In Guyana, public procurement accounts for approximately $150 billion or 70 per cent of the national budget. Given the enormity of this expenditure, there must be detailed rules and procedures to ensure the highest degree of transparency in the award of contracts; rigid monitoring of the supply of goods and services and execution of the works; and effective ex post evaluation to ensure that the State receives the best value for money. If an effective system is not in place, taxpayers, contractors and suppliers, indeed the general citizenry, will lose faith in the system.
In such a circumstance, allegations of corrupt behaviour involving public officials are likely to surface although there may not be any corruption involved. Given the opaque nature of corruption, perceptions become the yardstick for assessing levels of corruption. Both the Inter-American Convention against Corruption (IACAC) and the United Nations Convention against Corruption (UNCAC) emphasise the importance of having in place effective systems for public procurement. IACAC advocates systems that “assure openness, equity and efficiency” while UNCAC refers to the establishment of systems based on “transparency, competition and objective criteria in decision-making that are effective, inter alia, in preventing corruption”. Guyana is a signatory to IACAC since the latter’s adoption on 29 March 1996. It also acceded to UNCAC on 16 April 2008.
Constitutional
Amendment of 2001
The Constitution was amended in 2001 to provide for the establishment of the Public Procurement Commission “to monitor public procurement and the procedure therefor in order to ensure that the procurement of goods, services, and the execution of works are conducted in a fair, equitable, transparent, competitive and cost effective manner according to law and such policy guidelines as may be determined by the National Assembly”. This was a significant development since the issue of public procurement has been elevated to the Constitution, with some of the provisions requiring the approval of two-thirds of the elected members of the National Assembly, if they are to be varied or amended.
A key function of the Commission is the monitoring of the performance of procurement bodies as well as ministerial, regional and national tender boards with regard to adherence to rules, regulations and policies on public procurement. The amendment was in response to persistent criticisms from the Audit Office of the systems existing then which many stakeholders believed did not provide them with the level of confidence as to the fairness and transparency in the procurement process. There was also no mechanism in place to address their concerns.
Although the Cabinet was required to approve of contracts in excess of a certain amount based on the recommendations of the then Central Tender Board, it was not expected to play an overseeing role, given the Cabinet’s involvement in so many other matters of national importance as well as its lack of expertise in public procurement.
It was for these reasons that the Constitution provides for the establishment of a dedicated Commission comprising five members with expertise and experience in procurement, legal, financial and administrative matters. The Cabinet’s involvement was to have ceased or progressively phased out upon activation of the Commission.
Procurement Act of 2003
The Procurement Act of 2003 replaced the Tender Board Regulations which had become outdated and which did not have the force of law. It is a comprehensive and modern set of rules codified in the form of legislation. Areas covered include:
* Prequalification of suppliers and contractors to ensure that the requisite criteria are met, especially as regards experience, technical competence, facilities and equipment, and financial standing;
* Recording of procurement proceedings from initiation stages to the final contract award, including the publication of such awards;
* Creation, membership and role of the various tender boards, including the National Procurement and Tender Administration Board (NPTAB);
* Methods of procurement, including open, restricted and sole tendering, and the criteria for determining the methods to be used;
* Procedures for invitations to bid, submission of tenders and their evaluation;
* Administrative review, including review by the Cabinet, and procedures for dealing with complaints from suppliers and contractors; and
* Procurement by public corporations and other bodies in which controlling interest vests in the State.
Non-establishment of the
Procurement Commission
The Act acknowledges the non-establishment of the Procurement Commission and accordingly vests with the NPTAB the responsibilities of the Commission until such time that it is activated. Clearly, this was a temporary arrangement. Regrettably, after 13 years, the Commission is yet to be activated. The Administration made it clear that it is not willing to relinquish the Cabinet’s involvement in the procurement process and has declined to nominate members of the Commission. Its argument is that since the Administration is accountable to Parliament for the use of the budget resources, it should have a say in the award of major contracts. However, it is the very Parliament that decided otherwise at a time when the Administration held a majority in the Assembly.
For ten years, the Administration had no difficulty ignoring the pleas of the various stakeholders to have the Commission activated and never felt obliged to explain its position. Following the loss of its majority status in the Assembly in the 2011 General Elections, those pleas became more vociferous, with several civil society organizations adding their voices, most notably being the Transparency Institute.
The Administration was therefore forced into the back foot to justify its inaction.
If the Administration feels strongly about retaining the Cabinet’s role in the procurement process, then it should initiate steps to have the Constitution amended. Until such time that this happens, good governance practices and adherence to the rule of law would dictate that the constitutional and legislative requirements are strictly observed.
On the assumption that the Administration succeeds in reverting to the status quo through a constitutional amendment, it would be necessary to put in place mechanisms to avoid possible bias in the award of public contracts to favoured individuals and firms with links to the ruling party. Even many of that party’s staunchest supporters would admit that such bias does exist; there is corruption in the award of public contracts; and there is unexplained wealth being flaunted with impunity by many senior public officials and those in positions of power and influence. If there is no corruption involved, how does one explain the various violations of the Procurement Act relating to the following?
* Placing no restrictions on invitations to bid on the basis of nationality;
* Ensuring the criteria used for selection are such that they do not discriminate against particular contractors and suppliers;
* Award of contracts based on the lowest evaluated bid, as opposed to the lowest bid, taking into account previous experience, capacity, facilities and equipment, and other associated factors;
* Communicating with unsuccessful bidders the basis of the award why they were not selected;
* Having a Bid Protest Committee in place to address complaints from aggrieved bidders;
* Ensuring valid and adequate performance bonds are obtained as a guarantee for satisfactory completion of works and the supply of goods and services; and
* Sanctioning contractors and suppliers for consistent failure to perform to expected standards.
Apart from these violations, various reports of the Auditor General have highlighted over-payments to contractors and suppliers, defective works executed, and outstanding delivery of essentially supplies, among others, without evidence of any action taken against the defaulters.
In Jamaica, the Cabinet does have a say in the award of public contracts. However, there is a Contractor General who, along with a staff of over 50, monitors all public procurement to ensure that the rules and procedures are strictly observed, and good value for money is obtained. The Contractor General initiates his own investigation if he has reason to believe that all is not well in respect of a particular contract, and reports the results to the Legislature.
However, he does not have powers of prosecution. Should Guyana embrace such a model, it would be necessary to clothe the Contractor General with such powers.
The argument that we already have an Auditor General in place and therefore there would be duplication of work is not a valid one. Jamaica has an Audit Office that does far superior work than ours, yet it has found it necessary to have both systems in place. Besides, our Audit Office lacks the professional and technical skills and is barely able to carry out the minimum that is required of that office.
It has so far shied away from reviewing certain areas of national concern where huge amounts of public resources have been expended. These include the Marriott Hotel, the Amaila Falls Hydro project, the Lotto Funds and the Specialty Hospital.
The Auditor General is also yet to report on the expenditure on the Great Floods of 2005, the Cricket World Cup of 2007 and the 2008 CARIFESTA.
In the absence of the Procurement Commission, there is no independent oversight of the operations of the NPTAB which also lacks the requisite and much-needed independence to function effectively. The Minister of Finance, a key Cabinet member, appoints the seven-member Board with a reporting relationship to him, and it the Cabinet that approves of the award of major contracts based on recommendations of the NPTAB. Is it any wonder that there is only one publicly known case where the Cabinet withheld its no objection?
-To be continued-
