Public procurement pressure

The complete overhaul of our country’s public procurement system is urgently required, given the daily reports of large-scale theft and waste of public money.

The last administration lost public confidence due largely to the high levels of corruption, as revealed in the Uff Enquiry into the Public Sector Construction Industry.

The JCC met in April 2010 with the leadership of the People’s Partnership at its request and with the media in attendance.

At that meeting, the People’s Partnership made three significant promises:

  1. Implementation of the recommendations of the Uff Report – This was the first item at the first post-Cabinet press briefing on July 1, 2010, with the Justice Ministry being tasked to implement those critical recommendations. That promise has been broken.
  2. Tabling of legislative proposals for public procurement within one month of an electoral victory. Then Finance Minister Winston Dookeran did lay two draft bills — a 1997 draft to repeal the Central Tenders Board Act and a 2006 draft Public Procurement Bill — so that promise was fulfilled.
  3. Creation of new laws for Public Procurement & the Disposal of Public Property within one year of an electoral victory.  Despite the statements at pg 18 of the People’s Partnership Manifesto, the appointment of a Joint Select Committee (JSC) and many public pronouncements, that has not happened.

The Private Sector/Civil Society group which is campaigning for this critical public policy reform is comprised of:

  • Joint Consultative Council for the Construction Industry (JCC)
  • Trinidad & Tobago Chamber of Industry & Commerce (The Chamber)
  • Trinidad & Tobago Manufacturers’ Association (TTMA)
  • Trinidad & Tobago Transparency Institute (TTTI)
  • American Chamber of Commerce (AmCham)
  • Federation of Independent Trade Unions & NGOs (FITUN)
  • Local Content Chamber

The PSCS group submitted its own Draft Bill to the JSC in December 2010 — it was also published on JCC’s website.  Our draft was derived from the two draft bills tabled by Dookeran: it also conforms to the proposals in the 2005 White Paper, the learning in the Uff Report and international best-practice. At no point has there been any public criticism or response from the administration. No doubt the JSC procedure was intended to cover that requirement.

The Prime Minster stated, at the close of the Budget Debate on 10th October 2012 — at pg 237 of Hansard

…Mr Speaker, we propose to send before the Legislative Review Committee, the report of the joint select committee and, in addition, this document. This document has been prepared by the Joint Consultative Council for the construction industry; the Trinidad and Tobago Transparency Institute; the Trinidad and Tobago Chamber of Industry and Commerce, and the Trinidad and Tobago Manufacturers Association. This document is a draft Bill, 2012—“Draft Public Procurement and Disposal of Public Property Bill, 2012”, which will be sent to the LRC for consideration for the laying of a Bill in Parliament for procurement…

The government is now advancing its own draft Public Procurement Bill as the preferred alternative to our group’s submission. The government bill is being presented as the outcome of the JSC process, which is a misleading spin being put on this matter of utmost public importance.

The Minister of Planning & Sustainable Development, Dr Bhoendradatt Tewarie, was also the chairman of the JSC when it presented its report to Parliament. Tewarie’s letter of October 28, 2013 to the PSCS group states –

…All submissions, written and oral, from interested parties would have been taken into account by the Joint Select Committee in arriving at its consensus and this includes submissions from the Private Sector/Civil Society group. The recommendations of that Joint Select Committee were unanimously accepted by Parliament after full debate…

Given that the PNM abstained from voting at both the JSC and in subsequent Parliamentary debate, Tewarie’s claims for “consensus” and “unanimous acceptance” are false.

The PNM withdrew the 2005 Public Procurement White Paper as public policy in 2006, so there is no formal statement as to PNM’s policy on these issues.

The government’s draft bill is inflexible and inadequate to deal with the severe challenges of controlling the widespread public procurement corruption and waste now rampant in our country. A new law which is inadequate will only worsen this very serious situation by raising expectations, yet doing little, if anything, to stop the rot.

