It is good that the President, albeit belatedly, decided to refer to the disclosure by ExxonMobil that it has recovered some US$55 billion investment in the Stabroek Block and that Guyana’s share of oil production will increase from 12.5 barrels of oil per 100 barrels to some 40 barrels. It is, however, disappointing that the Vice-President responsible for oil and gas and the Minister of Natural Resources chose to remain quiet following this important disclosure. Were they not informed of this development, and did they not scrutinise the monthly cost statements from the U.S oil giant which would have provided some insight into the matter? And what of the auditors who are appointed to review Exxon’s recoverable costs and report accordingly? With the Authorities’ extremely cozy relations with Exxon, one gets the distinct impression that the audit of the recoverable costs has become a superficial and cosmetic exercise. How else does one explain the appointment of the consortium of local auditors that lacked the technical and professional competence in relation to oil and gas matters? And why is it that after five years, the US$214 million in disputed costs flagged by the first auditors IHS Markit is yet to be resolved?
The President’s statement shows that he can listen to the voices of civil society organisations and other stakeholders if he chooses to do so. He must, however, be more receptive to the views of all stakeholders and display a willingness to engage in consultations with them before decisions of matters of national importance are made.This is the essence of democracy. Unfortunately, in Guyana, democracy appears to be practised only one day in every five years. Democracy extends beyond the holding free and fair elections and must be practised every day during a government’s term in office as the elected representatives of the people, consistent with the provisions of the Constitution.
In recent days, the effective functioning of our public procurement system has been called into question in the midst of several disclosures in relation to the improper award of contracts for infrastructure development works, inflated contract prices, undue delays in the execution of the works, substandard work being performed, overpayment to contractors, and other significant breaches in the Procurement Act. In today’s article, we trace the development of our public procurement system and seek to answer the question many stakeholders are now asking: Is our public procurement broken, and if so, what is it that that we need to do to make it right?
Public procurement prior to 2001
With the restoration of public accountability in 1992, as the then Auditor General, I had raised serious concerns about the functioning of the Central Tender Board (CTB), the predecessor of the National Procurement and tender Administration Board (NPTAB) and the main body responsible for adjudicating on the award of major government contracts. In my 1995 report, I stated:
An evaluation of the operations of the Central Tender Board revealed that it was not functioning in a manner so as to facilitate an independent review. The record keeping and filing were completely neglected and, in particular, the minutes of the various meetings held to adjudicate on the award of major contracts were not available. It is indeed inconceivable to have a situation where Cabinet would have made major decisions relative to the award of contracts, and documentation of the logical sequence of events leading up to the awards could not be produced.
Significant breaches in the financial, stores and tender board regulations were observed at several Ministries, Departments and Regions, the most notable being the Guyana Defence Force, the Ministry of Health, Region 3, Region 5 and Region 9. As a result of these breaches, it could not be satisfactorily determined whether full value was obtained for the goods purchased or services rendered.
Similar comments were made in my subsequent reports. Considering the above as well as other irregularities uncovered in public procurement, I had recommended a complete re-organisation of the operations of the CTB, the most significant recommendation being a change in its composition to reflect membership from outside the Public Service e.g., the professional engineering bodies, trade unions, the Consumers’ Association and the University of Guyana. At that time, public procurement was governed by the Tender Board Regulations. My view was that such an important activity consuming a significant portion of the National Budget should be governed by a specific legislation.
As a consequence of the above, draft legislation was prepared in 1996 but it took six years before the passing of Procurement Act No. 6 of 2002 in the National Assembly. Even then, the Act was not made operational via the issuance of an Order from the Minister of Finance. In June 2003, that legislation was repealed and replaced by the Procurement Act 2003 which came into effect on 1 January 2004. Prior to then, the constitutional amendments of 2001 included provisions for the establishment of the Public Procurement Commission (PPC), as discussed below.
