The Procurement Act 2003 By Eusi Kwayana
Stabroek News
April 4, 2004

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It is not surprising that the Procurement Bill led to so much disagreement in and out of the National Assembly. Procurement, or contracting, has been a focal point of the struggle over the distribution of work and wealth in the Guyana economy.

For those who will make the reflex leap for the gun because of the source of this argument, let us recall that the late PPP Leader supported equal opportunity legislation, which is the spirit or ought to be the spirit of the procurement reforms. In this case I am urging equal opportunity for equal talent, know-how, expertise, experience in the optimum mix of these factors. Think of experience and the Charity wharf, and the point will at once become clear.

There are two public sector procurement bodies. In the first, the government does the procuring. In the other, the private citizen, a business person tries to procure rights and facilities. Government procuring will now be done nominally under the Procurement Commission. The other is done under Go Invest. The two should not be seen as not related.

The Procurement Act 2003 replaces the Procurement Act 2002, which was crudely unfair. How far is the new act fair? To what extent does it place the executive at arm's length in the administration of tenders? This, it was presumed, was the whole point of the Procurement Commis-sion, unless the public was much mistaken.

The new act is "An Act to provide for the regulation of the procurement of goods, services and the execution of works to promote competition among suppliers and contractors and to promote fairness and transparency in the procurement process."

The objectives as listed are concerned with maximising "economy and efficiency", "encouraging participation" and promoting integrity and fairness and public confidence," apart from achieving transparency. An independent press with access to information is a much better means of ensuring transparency. There is no declared objective of striving for ethnic or gender equity or balance.

This controlled, many-layered, five-storeyed, procurement structure will not ensure transparency. In fact, section 55 creates blanket offences, regardless of motive for members of procurement bodies "not to regard as secret and confidential" documents coming to their knowledge in the course of their work. It will also be an offence to pass any of this information to "any person." Imprisonment for the guilty is promised.

There is no guarantee that the administration will make information available to the media or the public even after an issue has been decided. It is a sweeping and unreasonable provision which runs counter to the freedom to receive information affirmed in the constitution. In fact this section 55 seems to "hinder" citizens in their right to public information guaranteed in article 146, which does not protect the tendering process.

The objectives of the act seek to ensure participation by suppliers and contractors "regardless of nationality, thereby promoting international trade." This statement is not necessary as all international lending agencies already insist on space for their own suppliers. The conflict has been over domestic participation. This aspect is not stressed at all in any of the provisions of the new act. The promoters of the bill seemed happy to do what has already been done and to leave undone the issues of domestic participation.

If we look at the status of other commissions, we find that each has the essential powers relating to the objectives. Some are then authorised to delegate some of those powers to particular agencies or agents. It is not too much to say, to use a familiar concept, that the Procurement Act marginalises the Procurement Commis-sion.

The act, which is intended to "provide for the regulation" of the procurement process, does not empower the commission to "regulate." The act creates at Section 16 "The National Procurement and Tender Administration" with extensive powers, which will be stated below.

Since the amendments to the present act, moved by the Minister of Finance and circulated on June 19, 2003, the cabinet has lost some powers to the Procurement Commis-sion. The commission has a role in the review process, yet the amendments left the most important power of review in Section 54 (1) in the hands of the cabinet. It is the right of review of all procurements over the sum of fifteen million dollars. The constitutional body, the commission, can object to an award but not later than twenty-one days after an award has been made.

The amendments have got rid of "restricted tendering," and this will no doubt be seen as a victory for fairness. However, it is a relatively minor victory.

Since the National Board had been provided for under the 2002 Procurement Act, Section 17 of the 2003 act removes powers from the National Board and places them with the Procurement Commission. But the powers removed are the powers in Section 17 only, and not the other very important powers of control found in other provisions of the act.

As a consequence of Section 17 (3) the commission is now responsible for "making regulations governing documents to carry out the provisions of the Act." It can settle the forms of documents to be used for pre-qualification contracts, as evaluation forms and for other such administrative purposes.

The unsatisfactory nature of the commission's powers has been argued. It is now time to show the far more central and far more decisive functions of the National Board. Under section 16, the National Procurement and Tender Administration is established. Its board, The National Board, "shall be responsible for exercising jurisdiction over tenders the value of which exceeds such an amount prescribed by regulations, appointing a pool of evaluators for such period as it may determine and maintaining efficient record keeping and quality assurances systems." These powers are left intact with the National Board.

A reading of the minister's Explanatory Memorandum attached to the bill and seeking to highlight its main provisions will strike the reader in one respect. The notes do not mention the role of the Procurement Commission.

The National Board's powers are far-reaching. It can create in each administrative region a Regional Board, in which it appoints the majority of members. The full-time member and chairperson of each Regional Board is chosen also by the National Board. The National Board-controlled regional boards each nominates qualified individuals to serve on an Evaluation Committee for tenders in the region.

At its discretion the National Board may create a District Board for a Neighbourhood Democratic Council on the same terms as above, terms which leave control with the National Board.

To place the tendering machinery in context, sections 16 and 17 of the act are helpful. Section 16 creates the "National Procurement and Tender Administration" which is "managed by the National Board" of the administration. The administration, of course, is an agency "reporting to the Minister of Finance."

The board which controls the administration is itself appointed wholly by the Minister of Finance. The minister can choose not more than five persons from the Public Service and not more than three from the private sector. In making these choices the minister is not even required to consult anyone or to receive nominations from any agency.

Sadly, after all the energy and thought put into the creation by the Constitution Reform Commission of the Procurement Commission, the government can, if it chooses, have its own way through the Minister of Finance.

To crown it all, the minister has the duty of making "any regulation that may be necessary for the administration of this Act." He does this with the advice of the National Board or the Procurement Commission.

Lawyers have a word for it. They describe laws as 'colourable' when they undermine the purpose they claim to set out to achieve. Our electoral laws of 1968 were colourable.

It is fitting that citizens study the Procurement Act 2003 as amended, and express opinions on it.