Former Minister of Finance raises public procurement concerns

Nov 26, 2021 Letters

Dear Editor,

Kaieteur News – I refer to article, “”Absolute nonsense” President Ali tells ‘greedy’ Govt. contractors,” which was published in Kaieteur News (KN, Wednesday, November 24, 2021). It was reported that during a meeting with contractors – who are currently executing works of $100 million and above – at the Arthur Chung Convention Centre (ACCC), the President allegedly scolded contractors who “had already secured large scale contracts [but] are also pursuing smaller contracts, such as those valued between $1M and $5M.” He, therefore, appealed to them to not bid for smaller procurement contracts, citing, among other reasons, negative consequences such as inefficiency and the sidelining of the small contractors.
It seems that the government’s preferred approach to dealing with the private sector is to use moral suasion. While this soft option of engagement has its advantages, the question is: how should the government react when moral suasion fails?
Happily, in this instance, the government has existing legislation in its armoury that just needs to be activated and enforced. It will be recalled that, in 2019, the Coalition government amended the Procurement Act to provide for the registration of contractors. Once done, contractors can be categorised according to a set of criteria, including financial capacity, track record and technical capacity. The amendment also linked the Procurement Act with the Small Business Act, thus allowing small businesses easier and smoother access to public procurement.
A key outcome from the amendment is that the government can set aside procurement contracts exclusively for small businesses, which are defined in the Small Business Act. Again, small businesses will be required to register with the Small Business Bureau. The amendment also requires that all budget agencies submit their procurement plans, in keeping with their approved budgets. These plans should be in the public domain.
While on the subject of public procurement, I recall a long standard practice, during the Coalition government, was the requirement that all budget agencies clear their tender documents (with values above their Ministerial, Regional or Agency tender board thresholds) with the National Procurement and Tender Administration Board (NPTAB) before they were released to the public for tendering. This practice by NPTAB allowed for checks and balances by ensuring, for example, that there was consistency in the documents and that the evaluation criteria were suitable for the type of procurement (works, goods and services). Budget agencies were required to make the necessary corrections before the bid documents were approved. With NPTAB imprimatur of the bidding documents, bidders were assured both of the authenticity of the document and the process.
However, this proven procedure is no more. In a letter dated September 24, 2020, which was addressed to the Heads of Budget Agencies (HoBAs), Tarchand Balgobin, in his capacity as Director, Project Cycle Management Division, Ministry of Finance disclosed, “The NPTAB has advised that the process of clearing tender documents prior to the launch of tender has been removed.” It is instructive to note that Tarachand Balgobin is also the Chairman, NPTAB.
While Balgobin’s disclosure appears innocuous, it has serious implications; it has, with the stroke of a pen, removed a critical check and balance from the NPTAB and deposited it in the Budget Agency. Each HoBA can now, for example, develop their own set of evaluation criteria for projects under their control, thereby creating confusion and laying the basis for corruption. This approach is anathema to the noble ideals of public procurement enshrined in the Procurement Act 2003, which are to foster and encourage participation; promote competition; provide fair and equitable treatment; promote integrity, fairness and public confidence; achieve transparency; and maximise economy and efficiency. With the removal of experienced staff from NPTAB and the continued procrastination in the reconstitution of the Public Procurement Commission (PPC), concerns mount about the state of public procurement in Guyana.

Yours faithfully,
Winston Jordan
Former Minister of Finance

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