As I was about to prepare this article, two news items caught my eyes. The first relates to the announcement that the National Procurement and Tender Administration Board (NPTAB) has since received notification of Cabinet’s no objection for the New GPC to be the sole pre-qualifier for the Government’s pharmaceutical requirements. The second item relates to the termination of the contract for the design and construction of the Specialty Hospital and the filing of a Court action for the recovery of amounts paid to the contractor.
Recapitulation of Last Week’s Article
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 based on “openness, equity and efficiency” (IACAC) and “transparency, competition and objective criteria in decision-making that are effective, inter alia, in preventing corruption” (UNCAC). These overarching principles have been reinforced by the Guyana Constitution which provides for the establishment of the Procurement Commission to monitor public procurement to ensure that it is conducted in a “fair, equitable, transparent, competitive and cost effective manner”.
Regrettably, despite the lapse of 13 years, this important constitutional body has not been activated because of the Administration’s refusal to give up Cabinet’s involvement in the procurement process. As a result, the NPTAB has been carrying out the functions of the Commission but this is meant to be a temporary arrangement. The NPTAB, however, lacks the much-needed independence to effectively discharge this responsibility, given the way its members are appointed as well as its reporting relationship. There is also no independent oversight of the operations of the NPTAB which has responsibility for all contracts of $15 million and over.
Several key provisions of the Procurement Act have not been adhered to since the Act came into effect on 1 January 2004. These include:
Placing no restrictions on invitations to bid on the basis on 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 and 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.
No Discrimination based on Nationality
Section 5 of the Procurement Act specifically prohibits a procuring entity from imposing any criterion, requirement or procedure with respect to the qualifications of suppliers or contractors that discriminates against or among suppliers or contractors or against categories thereof based on nationality. In addition, Section 7 provides for suppliers or contractors to participate in procurement proceedings without regard to nationality.
Despite these requirements, invitations to tender for the expansion of the East Coast Demerara Road from Better Hope to Belfield were restricted to Chinese companies. China Railway First Group Ltd. won the contract from four bidders. The Cabinet had rejected NPTAB’s recommendation that the award be made to another Chinese company mainly on the grounds that it was not the lowest bidder.
Similarly, invitations to bid for the design and construction of the Specialty Hospital were restricted to Indian firms. Surendra Engineering won the contract although it did not have requisite experience for the works to be undertaken, compared with the other bidders. The company is also the supplier of 14 drainage pumps based on the award of a contract in 2011. To date, it is not clear how many pumps were supplied; and whether they met the specifications contained in the contract. In addition, the award of the contract for the Cheddi Jagan International Airport, Timehri Expansion Project was made to China Harbour Engineering Co. Ltd. There is, however, no publicly available information as to whether there were other bidders as well as the basis of the award.
The provisions of the Act apply to all procurements unless they conflict with any provision of an international agreement. The financing agreements for the above projects with China Exim Bank and the Exim Bank of India are not international in character and there is therefore no justification for setting aside the requirements of the Act by restricting the tendering to Chinese and Indian companies. Such action is also inconsistent with the principles outlined in IACAC and UNCAC.
One hopes that the Government will succeed in its efforts to recover the amount of US$4.2 million paid to the contractor in addition to its claim for damages. The failure to do so will result in a significant financial loss to the country. Would the Cabinet bear the responsibility for this loss, considering its offer of no objection to the award of the contract to a company that lacked the requisite experience to execute the works? Should we not also hold both the NPTAB (which recommended the award) the Accounting Officer (who signed the contract) accountable for this failure?
No discrimination against particular contractors and suppliers
It is a fundamental principle that specifications for the procurement of goods and services and the execution of works must be framed in such a manner so as not to favour particular suppliers. If one were to reflect on the revised criteria in the advertisement for the prequalification of suppliers of the Government’s pharmaceutical requirements, one would be extremely hard-pressed to accept the argument that the criteria were biased only in favour of safety. Reproduced below is a summary of the criteria used in the prequalification exercise.
The safety of items supplied carried only 5 out of 200 points. If the infrastructure requirement is included, the total points for safety would amount to 30 points or 15 per cent. The revised criteria were also developed without consultations with potential suppliers to enable them to put mechanisms in place as regards the 30,000 square feet of temperature-controlled storage facilities.
As regards previous experience, it is obvious that only the New GPC would have been prequalified, having been the only supplier of the Government with more than seven years’ experience with contracts of over $500 million. Is this not enough evidence of bias against other potential suppliers?
The above considerations apart, how does one explain that both the NPTAB and the Ministry of Health heard nothing from the HPS after he had announced the prequalification award almost two months ago? Why did the NPTAB not make enquiries from the HPS, say, one week later? Why is this laissez faire attitude allowed to prevail, considering that we are dealing with the health of most of our citizens who do not have the financial resources to seek medical attention at private hospitals and/or from doctors in private practice? It was only after persistent enquiries from the media and the filing of a Court action by one of the aggrieved bidders that a forced disclosure was made.
Ten months are about to elapse and no contract has been awarded although the prequalification advertisement was made close to a year ago. Does this state of affairs not boggle the mind when one considers that we dealing with essential drugs and medical supplies for the State-owned Georgetown Hospital and regional hospitals and health clinics throughout the country? One suspects that the Administration is not uncomfortable with the present state of affairs since in all probability the New GPC would have continued to supply drugs and medical supplies based on an extension of its 2010-2013 contracts. Indeed, it is inconceivable that no drugs and medical supplies would have been procured since the beginning of the year.
To be continued –