In my 2003 report, the last before demitting office, I again referred to significant breaches in the Tender Board Regulations, especially at the GDF and the Police. These include the absence of a system of competitive bidding and numerous instances of contract splitting to avoid adjudication by the CTB. This practice resulted in irregularities in excess of $50 million in the purchase of police uniforms.
Establishment of the Public Procurement Commission
Amid widespread concerns about the basis of the award of contracts for the procurement of goods and services and the execution of works as well as the extent of leakages in the Government’s procurement systems, the Constitution was amended in 2001 to provide for the establishment of the PPC 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 in accordance with law and policy guidelines as determined by the Assembly.
The Commission is to comprise of five members appointed by the President after their nomination by the Public Accounts Committee (PAC) and the approval of at least two-thirds of the elected Members of the Assembly. It must function independently and impartially and discharge its responsibilities fairly. The members are required to have expertise and experience in procurement, legal, financial, and administrative matters to enable them to discharge their responsibilities effectively. It is of particular importance that the Commission is viewed as independent of the political process. In principle, no one should be appointed a member if he/she is a member of a political party or is closely associated with that party, and it is the duty of the PAC to ensure that these requirements are scrupulously followed. Members of the Commission are to serve for a period of three years and can be appointed for another term not earlier than three years after the end their first term.
15 years’ delay in the activation of Public Procurement Commission
Regrettably, it took 15 years for the actual Commission to be activated through the appointment of the first commissioners in October 2016. The main reason for the failure to adhere to this important constitutional requirement for so long was the reluctance of the Cabinet to surrender its role in offering “no objection” to the award of contracts in excess of G$15 million, a practice that still continues to date.
In accordance with Section 54(1) of the Procurement Act, the Cabinet and the PPC are to review annually the above threshold with a view to increasing it over time and progressively phasing out the Cabinet’s involvement in favour of a decentralized process. By Section 54(6), the Cabinet’s involvement is to cease upon the constitution of the PPC, except for pending matters.
Appointment of the first members
At the time the first members were appointed, the Chairman of the PAC was President Irfaan Ali. Instead of following a rigorous process involving public advertisement, shortlisting of eligible candidates, interviewing, and selecting the best candidates for consideration by the Assembly, and in order to obtain easy passage through the Assembly, the PAC took the least line of resistance by requesting the two major political parties to nominate their candidates – two by the People’s Progressive Parties/Civic, and three by the APNU+AFC – although one media outlet suggested that the selection was made from a list of 12 persons.
The persons selected were Emily Dodson, Carol Corbin, Sukrishnalal Pasha, Ivor English and Nanda Gopaul. The names of the other seven persons were never disclosed, and it is unclear on what basis the PAC considered the 12 names. That apart, the qualification requirements set out in the Constitution were not adhered to in the selection of the members in that none of the persons selected fully met these requirements. The Constitution makes it clear that it is not an “either or” situation in that the persons selected must have expertise and experience in all the disciplines, namely, procurement, legal, financial and administrative.
Appointment of the second members of the Commission
The above practice was repeated in the appointment of the second commission in July 2022 with the following members: Pauline Chase, Joel Bhagwandin, Rajnarine Singh, Berkley Wickham and Dianna Rajcumar. The delay in the appointment was due to a combination of the political impasse following the vote of no confidence in the government as well as the failure of the new Administration to address the issue for almost two years.
Is it any wonder that there is widespread dissatisfaction in the functioning of the PPC, especially when one considers the remuneration packages of the members? One could also ask whether all members were functioning on full-time basis. The constitutional amendment did not envisage a full-time role for all the five members, though it may be desirable at this point in time.
Current situation
The tenure of office of the second commission ended in July 2025. Since then, there has been no further appointment since the new PAC is yet to get its act together. One hopes that this new parliamentary oversight body will follow the established practices in selecting candidates for consideration by the Assembly. The Assembly also has a role to play in ensure that best candidates are selected, free of political considerations, and in keeping with the spirit of the constitutional amendment of 2001.
To be continued
Discussion