Procurement commission hints Cabinet might continue offering ‘no-objection’ to contracts

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The Public Procurement Commission (PPC), earlier today, issued a very lengthy statement responding to what the body referred to as “a significant misunderstanding of its role and functions”.

In its statement, the PPC hinted that Cabinet might continue giving its ‘no-objection’ to contracts over $15m until revisions are made to the Procurement Act to address this conflicting provision.

“Recent media reports suggesting that the continued role of Cabinet is linked to the PPC being “operational and functional” are inaccurate and misleading as neither the Constitution nor the Procurement Act provides for the PPC to take over this function from the Cabinet”, the statement noted.

The Opposition had brought this issue to the fore on numerous occasions before; that once the PPC was established the role of Cabinet offering its “No Objection” to the awarding of contracts would come to an end.

In response to claims that the body has been non-functional despite its commissioners being paid ‘super salaries’, the PPC said that the body became functional immediately after the appointment of the Commissioners by President David Granger on the 28th October 2016, as required by Article 212X. (2) of the Constitution. It explained that since this is the first such Commission in Guyana, Articles 212Y. (3) and 212Z, of the Constitution required certain preliminary actions to be taken to enable it to effectively carry out its mandate.

President David Granger and members of the Public Procurement Commission

“In pursuance of this mandate, the Commissioners have been meeting almost daily, and in the absence of a fixed Office have had to use various locations including, the Committee Rooms of the National Assembly of the Parliament and, since the 2017 Budget Debate, the Conference Room of the Critchlow Labour College”, the statement noted.

The PPC added that the primary impediments to the full operation of the body are the absence of appropriate office accommodation, adequate budgetary resources, transition of functions from the NPTA and requisite staffing of the Secretariat of the Commission. These issues have affected the accessibility of the PPC to the full range of stakeholders that it is intended to serve and restricted its ability to fully execute its functions in a stable and appropriate environment.

The PPC comprises of Chairperson; Carol Corbin, members; Nanda K Gopaul, Emily Dodson, Sukrishnalall Pasha and Ivor English

Following is the full statement:

Recent reports in the media have contributed to the notion that the Public Procurement Commission (PPC) has not yet commenced its work, resulting in the continuing role of Cabinet in the national procurement system, whereby it issues “No Objection” to the award of contracts.   The PPC, therefore, wishes to dispel this notion and clarify what appears to be a significant misunderstanding of its role and functions.

It should be noted that the PPC became functional immediately after the appointment of the Commissioners by His Excellency, President David Granger on the 28th October 2016, as required by Article 212X. (2) of the Constitution. Since this is the first such Commission in Guyana, Articles 212Y. (3) and 212Z, of the Constitution required certain preliminary actions to be taken to enable it to effectively carry out its mandate. These included, the election of a Chairperson, followed by discussions with the Public Accounts Committee (PAC) on the benefits and conditions of service for the Commissioners, the determination of a staff structure for the establishment of a Secretariat, including the preparation of the terms and conditions of the proposed staff, of which, the three principal officers require the approval of the National Assembly.

In pursuance of this mandate, the Commissioners have been meeting almost daily, and in the absence of a fixed Office have had to use various locations including, the Committee Rooms of the National Assembly of the Parliament and, since the 2017 Budget Debate, the Conference Room of the Critchlow Labour College.

Despite constraints, most of the above matters have been addressed by the Commission including, the finalizing of the structure for the establishment of the Secretariat of the Commission. In this regard, the process of the recruitment of the Chief Executive Officer/Secretary of the Commission and the two most senior officers is well advanced. A report on the selection of the suitable candidates for these posts has been submitted to the National Assembly and the Commission awaits the approval of their terms and conditions by the National Assembly as required by Article 212Z. (2) of the Constitution. The recruitment of other support staff for the Commission as required by Article 212Z. (1) of the Constitution is in progress and work has commenced on the preparation of a strategic plan and operational plan for the Commission and its Secretariat.

Following a detailed review of the applicable legislative framework, the Commission engaged several stakeholders within the national procurement system to sensitize them to the role and functions of the PPC.  In this regard, members of the Commission interfaced and held discussions with more than one hundred public officials from several agencies and departments that function in the public procurement system and deal directly with procurement matters. Some of the agencies engaged thus far include: The Audit Office of Guyana, Public Accounts Committee (PAC), National Procurement and Tender Administration Board (NPTAB), Ministry of Finance, Ministry of Public Infrastructure, Ministry of Education and the Inter-American Development Bank (IDB). Ultimately, in fulfillment of its mandate, the PPC intends to engage all procuring entities across Guyana.

As required by the Constitution of Guyana, the Commission has also received and reviewed complaints from contractors, but this process has been constrained by several issues referenced later in this document.

For clarity, the functions of the Commission, as set out in Article 212AA. (1) a) to m) of the Constitution, as well as, Section 17 (2) of the Procurement Act, Chapter 73:05 are provided below:

  1. a) monitor and review the functioning of all public procurement systems to ensure that they are in accordance with law and such policy guidelines as may be determined by the National Assembly;
  2. b) promote awareness of the rules, procedures and special requirements of the procurement process among suppliers, constructors and public bodies;
  3. c) safeguard the national interest in public procurement matters, having due regard to any international obligations;
  4. d) monitor the performance of procurement bodies with respect to adherence to regulations and efficiency in procuring goods and services and execution of works;
  5. e) approve of procedures for public procurement, disseminate rules and procedures for public procurement and recommend modifications thereto the public procurement entities;
  6. f) monitor and review all legislation, policies and measures for compliance with the objects and matters under its purview and report the need for any legislation to the National Assembly;
  7. g) monitor and review the procurement procedures of the ministerial, regional, and national procurement entities as well as those of project execution units;
  8. h) investigate complaints from suppliers, contractors and public entities and propose remedial action;
  9. i) investigate cases of irregularity and mismanagement, and propose remedial action;
  10. j) initiate investigations to facilitate the effective functioning of public procurement systems;
  11. k) enlist the aid of such persons, as may be necessary, to assist the Commission with expert advice;
  12. l) liaise with and refer matters to the police and the Auditor General; and
  13. m) do all other acts and things as may be necessary to facilitate the efficient discharge of the functions of the Commission.

