Jul 20, 2016 News
By Kiana Wilburg
Along with its other plans in the pipeline, it appears that the Ministry of Finance is gearing to open Guyana’s public procurement market to the international community.
This was announced yesterday by Junior Finance Minister, Jaipaul Sharma, during a procurement workshop that was held at Herdmanston Lodge.
During his opening remarks, Sharma alluded to the fact that opening up the local market to international competitors would ultimately force local companies to up their game when executing contracts or projects they have been awarded.
Sharma made it clear that he is very concerned about improving the procurement process in Guyana, as it is an area that remains a stimulus to the economy. He emphasized, too, that it is also an area that has a substantial effect on world trade.
The Junior Finance Minister said that in Guyana, public procurement has been estimated to account for 27 percent of Gross Domestic Product (GDP) based on the 2015 budget.
Sharma added, “Opening our public procurement markets to international competition can be beneficial for several reasons. It is very important and we want to do it because it would enhance government’s ability to obtain better value for money and increase efficient use of public resources. It will also be a powerful tool to fighting corrupt practices and increase transparency and legal certainty.”
With this in mind, the Junior Finance Minister said that businesses in Guyana must be prepared to be competitive.
Sharma also updated his attentive audience on some of the measures government has taken to help improve the procurement process. He said that while the administration is aggressively focusing on the establishment of the Public Procurement Commission, steps have been taken to increase the “limits” of various boards, starting with the ministerial boards and regional tender boards.
In this regard, Sharma explained that Government took this approach in order to give the various board levels the power to process contracts which are of a large sum.
“So they don’t have to send it to the national board for consideration. At their level, they could facilitate that process,” he added.
The Junior Finance Minister also revealed that Cabinet has considered a proposal to increase the number of evaluators that are available to government. By doing this, he believes that it is going to improve the level of transparency and accountability of the procurement process.
He noted, too, that Government also implemented the Bid Protest Committee which allows aggrieved contractors to lodge their complaints within a stipulated time frame. That system has already attracted one case.
In addition to this, Finance Minister Winston Jordan had recently announced, too, that the area of public procurement is expected to face greater scrutiny.
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.
Jordan 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 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.
Furthermore, Jordan promised that the 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 National Procurement and Tender Administration Board (NPTAB) will establish complaints mechanisms and debarment procedures that take account of international best practices. The deadline for this is also December 2017.
The award of contracts in Guyana by the 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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