IDB urges Govt to do more competitive bidding, less single sourcing

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A key Inter-American Development report (IDB) has recommended that countries in the region, including Guyana, implement a number of measures aimed at improving public procurement.

The report, titled ‘Better spending for better lives: How Latin America and the Caribbean can do more with less’, has identified poor procurement practices as a contributor to wasted public funds.

Among its recommendations for countries in the region are for governments to avoid single sourced contracts and concentrate on competitive bidding. In fact, it was advised that open tendering be the default method of procurement.

“Use competitive and efficient tendering and limit the use of exceptions and single source procurement,” the report states. “Use open tendering as the default method and modern tools (such as) framework agreements, electronic catalogues and reverse auctions for standardised products.”

In addition, the report advises that governments in the region publish annual procurement plans, as part of a comprehensive framework that would set out the Government’s goals and priority areas.

“Publishing annual procurement plans increases accountability of contracting authorities, as they need to justify diverging from the plan,” the report points out, attributing this piece of advice to the European Commission.

The report also advises that all stages of public procurement, including all Government personnel involved in the process, be brought under a centralised procurement agency. And while Guyana does have a National Procurement and Tender Administration Board (NPTAB), the report also advises that this agency oversee and promote training of personnel.

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Single sourcing

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Over the past few years, Guyana has been plagued with instances of single sourced contracts. One instance in particular is a contract for which Public Infrastructure Minister David Patterson sought permission from Cabinet to single source. That transaction is now engaging the attention of the Special Organised Crime Unit (SOCU).

The contract in question was awarded to Dutch company, LievenseCSO, for a feasibility study into the new Demerara Rver bridge. The parliamentary Opposition had requested that the Public Procurement Commission investigate the award of the $148 million sole sourced contract.

In its report on the matter, the Commission flagged Minister Patterson for requesting from Cabinet that the contract be sole sourced… instead of being processed through the Procurement Board, as stipulated by law.

Then there is the sole sourced Sussex Street bond. Earlier this year, questions on notice from the parliamentary Opposition in the National Assembly revealed that the State has paid out over $264 million in rental fees for the Sussex Street drug bond. In the response tabled by Public Health Minister Volda Lawrence, it was stated that this sum was paid from July 2016 to March 2018 to Linden Holdings Incorporated.

When it comes to action being taken to end the arrangement, Lawrence revealed that a Notice of Quit dated October 31, 2016, was sent by the then Permanent Secretary of the Public Health Ministry, Trevor Thomas. Further, current Permanent Secretary Colette Adams had sent a reminder dated October 3, 2017.

The transaction first came to light in 2016 during consideration of Financial Papers, when it was discovered that Government had in fact entered a contract to pay a VAT-excluded $12.5 million monthly rental to Linden Holdings Inc for the storage of drugs and medical supplies.

It was also discovered that $25 million was already spent as a security deposit, in addition to $12.5 million, representing monthly rentals from August to December 2016. Government has since announced that the rental arrangement has ended.

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