National Procurement and Tender Administration

It should be noted that Section 17 (2) of the Procurement Act enables the National Procurement and Tender Administration to carry out certain functions of the PPC until its establishment. These functions, which include making regulations governing procurement to carry out the provisions of the Act, are listed in Section (2) (a) to (f) of this Act. However, Section 17 (3) clearly identifies that these functions shall be the responsibility of the PPC, once it is established.  The PPC has already held discussions with the Minister of Finance, as well as, officials within the Ministry of Finance and the National Procurement and Tender Administration with respect to the transition of these functions to the PPC.

One of the functions of the PPC, [Article 212AA. (f)], is to monitor and review all legislation, policies and measures for compliance with the objects and matters under its purview and report the need for any legislation to the National Assembly. In this regard the PPC has spent considerable time reviewing the existing legislation and has already identified the need for revision and / or amendments to the Procurement Act and the Regulations made thereunder to ensure clarity of the provisions, removal of conflicting sections and to ensure compliance with the Constitution. Two areas which require immediate attention are:

  • the role of Cabinet in reviewing all procurements which exceed G$15 million, as provided for in Section 54 (1) to (5) of the Act and constantly referred to as the “No Objection Role of Cabinet”; and
  • the role and functions of the Bid Protest Committee.

The role of Cabinet and it’s “No Objection” to contract awards

The PPC has fully deliberated on the continuing, “No objection role” of Cabinet, but, having regard to recent media reports, has considered it necessary to ensure full public awareness on this issue. Recent media reports suggesting that the continued role of Cabinet is linked to the PPC being “operational and functional” are inaccurate and misleading as neither the Constitution nor the Procurement Act provides for the PPC to take over this function from the Cabinet.

The Constitution empowers the PPC to carry out oversight of the procurement system in Guyana and its functions are clearly outlined as set out above. None of those functions provides for a “No Objection to Contracts” role for the PPC. Indeed, it is the view of the Commission that such a role would entrench the PPC as an integral part of the procurement process, which it is intended to monitor and regulate.

A conflict arises between the provisions of Section 54 (1) and 54 (6) of the Procurement Act.

Section 54 (1) states,

“The Cabinet shall have the right to review all procurements the value of which exceeds fifteen million Guyana dollars.  The Cabinet shall conduct its review on the basis of a streamlined tender evaluation report to be adopted by the authority mentioned in section 17 (2). [i.e., the NPTAB and after its establishment the PPC]. The Cabinet and, upon its establishment, the Public Procurement Commission shall review annually the Cabinet’s threshold for review of procurements, with the objective of increasing that threshold over time so as to promote the goal of progressively phasing out Cabinet involvement and decentralizing the procurement process.”

A literal interpretation of this section clearly indicates that the review role of Cabinet should continue even after the establishment of the PPC, with an annual review by the PPC of the threshold so that over time, by raising the threshold, the role of Cabinet would be eliminated. Section 54 (6) however provides as follows:

“Cabinet’s involvement under this section shall cease upon the constitution of the Public Procurement Commission except in relation to those matters referred to it in subsection (1) which are pending.”

A literal interpretation of this section directs the immediate cessation of Cabinet’s role once the PPC is constituted. Neither section, however, provides for the PPC to take over that function from Cabinet. The role of the PPC is limited to approving the format of the streamlined report to be sent to Cabinet and if all of section 54 (1) is to prevail, reviewing the threshold of the value of contracts to be reviewed by the Cabinet.

Based on the foregoing, the Commission is not empowered by the Constitution or the Act to grant no objection or to award contracts. The awarding of contracts is the responsibility of the Procuring Entities and the National Procurement and Tender Administration Board (NPTAB). These agencies are responsible for the public advertisements of contracts, evaluation of bids and ultimate approval and award of contracts.

The role of the Bid Protest Committee

A bidder whose tender or proposal has been rejected and is aggrieved may submit a written protest to the procuring entity in the manner and time-frame specified in section 52 of the Act. That bidder may later make the protest to the PPC under section 53 of the Act. Section 53, however, needs clarification and possible amendment, as its provisions, unless revised, appear to run directly in conflict with the provisions of Articles 212AA. (1)  (h) and (i) of the Constitution, which place the authority to investigate complaints from suppliers, contractors and public entities, as well as investigate cases of irregularity and mismanagement, with the PPC.

The provisions for the appointment and functioning of a Bid Protest Committee may have been appropriate prior to the establishment of the Public Procurement Commission. Now that the Commission is established, there is need for revision of both the provisions of the Act and the Regulations that deal directly with the appointment and functioning of the Bid Protest Committee. For example, Section 53 (6) of the Act states that the decision of the Bid Protest Committee shall be final and immediately binding upon the procuring entity and clause 13 (9) of the Regulations states that the award of the Bid Protest Committee shall not be open to administrative review. Until these apparent conflicts are resolved the Commission will be constrained from effectively carrying out its constitutional mandate.

Finally, it should be noted that the primary impediments to the full operation of the PPC are the absence of appropriate office accommodation, adequate budgetary resources, transition of functions from the NPTA and requisite staffing of the Secretariat of the Commission. These issues have affected the accessibility of the PPC to the full range of stakeholders that it is intended to serve and restricted its ability to fully execute its functions in a stable and appropriate environment.

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