In our article of 9 December 2024, we began a discussion of the constitutional/legislative frameworks governing the establishment and functioning of the procurement bodies. This was in the light of the political Opposition’s call for representation on the National Procurement and Tender Board Association (NPTAB) as well as regional tender boards in order to reduce corrupt practices and to ensure transparency in the procurement process.
So far, we have discussed the establishment of the Public Procurement Commission (PPC) whose responsibility is to monitor public procurement and the related procedures to ensure that the procurement of goods and services and the execution of works are conducted in a fair, equitable, transparent, competitive and cost-effective manner. We also examined the way the members of the Commission have been appointed so far, as well as the quality and effectiveness of the work of the Commission. We concluded that the Commission’s work is likely to be enhanced significantly if its members are appointed based on professional and technical competence rather than on political considerations. This is especially so having regard to the Commission’s investigative role in relation to the award of contracts. It is public knowledge that several major contracts for infrastructure development works were awarded to individuals/entities that did not meet the qualification and experience criteria set out in the Procurement Act 2003 and there are so many cases of significant cost and time overruns, not to mention defective work being performed. We then expressed the hope that in the next round of appointments of the members of the Commis-sion, due next year, the Public Accounts Committee and the National Assembly will adhere scrupulously to the spirit and intent of the constitutional amendment of 2001.
In today’s article, we conclude our discussion on the subject by examining the legislative framework establishing the NPTAB as well as the Ministerial/ Departmental/Regional Tender Boards and the extent to which they are functioning effectively.
Public procurement prior to 2003
Prior to the passing of the Procurement Act, public procurement was governed by Regulations that can be traced as far back as 1958 in the form of the Financial (Amendment) Regulations 1958, No. 8 and the Tender Board Regulations 1958, No. 9. In 1983, the Ministry of Finance issued Circular 4/1983 titled “Procedures for the Guidance of Tender Boards”; while Finance Circular No. 4/1991 provided for increased limits on contracts for the supply of goods, services and the execution of works.
The Regulations provided for a hierarchy of authority limits and levels in the assessment of bids and the approval of the award of contracts. At the highest level was the Central Tender Board (CTB), responsible for adjudicating the award of contracts above certain amounts, subject to the approval of the Cabinet. Its members comprised the Secretary to the Treasury (renamed Finance Secretary) as the Chairperson; the Chief Works Officer; the Head of the Central Projects Unit of the State Planning Secretariat; the concerned Regional Executive Officer (REO) if the project was a regional one; the Permanent Secretary of the Ministry of Regional Development; and a representative nominated by the Vice-President of Economic Planning and Finance. Below this level were the Ministerial/Departmental and Regional Tender Boards, followed by District Tender Boards. Except in the case of the CTB, contracts were awarded subject to the approval of the Minister of Finance. At the lowest level, the Accounting Officer had the authority for entering into contracts, using a system of quotations.
The Ministerial/Departmental Tender Board comprised the Accounting Officer (Permanent Secretary/ Head of Department) as Chairperson, the Chief Technical Officer in the Ministry/Department, a Head of Division in the Ministry/Department, and an Accounting Officer from another Ministry/Department. If the project was located in a Region, the Accounting Officer was the REO. In the case of the Regional Tender Board, the composition was as follows: the REO as the Chairperson; the Senior Engineer or the most senior person with engineering skills; a representative of the Regional Democratic Council; a representative nominated by the Minister responsible for Regional Development; and the Officer-in-charge of the Sub-Treasury in the Accountant General’s Department in the Region.
It should not be over-emphasized that when Guyana attained Independence in 1966, the British left a politically neutral Public Service staffed with highly trained, and professionally qualified and experienced personnel. Although members of the CTB and the other tender boards were public servants, the approval of the award of contracts was highly respected, as there was no political interference in the work of these boards. Regrettably, since 1968 the Public Service has become highly politicised, with many senior public servants, including Permanent Secretaries and REOs, appointed on the basis of political considerations. The Hoyte Administration tried to retrieve the situation and to bring back the Public Service to one of respectability by employing officers on the basis of professional and technical competence, free of political involvement or association. However, its efforts were short-lived, following the change in Administration in 1992. And under the Granger Adminis-tration, a Commission of Inquiry into the Public Service was set up but the various recommendations contained in the report aimed at having in place a professionally neutral and competent Public Service serving the government of the day remain largely ignored.
