The state bodies responsible for procurement had urged government to increase the thresholds for restricted tendering since last year as the sums catered for under the law “did not make practical sense,” according to Chairperson of the Public Procurement Commission (PPC) Carol Corbin.
Corbin said over the years, state entities have been constantly breaching the Procurement Act in their use of the restricted tendering process and were warned of these violations by the PPC last year. Subsequently, she noted, both the PPC and the National Procurement and Tender Administration Board (NPTAB) notified government of the breaches and made recommendations for the thresholds to be increased as it was felt the sums were too low. “In the past, the procuring entities were breaching the law where they had restricted tendering for contracts more than $3 million and $10 million. We brought that to the attention of NPTAB and the government, that the entities were breaching the [Procurement Act of 2003],” Corbin told this newspaper in a recent interview.
Asked if she believed that the PPC’s observation and warning may have led to government increasing the thresholds for restricted tendering and Requests for Quotations (RFQs), she said it may have been a contributor. “It is possible, because the $3 million and $10 million did not make practical sense,” she said.
The government recently effected significant increases in thresholds for the restricted tendering of contracts for goods and services and construction.
A circular, signed by Deputy Chairman of the NPTAB Mark Bender, and released by PPP/C parliamentarian Juan Edghill, advised permanent secretaries, agency and corporation heads and regional administrations that the threshold for restricted tendering in the case of contracts for goods and services has risen from $3 million to $10 million –an increase of 233% – while the threshold in the case of construction has risen from $10 million to $20 million. Additionally, they can also now use RFQs for contracts valued up to $3 million, which is a 50% increase over the previous threshold of $1.5 million.
Bender has emphasised that it was two methods of procurement at the national level that had changed but the thresholds for ministerial or regional agencies remain the same.
Former Auditor General Anand Goolsarran has said that the increases are legal even though the timing is suspect. However, Opposition Leader Bharrat Jagdeo and attorney Christopher Ram have claimed that the increases are illegal.
Jagdeo had called for the PPC to investigate, even as he warned heads of agencies not to get ensnared by illegalities. Jagdeo contended that the Act clearly gives the Cabinet, not the minister, the power to review the threshold. He said the lifting of the thresholds was illegal as this was the function of the Cabinet – which no longer exists – and the PPC.
“There is no Cabinet. The Cabinet was resigned, so that leaves only the Public Procurement Commission and the Public Procurement Commission has not met on this matter. So [Finance Minister Winston] Jordan acted illegally when he acted on the advice of the board that he controls,” he said.
Ram, for his part, said, “to cite the Procurement Act without any reference to or consideration of the Constitution, in my view, does not do justice to the entirety of the issue.”
‘Need to review’
Addressing the issue, Corbin emphasised that government acted legally and while the timing may seem suspect to some, it was a matter under consideration since last year.
Ministry of Finance sources had also explained to this newspaper that the volume of work at the NPTAB was also discussed.
“The Act says the PPC shall monitor and review all the legislation, policies and measures for compliance with the objects and matters under its purview and report the need for any legislation to the National Assembly. It doesn’t give us the exclusive right to report the need for legislation to the National Assembly in procurement. It does not mean that the National Board, which is involved in the administration of procurement, that they cannot also note issues that would make their work more efficient; that they can’t recommend to the minister that there can be amendments to the law. As I was advised, any man in the street can recommend changes to the law. It is for the lawmakers to consider it and make the necessary changes if they feel it is appropriate,” Corbin said.
“We can make recommendations and they don’t take them on board; it is not absolute. And they [took] it on board and make the changes. What he is saying…is that only we could make changes. That is what Mr Ram is saying…he is saying that because the Constitution says this, the Procurement Act lower than the Constitution and that is why the minister is not legal. Mr Goolsarran said what the minister did was legal but his contention was the timing was suspicious. I would say the timing is not suspicious because we wrote the minister recommending that they should be making these changes. Not necessarily the threshold amount $10 million to $20 million but that we need to look at thresholds, we need to review the thresholds,” she explained.
Corbin reiterated that the PPC had brought the issue of threshold increases and the fact of breaches of the Procurement Act to the attention of the government and the NPTAB since last year. “We brought this to their attention. I know NPTAB sought advice from the Ministry of Legal Affairs. And they advised us that they [NPTAB] had sent a circular out to all procuring entities that they could not use the restricted tender procedure for contracts, [for] which the values exceeded the threshold $3 million and $10 million. In the latter part of 2017 and the whole of 2018, we should not have seen any restrictive tenders exceeding those values,” she added.
Corbin pointed to the controversial US$1,891,443 HDM Labs contract for the supply of drugs to the Ministry of Health, saying it breached the laws as it went over the limit by hundreds of millions of dollars. “If you look as recent as 2017, the HDM contract, look at the value of that contract and it was done using the restricted tendering method, the reason being they were misinterpreting the law,” she said.
But the PPC, in its analysis of the procurement sector, identified the breaches and notified both government and the NPTAB.
Corbin said that the Procurement Act has very clear stipulations for the use of restricted tendering but these were not adhered to by agencies as they felt it could be used if they had individual deadlines.
“What has been happening is that when a procuring entity finds itself with limited time, they usually resort to that way,” she said.
“Does that make it right? No, because that is not a condition. If you read Section 26 of the Act, it doesn’t say anything about time. It says the goods and services by reason of their highly specialised nature are available only from a limited number of persons,” she stressed.
Conditions
Going forward, she said that procuring entities must adhere to the laws and the NPTAB will also have a role in ensuring transparency of the processes, while notifying the public of contracts that were awarded using restrictive tendering.
“The tenderers have to be identified as those contractors, because the nature of the items are so complex, only they can supply them and be aware that these are the only people that can provide, from that group. You will send an invitation asking them to tender with the standard bidding documents. That now goes to NPTAB, it is opened there. That information has to be published on the website, that these tenders were opened on such and such a date. Because it has to follow all the other procedures. An evaluation committee has to be established, that independent evaluation committee reviews and does just as they would an open tender. The only issue is it may not be as competitive a process and it may not be as transparent a process as the open tender process but there are conditions to be observed,” she said.
And as it is anticipated that the restricted tendering method would not be used regularly, Corbin said that it should be easy for the procuring entities to find bidders for contracts that warrant the process.
“Remember, this is an exception. This is not something that you will use on an everyday basis. One would expect over time that a procuring entity may be able to say that because you would have been launching open tenders and you notice only three suppliers that have been able to supply. It is a matter of experience,” she said.
