Every government has accused its predecessor of abusing the State’s procurement process for unjust enrichment, either by its supporters or by certain Cabinet ministers. No administration has been immune from those allegations, though very few have had to answer charges or be convicted. Given the number of alleged corrupt deals, the public has remained sceptical, presuming that where there is smoke, there is fire.
Management theorists have long indicated that to achieve efficiencies in a dysfunctional organisation, systems and procedures must be streamlined, changed, and people retrained.
To address the widespread belief that the state procurement process was flawed, a procurement law was designed to remedy this deficiency.
The Procurement Act was first passed in 2015, amended in 2016, 2017, 2020, and 2023, and came into effect by legal notice 106 of 2023. Public procurement means the acquisition of goods, works, or services involving the use of public money. The act repealed the Central Tenders Act and established the Office of Procurement Regulation (OPR).
It governs public procurement and the retention and disposal of public property based on the principles of good governance, namely accountability, transparency, integrity, and value for money.
The act defines “public money” as funds received under an Appropriation Act or received from a public body. A public body is defined as a ministry department or division of a ministry, municipal corporations, state-controlled enterprises, the Judiciary, Parliament, and other similar institutions.
Each “public institution” is responsible for its procurement and developing the rules that govern the procurement process. Best practice guidelines are effectively captured and set out in the Handbooks prepared by the OPR, which give clear and practical guidelines on what can be done at each stage to ensure the procurement objectives and governing principles are met.
There are limits and exemptions to the act that limit its coverage. Services such as emergency medical, accounting, audit, legal services, debt financial services, or other services as determined by the minister or as recommended by the OPR office. Also excluded are government-to-government contracts, treaty obligations, or agreements between the GORTT and international financial organisations. Also exempted from the act is the procurement of goods and services under $1 million. For example, given these exemptions, the Attorney General simply selected the attorneys he required in the legal action with the Auditor General.
The act recognises that systems must be modernised if not adjusted. Central to the act are the operations of the OPR, which is empowered with a wide range of functions to achieve its objectives.
The effectiveness of the act depends on how well the OPR will achieve its monitoring function. Information technology is meant to play an important role in this process.
Consequently, it must establish a comprehensive database to record tenders, the award of contracts, and the value of the contracts for public information. This database will only be as good as the information it contains and the systems and procedures to keep the database well-maintained and up-to-date.
Similarly, it must maintain a database of all pre-qualified suppliers, contractors, arbitrators, mediators, and experts. It is responsible for setting standards, competence levels, certification, and training requirements for procurement officers in all public bodies and in the OPR office itself.
The OPR is required to promote the use of technology. But while it may promote the use of technology, public bodies will only adopt new technology if they have the financial resources and management will to make this transition.
As part of its regulatory function, the OPR is required to provide guidelines, develop guides or models, and standardise bidding documents and procedural forms. S14 of the Act requires the OPR to audit and review the procurement systems across all public bodies and harmonise policies, systems, and processes.
Annually, it must collect data on all procurement contracts and publish a report for presentation to the Minister and Parliament. Where there is any objection to a specific procurement exercise, the OPR is empowered to investigate and suspend the process.
Given the OPR’s wide range of regulatory powers, it is critical that the OPR’s staff be well-trained and its systems be robust if it is to be an effective agent of change. All organisations are challenged to remain relevant and in good condition.
Readers should note that the Central Tenders Board was implemented in 1965 to address similar allegations of corruption that spawned the Procurement Act. State enterprises were established to circumvent the bureaucracy associated with the civil service.
It is important to note that the public procurement process is now meant to dovetail with the annual budgetary process and appropriation cycle.
This may have been assumed before, but the act now makes this an express requirement. Achieving this in practice would represent a significant improvement.
The act demands a certain degree of organisation and planning in managing the procurement process. This creates an opportunity to improve the operational performance of public bodies. Deploying project management practices would further enhance efficiency in utilising public money.
Next week, we will look at the readiness of public bodies for these changes.
Mariano Browne is the Chief Executive Officer of the UWI Arthur Lok Jack Global School of Business.
