THE PAC SHOULD DETERMINE WHETHER THERE IS BIAS IN PREQUALIFICATION RULES

Jan 03, 2014 Features / Columnists, Peeping Tom

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The opposition’s resistance to government’s no-objection to the award of contracts has backfired. So preoccupied were the opposition parties with trying to remove this no-objection that they missed, entirely, the fact that removing the right to no-objection does not remove control of public procurement from the hands of government.
Instead of wasting time with trying to avoid the government have a no-objection, the opposition parties should have granted to the government the prerogative to exercise the no-objection, if only for the sake of bringing into being the Public Procurement Commission (PPC), whose appointment they wish to see and whose oversight is necessary to monitor the systems and procedures to ensure that the system is fair, transparent and competitive.
However, in exercising its constitutional mandate, the Public Procurement Commission cannot develop its own rules of procurement. Its mandate to make regulations must not be confused with setting the rules of procurement.
The Public Procurement Commission monitors and reviews systems to ensure that things are in accordance with the law. Also, unlike the impression that has been created by the opposition parties, the Public Procurement Commission does not award contracts or hear appeals relating to the award of contracts. They may entertain complaints and make recommendations based on their findings, but they cannot overturn any award.  The role of the PPC is oversight in nature.
This oversight does not, however, necessarily guarantee that the systems in place are fair to all concerned or that they promote competition for the tendering of goods and services. This is where the Public Accounts Committee (PAC) comes in. This committee can force a reform of biased systems and procedures by summoning hearings into how public monies are spent. Indirectly, they can use this prerogative to assess whether, for example, a system of prequalification is biased towards any contractor.
The opposition parties which chair the Public Accounts Committee must now investigate whether the system of prequalification of contractors for the supply of goods and services is not rigged in favour of any company in relation to contracts in the health sector.
For many years, one company has hogged the bulk of the value of contracts in the health sector. In early years this was achieved without competition through a waiver of tender board procedures and through selective tendering. Those who felt discriminated against had little recourse, because there was no procurement tribunal in place. There is still none in place, even though the Constitution makes provision for the creation of such a tribunal.
In the face of mounting criticism about how the bulk of the value contracts in the health system were awarded, the government moved to prequalification. The same company which for years had enjoyed selective tendering and waiver of tender board procedures was prequalified, thus perpetuating the situation in which it hogged the bulk of public expenditure for medicines in the local health sector.
The time for prequalification has once again arrived and without any instructions from the Public Accounts Committee to reform the rules of prequalification, there has emerged criticisms that the prequalification criteria is biased in favour of the same firm which for years has hogged the contracts in the public health system.
This situation is one that requires urgent action. It is for the Public Accounts Committee to summon hearings on the system of prequalification and to urge that a fair system be implemented.
The system of prequalification was never intended to suppress competition in the award of contracts. But this is exactly what obtains now, because one firm enjoys a virtual monopoly on the supply of medicines in the health sector.
Apart from the issue of whether this firm benefits from rules that are tilted in its favour, it must be a source of deep concern for one company to control eighty per cent of the market for the supply of medicines in the health sector.
What happens if that company should follow the example of CLICO and be forced into bankruptcy? This will result in severe problems in the health sector.
The fact also that one company holds such an overwhelming share of the drugs supplied in the health sector shows that prequalification is not promoting competition. This goes against the very grain of what the Public Procurement Act was intended to achieve.
It is time for the Public Accounts Committee to summon an emergency meeting and to examine whether the points systems for the prequalification of companies to tender for contracts in the health system is biased in favour of any company.
This may not change anything, but at least the PAC would have pronounced on this issue and issued its instructions. If the PAC’s instructions are disregarded, then the opposition parties, which hold the majority in the National Assembly, can refuse to approve spending for contracts in the health sector when the National Budget is presented, unless any biased rules are amended.

 

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