Public tendering is mandatory

May 05, 2019 Features / Columnists, Peeping Tom

---

The revelation that the Ministry of Education does not have any arrangement for procuring exercise and text books from Trinidad and Tobago has not allayed the concerns about the sidestepping of local printers in the production of school books. If anything, the disclosure is even more troubling, because it suggests that the government has reverted to an old and discredited system which was used during the Burnham era.
In a statement, the Ministry of Education has advised that the printing of exercise books and textbooks, produced locally, is contracted to Guyana National Printers Limited, which is a state-owned entity, located at 1 Public Road, La Penitence, Georgetown. The Ministry said that it has no arrangement for printing of local text and exercise books with any other company.
Guyanese old enough will recall that during the days of state-domination of the economy – when there were more than two dozen state corporations – government procurement had to be done through other state agencies.
In other words, the government procurement was not liberalized. It was only if an item was not available from Guyana Stores, the main government supplier, that a government entity could source supplies from the private sector.
The system did not work. It subsidized inefficiency and removed competition from the supply of goods to government. As such, the government ended paying more than it should have been paying. And despite this system of supporting the state-sector, government corporations still ended up with a poor financial record.
Governments should seek value for money. And the best way for this to be achieved is to ensure that government procurement systems are open, transparent and non-discriminatory. Rather than suppressing competition, liberalization aims at maximizing the benefits of public procurement. It is for this reason that during the transition to a market economy and in order to be compliant with international trade rules, government procurement was liberalized.
Guyana’s procurement laws do not permit the government to hand out contracts to government corporations without a competitive process. Except where otherwise provided for under the Procurement Act, public tendering for goods and services, by government, is mandatory. The exceptions are those which relate to single–sourcing and restrictive tendering or for procurement related to national security.
None of these exceptions apply in the case of procurement of exercise and text books. The government therefore is in flagrant breach of the Public Procurement Act by its single-sourcing the supply of exercise and text books, exclusively to the Guyana National Printers Limited.
In the case of public corporations, such as Guyana National Printers Limited (GNPL), they have the right to set their own rules and regulations for tendering, but these must be compliant with the Procurement Act. In other words, GNPL also has to go out to competitive bidding in order to award a contract.
The decision of the government therefore to revert to the old discredited system under Burnham and in so doing, to hand work to GNPL, without public tendering, is therefore in breach of the Procurement Act. It also does not guarantee that the government is receiving value for money.
The decision amounts to an indirect subsidy, because the government is keeping the GNPL afloat with government work, without ensuring that government is getting the best price for the goods and services which it is procuring from GNPL.
The government is stuck in the past. It has to realize that it is operating in a different era, under a completely different economic system. You cannot want to have an open economy and yet operate under the same old, discredited socialist systems which crowd out the private sector and result in inefficiencies and high costs.
This is a matter which also places Guyana in violation of its international trade obligations, because it is also shutting out regional and international competition, something which is not permitted under international trade rules.
The government has to liberalize the production of exercise and text books. It has to open the market to competition so that it will receive the best value for money. It is unacceptable for Guyana National Printers Limited to have a monopoly on the supply of exercise books and locally-produced text books to the government, when the same GNPL is believed to be outsourcing this work to producers outside of Guyana to the detriment of local printers who feel they should be given a chance to supply the books cheaper.
We should not be going back to those archaic and backward systems where government procures from government without competition. However sentimental one may feel about what took place in the past, a country has to move forward, not retreat to the past.

---

---