement Act which allows the authorities of every ministry to overrule a decision of the evaluation committee that it does not like.  This means that a contractor who is selected by an evaluation committee can be rejected by the cabinet through the minister responsible for that portfolio, or by cabinet itself.  According to Article 39 (3), any decision reversed by a cabinet minister cannot be overturned.  The noose is just as tight with respect to the appeals process.  A study of the appeals process shows that the administration’s grip on the procurement review is firmer than one realizes and a bidder with a grievance stands little chance of obtaining a fair review and any relief under the current review mechanism.  Even if a bidder is denied a contract for other reasons, an appeal is useless since the administration, through the Minister of Finance and the Attorney-General, picks two of the three members of the Bid Protest Committee (BPC).  The third panelist has to enjoy the confidence of the Minister of Finance to become a part of the BPC.  Contrary to the unsubstantiated claims being made by some, cabinet is firmly in control of the procurement process.

Role of PPC
A review of the functions of the PPC would show that it is not being asked to perform any procurement functions and certainly not any that are the responsibility of cabinet or the executive as a whole.  In fact, the PPC is being asked to evaluate the performance of the administration with respect to its public procurement practices.  For example, as an independent body, the PPC would monitor the performance of procurement bodies with respect to adherence to regulations and efficiency in procuring goods and services and execution of works.  In addition, the PPC would monitor and review the procurement procedures of the ministerial, regional and national procurement bodies as well as those of project execution units.  Further, it would investigate cases of mismanagement and propose remedial action.  In conducting an investigation, the PPC would have rights of compulsion in that it could make any person or any entity, including a ministry or government department, provide it with information.  What is equally valid is that the PPC is the entity that determines what rules and procedures the National Procurement and Tender Administration should follow.  It has the right to bring action against those persons who seek to manipulate the system for their benefit.

The public finance benefit of a functioning PPC is enormous.  It has the potential to help Guyana transform itself from a resource-driven economy to an efficiency-oriented one.  To the extent that a functioning PPC reviews past practices, it could expose patterns of unfair competition, unusual variances in contract spending by budget agencies and plain bad management of the financial affairs of the state, events that drive prices up and weaken the competitive strength of the nation.  In going forward, the PPC could help improve contract performance, increase competitiveness and aid companies in their search for more efficient ways to deliver products or services by making public the findings from the periodic analyses that it is required to undertake.  These positive externalities from an operating PPC contain benefits of immeasurable proportions for Guyanese businesses and households that are being denied them by the refusal of the administration to set up the PPC.

Dissimilar roles
Comparing the functions of the PPC with those of cabinet with respect to procurement, it becomes obvious that the roles are dissimilar and they do not overlap.  The PPC does not say if contracts should be approved or not.  It comes in after the entire procurement process was allowed to run its course.  The comparison of the roles of the two bodies clearly reveals that the establishment of the PPC does not impose any restraints on cabinet’s power to procure goods and services in a fair, equitable and transparent manner.  Nor does it prevent cabinet from exercising its ‘no objection’ authority at any stage of the procurement process.  A reasonable conclusion here is that the preoccupation of cabinet has very little to do with being denied the right to procure as the party responsible for executing the affairs of the state.  Instead, it seems to have more to do with not wanting to be held accountable for bad management or malpractice, including those that might be the result of its built-in ‘no objection’ authority.
In the interest of good government, the decision as to whether the procurement practices of the administration should be evaluated or not should not be an option for cabinet.  It should be a requirement and, to avoid a conflict of interest, neither the executive nor its cabinet should be a part of the evaluation exercise.  Consequently, the ‘no objection’ role of cabinet should be an internal management role that it should be performing in the normal course of business.  To make that clear, Article 39 (3) of the Procurement Act 2003 should be appropriately amended.  At the same time, whatever cabinet is doing ostensibly for the PPC needs to stop since it is, in effect, a conflict of interest.

Direct challenge
Furthermore, the desire to have cabinet as part of the evaluation process is a direct challenge to the separation of powers between parliament and the cabinet.  Parliament has oversight responsibilities and the PPC has a constitutional duty to report to parliament and to make all of its findings, good or bad, known to it.  All reports from the evaluation exercise of the PPC are to be submitted to parliament and not directly to the executive for action.  Additionally, the PPC has the authority to compel the administration to provide any information that it needs to get its work done.  The angst that the administration is feeling currently is its lack of control over parliament and not having an ability to frustrate any investigation or suppress information that would put it in a bad light should the work of the PPC ever get started and make such discoveries.  By seeking to insert itself into the work of the PPC, cabinet seems also to be seeking to influence the work of the PPC and the nature of the information that goes to parliament.

Status quo remains
From the foregoing, it should be clear that the ‘no objection’ role that cabinet claims is nothing more than a device designed to forestall the creation of the PPC.  The administration obviously feels that it wins as long as the PPC is not set up because the status quo remains in place and no malfeasance, if any exists, would come to light.  In the end, this is a decision for the Guyanese people.  They must decide if they want good government and accountability or if they want the continued wanton disregard for the laws and Constitution of Guyana.  If they want good government, they will insist that cabinet step aside and let the PPC be set up.  If they have no respect for the laws and Constitution of Guyana, they will let the administration keep making the false and pernicious argument about a ‘no objection’ role for cabinet.