Small contractors will still have to compete with big companies for all construction projects as this sector is not covered by recently-passed legislation for small business to get 20 per cent of all government contracts.
“You may recall some time ago the PPC [Public Procurement Commission] had advised that the ‘set asides’ programme for small businesses could not be implemented unless there was an amendment to the Procurement Act. This has now been done, but the Small Business Act also needs to be amended to include procurement of ‘construction works’. Unless this is done, they are limited only to participating in procurement opportunities to supply goods and services to government but not ‘construction works’,” PPC Chairperson Carol Corbin told the Sunday Stabroek.
Even as she hailed the recent amendments to the Public Procurement Act of 2003 that sets aside 20 per cent of all government contracts for small business, Corbin said that similar amendments in relation to construction must be made in the Small Business Act 2004.
“The Legal Affairs Ministry has done the amendment to the Small Business Act to include ‘works’ and this has been sent to the Ministry. [I am] not sure if this has been tabled in Parliament. No one has been able to confirm this as yet,” she said.
The Small Business Act provides for 20 per cent of goods and services to be set aside for small contractors. Given that this did not include ‘works,’ small contractors still have to compete with big contractors for all construction projects.
Since her appointment to the PPC, Corbin has been highlighting that while both government and contractors were elated that 20 per cent of all contracts have to be set aside for small business, implementing the provision had to be done within the confines of the law.
“It is in the Small Business Act but not in the Procurement Act. The Procurement Act is the principal act that governs procurement and which guides procuring entities,” she had previously explained to the Sunday Stabroek.
“There is nothing wrong with giving preferential treatment…many other jurisdictions do it but it is in their Act—South Africa, Tanzania, Trinidad and other places…We have done the research…but it must be in the law. The opinion of the PPC is that the Procurement Act must be amended before this can be implemented properly,” she added.
Corbin had said that while she has no problems with quotas to cater for specific groups, that mechanism must be guided by law since it is currently discriminatory to shut out large contractors or any other group from bidding or awards.
She had pointed out that the Small Business Act is at variance with the Procurement Act and quoted from Section 5 (4), which states, “Subject to section 39 (6)(b), the procuring entity shall establish no 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 on the basis of nationality.”
The government on Wednesday passed long-awaited amendments to the 2003 Procurement Act that will ensure that small businesses are awarded at least 20 per cent of all state contracts. The legislation will become law when signed by President David Granger.
Repeal
Minister of Finance Winston Jordan, in whose name the amendments were tabled, on Wednesday also indicated that government will repeal the current procurement legislation as it is in dire need of improvement and they were advised to instead pass a new Act.
In the interim, he said that government has to deal with what he called “the low hanging fruits” while they await the Ministry of Legal Affairs action on a new Act.
Corbin, meantime, said that the PPC is in full agreement with the recently-passed amendments. “In keeping with our function to review the legislation and make recommendations to the National Assembly, we had collaborated with NPTAB [National Procurement and Tender Administration Board] and the consultant to review the current Act and these recommendations for immediate amendment were made by the PPC to the Minister of Finance to facilitate formal access to government procurement by small businesses and to make legal a requirement for procuring entities [to] prepare their procurement plans and submit to the PPC so that our constitutional mandate to monitor public procurement [is fulfilled],” she said.
Corbin added that the PPC was pleased that amendments catering for restricted tendering had also been passed.
This was another area that has been highlighted by the commission as they called out procuring entities about their continuous breach of the laws. “The PPC is also happy that the government has amended Section 26 of the Procurement Act. Previously, procuring entities were in breach of the Act when they used the restricted tender method to award contracts for which the values often significantly exceeded the amount stated in the Regulations. This is because they misinterpreted that section of the Act. The amendment addresses this issue, which the PPC had highlighted since 2017. The Ministry of Legal Affairs has concurred with our position and made the change, which allows procuring entities to use this procedure to award contracts of unlimited values, once the stated conditions are met,” she said.