The Procurement Act 2003
In the 2000 and earlier reports of the Auditor General, several deficiencies and discrepancies were highlighted in the application of the Regulations, especially at the Guyana Defence Force and the Supreme Court where there were numerous instances of the absence of a system of competitive bidding and contract-splitting to avoid adjudication by the Departmental and Central Tender boards. At the Ministry of Agriculture, the basis of the award of several contracts adjudicated by the CTB could not be determined because of the unavailability of the related files. The Auditor General recommended a complete re-organisation of the operations of the CTB. He suggested that the composition of the CTB should include persons from outside the Public Service e.g., the professional engineering bodies, trade unions, the Consumers’ Association and the University of Guyana.
In 1996, a consultant was recruited under a USAID-assisted programme to review the functioning of Guyana’s public procurement systems, identify shortcoming and make recommendations for improvement in the form of draft legislation. The specific Terms of Reference required the consultant ‘to review the procedures and practices, administration, and legal and regulatory framework of the Guyana tender-board system and to provide recommendations for changes to both procedures and organizational structures of the tender-board system and to draft amendments to the existing laws of the tender-board system’. However, it was not until 2003 that the Authorities acted on the consultant’s report through the passing of the Procurement Act.
National Procurement and Tender Administration Board
Section 16 of the Procurement Act provides for the establishment of the NPTAB with reporting relationship to the Minister of Finance. It consists of seven members appointed by the Minister as follows: not more than five from the Public Service; and not more than three from the private sector after consultation with their respective organizations. These members are selected ‘from among persons of unquestioned integrity who have shown capacity in business, the professions, law, audit, finance and administration’.
Two members serve on a full-time basis, of which one is the Chairperson appointed by the Minister. The remaining members serve on a part-time basis. The tenure of office is for two years. However, the Act is silent as to whether members can be re-appointed. This is a significant shortcoming, considering the sensitive nature of the position and the need to avoid conflicts of interest, cozy relationships with suppliers and contractors, and other undesirable practices. Since September 2020, the present members of the Board have been in place, with the Chairperson also holding a senior position at the Ministry of Finance responsible for monitoring the execution of contracts for infrastructure development works.
By Section 17 (4), for each procurement subject to its jurisdiction, the NPTAB selects and appoints from the pool of evaluators three individuals with appropriate expertise and experience to serve as members of an Evaluation Committee for such procurement. It is the NPTAB that determines the names of the officials that comprise the pool of evaluators.
Regional, Ministerial/Departmental and District Tender Boards
Regional Tender Boards consist of five members: three appointed by the NPTAB while the remaining two, by the Regional Administration, with qualifications not dissimilar to those required for appointments to the NPTAB. The Chairperson is selected from the three appointed by the NPTAB and is a full-time appointment. The other members serve on a part-time basis. Similarly, Ministerial/ Departmental Tender Boards consist of five part-time members: three appointed by the Minister; and two by the NPTAB, also with qualifications not dissimilar to those required for appointments to the NPTAB. There are also the District Tender Boards responsible for approving the award of contracts at the NDC level, comprising three part-time members: two appointed by the relevant Regional Tender Board; and one from the NDC.
Conclusion
When the Procurement Act was promulgated, the assumption was that a politically neutral Public Service existed at the time and would continue to exist. In the circumstances, it was appropriate for public servants to be involved in a very significant way in the adjudication of the award of contracts, with some input from the private sector in the case of the NPTAB.
As indicated above, since 1968 the Public Service is no longer viewed as politically independent. As a result, the tendency is for members of the various tender boards to be appointed based on political considerations, and for the award of contracts to be skewed in favour of those suppliers and suppliers who are supportive and/or closely associated with the ruling party. These and other undesirable practices in turn lead to significant breaches in the Procurement Act, defective work performed, cost and time overruns, overpayments to suppliers and contractors, the absence of good value for money, and indeed corruption and mismanagement of public resources. In all of this, it is the taxpayer that has to foot the bill.
The solution to the problems associated with public procurement is to revisit the provisions of the Procurement Act and to plug all the loopholes that have resulted in significant deficiencies and discrepancies, and other undesirable practices over the last two decades. The Auditor General’s reports for these years could be a convenient starting point.
In the final analysis, public servants’ involvement in the procurement process cannot be dispensed with, and therefore there is an urgent need to reform the Public Service to ensure that it is viewed as politically neutral, free of political interference and influence. In this regard, the findings and recommendations contained in the Report of Commission of Inquiry into the Public Service should be fully implemented without any further delay.