-needs urgent changes
With billions of dollars in government contracts being awarded each year, former Auditor General Anand Goolsarran says that the public procurement system is broken and requires urgent changes.
In his accountability column in today’s Kiskadee Watch, Goolsarran said that while the constitutional amendments of 2001 provide for a public procurement oversight mechanism to ensure that the purchasing of goods and services and the execution of works are conducted in a fair, equitable, transparent, competitive and cost-effective manner, this mechanism was circumvented for more than 16 out of 25 years through the non-activation of the Public Procurement Commission (PPC).
Furthermore, during its period of activation, the way members were selected provided no comfort that the interest of the public was being protected. In all of this, he charged that a significant gap in procurement oversight remains.
“Several deficiencies can be identified in relation to the Procurement Act, including the composition of members of the NPTAB (National Procurement and Tender Administration Board), the Minister of Finance’s involvement in the selection and appointment of its members as well as the Chairperson, and the selection of the pool of evaluators. Additionally, there were several instances of non-adherence to the requirements of the Act, the most significant being the failure of the Cabinet to surrender its role in the procurement process”, he stated.
Goolsarran said: “Yes, our public procurement system is broken and needs to be fixed so that the public can have confidence that an effective mechanism is in place to ensure that the best value for money is achieved for the acquisition of goods and services, and the execution of works. An independent and effective PPC, free of political interference, is indispensable to ensure that this is so. A comprehensive review of the Procurement Act to identify weaknesses and to strengthen its provisions will be a welcome initiative”.
He said that a country can have the best of laws, rules and regulations but if persons appointed to administer them are politically tainted and/or susceptible to political influence, this will have a negative influence.
“Unfortunately, there is strong evidence of this being the case in several areas of the operations of the Government”, he stated.
Noting that two key qualifications for suppliers and contractors bidding for government contracts are: (i) they must have technical competence or access to such competence, financial resources, equipment and other physical facilities, managerial capability, reliability, experience and reputation, and personnel to perform the contract; and (ii) a track record of satisfactory past performance in relation to the supply of similar goods/services or the execution of works, Goolsarran said that over the years, there was evidence that contracts were awarded to suppliers and contractors who did not meet the qualifications requirements, especially as regards relevant experience for the works to be undertaken.
“This had resulted in significant delays, cost overruns, defective works performed, and overpayments, among others. In some cases, contracts were terminated, and the related works re-advertised at significant additional cost to the State”, he stated.
One project that relates to several of these points is the incompletion of the Port Kaituma wharf after several years. The project has been severely delayed as fissures opened up in the wharf at a key stage of construction. The contractor later blamed the designer and remedial works had to be done, Several years later the problems are still to be cured and this necessitated the continued service of MV Barima to Port Kaituma instead of a newer vessel being used. The MV Barima sank on July 18 on the way to Port Kaituma with the loss of around 100 lives.
While Section 14 of the Procurement Act prohibits contract-splitting to avoid adjudication by higher authority levels and/or circumvention of the application of open tendering, Goolsarran said that over the years, this has been a source of concern, especially at the Guyana Defence Force, the Police and the Supreme Court of Judicature.
Focusing on the NPTAB, Goolsarran said that Section 16 of the Act provides for the establishment of the NPTAB with a reporting relationship to the Minister of Finance. It is to comprise seven members appointed by the Minister from among persons of ‘unquestioned integrity who have capacity in business, law, audit, finance and administration’: not more than five from the Public Service, and not more than three from the private sector after consultation with their representative organisations. Two members are to serve on a full-time basis, with the Minister appointing the Chairperson from one of the full-time members. Their tenure of office is restricted to two years, and there is no provision for the renewal of appointment. This, Goolsarran said, is unlike the case of the PPC where 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.
“The current members of the NPTAB have been in place since 2020 when there was a change in Administration. However, there is no publicly available evidence to suggest that they were re-appointed at the end of their term of office in 2022 and 2024, in which case this would have been contrary to the requirements of the Act. Unless there is a justifiable explanation, these persons’ continuation in office beyond 2022 would appear to lack legal support”, Goolsarran argued.
He added that the Chairperson of the NPTAB also holds a senior position at the Ministry of Finance responsible for monitoring the Government’s infrastructure development works.
“He therefore holds two full-time positions. When he was appointed in 2020, the Minister of Public Works, who presented the 2020 Estimates of Revenue and Expenditure, had stated that the appointment was a temporary one. That apart, concerns have been expressed about a potential conflict of interest since the Chairperson is in a unique position to influence the award of contract to persons/entities who/that can expedite the execution of the works without due regard to factors such as qualifications, experience and proven track record, among others, especially since he has a casting vote”, Goolsarran cautioned.
He therefore said that the selection of members of the NPTAB, their appointment and the Chairperson’s reporting relationship provide little comfort that this key body charged with the responsibility of approving the award of major contracts can act independently and without interference and/or influence from the Government.
Pointing out that the Act also provides for the assessment of bids to be undertaken by three-person Evaluation Committees appointed by the NPTAB to determine which bidders have submitted the lowest evaluated bids, Goolsarran said that it would be desirable for another independent body, such as the PPC or the Public Accounts Committee, to be responsible for appointing Evaluators, and their names and professional backgrounds made public.
He also voiced concern over Cabinet’s ongoing role in the procurement process.
In accordance with Section 54, Cabinet has the right to review all procurements in excess of $15 million using a streamlined evaluation report submitted by the procuring entity. It may object to the award of a contract only if the procuring entity failed to comply with the applicable procurement procedures. Further, the Cabinet and the PPC were 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 decentralized process.
Goolsarran said that Cabinet’s involvement in the procurement process was to have ended upon the constitution of the PPC, a constitutionally mandated oversight body.
“However, it took 15 years for the Commission to be activated through the appointment of its members. This was due mainly to the reluctance of Cabinet to surrender its role in the procurement process, a practice that still continues to date. At the moment, there are no Commissioners since the tenure of office of the previous Commission ended more than a year ago”, he lamented.
Discussion