Public Procurement…Contract awards must have greater transparency – Finance Minister

Jul 17, 2016 News

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The area of public procurement is expected to face greater scrutiny. Finance Minister, Winston Jordan, intends to tighten up on all loopholes in this area.

According to Jordan, he intends to provide a greater degree of assurance about the transparency and fairness needed in the award of contracts. The economist wants to ensure greater confidence from all stakeholders in the system. He insists that this becomes paramount since there is no Public Procurement Commission (PPC) in place.
The economist said that this is also part and parcel of his efforts to bring transparency to the national budgets as more than 70 percent of it deals with public procurement.
The Finance Minister noted that the appointment of the five-member Commission requires the approval of two-thirds of the Members of the National Assembly. He said  that unfortunately, the National Procurement and Tender Administration Board (NPTAB) is not viewed as independent enough to carry out an objective assessment of tenders leading up to the award of contracts.
Jordan recalled that the Government has recently announced the replacement of members of the NPTAB. He said that there will also be compliance with principles laid out in the Inter-American Convention against Corruption and United Nations Convention against Corruption to which Guyana is a signatory.
The Finance Minister said that Government will review and revise where necessary the Procurement Act and its Regulations and present these to the National Assembly by December 2017.
He said, too, that the NPTAB will establish complaints mechanisms and debarment procedures that take account of international best practices. The deadline for this is also December 2017.
In the meantime, Government has approved the implementation of a Bid Protest Committee which will receive complaints of breaches in the state’s tendering process. The body had been one of the requirements laid out in the public procurement regulations.
Cabinet has since received recommendations from Jordan, for the appointment of a Bid Protest Committee. A nominee of the Attorney General’s Chambers is expected to be the Chairperson.
The other members are Archibald Clifton, a former senior manager of Guyana Telephone and Telegraph Company (GTT) and Ewart Adams, an insurance official.
As for the work of the Public Accounts Committee (PAC), there appears to be some amount of movement on the establishment of the Procurement Commission. This is according to PAC Chairman, Irfaan Ali.
Ali said that the committee has received a number of nominations and the applications of those individuals are currently being reviewed by a subcommittee. The two-member sub-committee includes Minister of Social Protection, Volda Lawrence, and the PAC Chairman.
The PAC Chairman was unable to say just how many applications have been received and are being perused. The Public Accounts Committee, which according to procedure, is chaired by a member of the opposition, has to nominate the five members of the Procurement Commission.
The award of contracts in Guyana by the National Procurement and Tender Administration Board (NPTAB) has always been a matter of contention in several quarters. There have been accusations of favouritism along with other complaints of anti-competitive practices.
Former Auditor General Anand Goolsarran, who had spoken extensively on the matter, said that the weak systems of the NPTAB need to be addressed by the new administration, as they cost the country approximately $28B annually.
He then pointed to credible allegations of corrupt behaviour in public procurement. These included sole sourcing of drug contracts, contract splitting, inflated engineer’s estimates, evaluation bias on behalf of favoured contractors, the use of inexperienced contractors, the absence of competitive bidding in some cases and overpayment to contractors.
Goolsarran had said that at least US$140M is lost annually by looking at those areas. His estimation was gleaned from an overview of the Auditor General’s reports on the country’s accounts over the past few years.
He had also highlighted some of the glaring shortcomings of the NPTAB, among them the absence of District Tender Boards for Neighbourhood Democratic Councils; the failure to publish in NPTAB’s website; the award of all contracts between $200,000 and $15 million; the failure of members of the various tender boards to file financial returns with the Integrity Commission; the non-establishment of a formal Bid Protest Committee and the failure to exercise due diligence in ensuring that evaluators had the requisite expertise.
Goolsarran had said, too, that there are certain parts of the Procurement Act which have not been adhered to since the Act came into effect on January 1, 2004.
These include ensuring the criteria used for selection are such that they do not discriminate against particular contractors and suppliers, and the award of contracts based on the lowest evaluated bid as opposed to the lowest bid.
Failure to look at these, he said, has also proven to be very costly to the country.

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