By Kiana Wilburg
ExxonMobil is expected to provide the Government with annual reports on the number of local goods and services it is using for its offshore projects.
But how does one know if the procurement strategy and rules being employed by the USA firm allow for the maximum use of local content?
Head of the National Procurement and Tender Administration Board (NPATB), Berkley Wickham, says he would support the full disclosure of ExxonMobil’s rules and strategy which govern its procurement of goods and services.
Speaking with Kaieteur News recently, Wickham said, “If you have to report to the government on local content then it would be important to see if the rules you are using allow for the maximum use of locals.
“In addition, we would have to put the necessary mechanisms to ensure that this happens too. This can’t be left hanging. There also needs to be a policy directive (on the procurement of goods and services by oil operators).”
“We also need a mechanism to measure number of small businesses, for example, which are benefitting. And a mechanism to see in Year One versus Year Two, what percentage of local content was used; if there was a decline or increase between the two years and reasons for those.
“A measuring mechanism needs to be in place. So I do support the call for the procurement strategy of the oil firms to be made public not just for scrutiny but for national discourse.”
The NPTAB Head added, “This has to be something for national discussion. Guyana needs to be able to be part of developing the strategy and say well ‘We want to attain a certain level by year X and therefore, we will measure it year by year.
“And to achieve this, we can amend this part and that part of the oil company’s procurement rules so more locals are involved.”
Wickham said he is a firm believer that there needs to be transparency on this matter but at the same time, local companies have to gear themselves up to deal with the demands of the new industry.
He stressed that there are new standards and levels which they must strive to meet.
IMPROVING THE PROCUREMENT ACT
Wickham had also told Kaieteur News that he believes the Procurement Act needs to be improved in an effort to ensure locals benefit the most from contracts in the oil sector.
In this regard, he said that Guyana’s procurement laws contain a provision called a margin of tenderer reference.
The law states, “The procuring entity may grant a margin of tenderer reference not exceeding 10 percent to tenders submitted by domestic contractors or for the benefit of tenders for domestically produced goods, provided that such preference is specified in the tender documents.”
“If the lowest evaluated tender was submitted by a foreign tenderer, the evaluating committee will apply the margin of preference to the prices submitted by all foreign tenderers, for evaluation purpose.
“If, after applying the margin of preference, the lowest evaluated tender was submitted by a domestic tenderer, such tenderer shall be awarded the contract.”
But considering the massive scale of Guyana’s oil wealth to come, Wickham, says that perhaps it is time for amendments to be made to this provision, among others, since they date back to 2003.
Wickham said, “There needs to be a national discussion on whether the 10 percent is good enough. We are in the process of modernizing the current Procurement Act. We had a consultancy to do that and we have reviewed the recommendations together with the Public Procurement Commission and those revisions are now with the Attorney General’s Chambers for drafting.”
The Tender Board Head added, “And I would think thereafter, there will be a public process for stakeholder engagements to look at what was recommended for amendment. So there will be ample opportunity at that stage for the people to have a say on what they think should be included to promote more local participation for the oil sector.”
Wickham had also emphasized that amendments to the Act are crucial to ensuring local businesses benefit the most from the sector.
He said, “This is very important. If we are talking development and the good life, then this is a necessary step. I would think, and I am not a politician, but it is only fair for the people of Guyana to benefit as much as possible from the gains of the oil and gas sector.
“So this is a crucial step to propelling local businesses, and particularly women-owned businesses.”
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