The PSCS group’s November 25, 2013 letter to Tewarie restated our position on the five indispensable elements of an effective Public Procurement system:

  1. use of public money as the cornerstone of any public procurement process;
  2. definition of procuring agency encapsulating any organisations responsible for transactions in public money;
  3. Effective independence for both Regulator and grievance resolution;
  4.  Value for money linked to performance/efficient use of Public Money; and
  5. Embedded participation of civil society to maintain the integrity of the procurement system.

EASY COMPARISON

ELEMENT

DEFINITIONS

PSCS DRAFT

GOVT DRAFT

Public Money Public Money is monies due to or payable by the State or its Agencies, including any monies for which the State is ultimately liable. Modern definition, linked to provisions which protect the public interest. Only the definition is included, but since there is no reference to any other provisions, the concept of Public Money has effectively been excluded.
Transactions in Public Money Transactions‘ is an essential concept to cover all the various ways Public Money can be involved – this includes Government to Government arrangements; State Enterprises; disposals of public property including licences, concessions and real estate; BOLT; PPP and so on. Modern definition, linked to provisions which protect the public interest. ‘Transactions’ are omitted, leaving the larger transactions outside the control of the proposed system.
Effective Independence of Regulator and Grievance procedure This element is essential to avoid the interference of politicians.  To ensure non-interference, the Regulator is only accountable to Parliament. Procurement Regulator funded via Consolidated Fund and appointed by the President. Regulations to be approved by Minister of Finance.
Value for Money To avoid waste of Public Money Value for Money checks are an integral part of the proposed Procurement Guidelines. No specific provisions to achieve Value for Money.
Civil Society participation It is commonly accepted that for good governance, Civil Society involvement is a defining feature of successful Public Procurement systems. National Procurement Advisory Council comprising Professional groups, Trade Unions, Business Service Organisations and Civil Society to monitor the effectiveness of the system. No proposals for Civil Society participation.

On a matter of this utmost public importance, any government must publish its draft Bill for public consultation. Public procurement reform is far too important to our nation’s development for the usual secrecy and dishonesty to prevail.

We don’t want another Section 34.

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13 thoughts on “Public procurement pressure

  1. Nr.Raymond, PLEASE colaborate with other like minded/spirited people and start a “TV SHOW” to better engage the nation on a regular basis. To have the impact and have a powerful positive impact on our nation !

  2. The steps to move forward with a weakened draft bill while ignoring to even acknowledge the proposal of the JCC is not by accident but carefully calculated move by the Government.

    Clearly the JCC is a thorn on their side that I would bet that they would love to see go away.
    With the omission of key words and/or phrases in the draft Bill, the back door for obscure interpretationand room for continued corruption can continue while giving the Public a false sense of security.With the passage of the Bill as is, then it will be business as usual.

    As I tried to make sense of this article a couple of questions came up:
    You mentioned this Bill as the Government’s Bill. That is a bit vague.
    Question : Who in Government proposed this Bill?
    Was it drafted by the minister him/herself?
    Question: If not, which Legal Firm helped them draft this Bill?
    Reason for this: Suspicions of a personal agenda in seeing this Bill pass as is.

    1. Hello Bally and thank you for your supportive comments…

      To the best of my knowledge, the Govt draft Bill was prepared by in-house attorneys, likely from the AG’s dept.

  3. Respectfully, revising the procurement process is not the answer – More layers of government bureaucracy will make things worse.

    The very nature of government ensures corruption will remain a pervasive scourge on Trinidad and Tobago.

    The political system essentially bestows inherent power upon politicians to disburse tax revenues at the discretion of the politician. They have the power to award and cancel contracts, give hand outs, approvals and special favours.

    Given this structure persons and businesses with an interest in benefiting from potential political favours from politicians essentially position themselves in the Political Auction House. The political favours therefore end up going to the highest bidders i.e. the persons with the deepest pockets.

    Consequently the wealthy or the business class are granted a significant advantage over the rest of society as they are able by virtue of their purchasing power to extract the greatest benefit from the politician.

    What makes this worse is that the auction house attendees bid for tax revenues offered by politicians that were extracted from the wider less affluent population. This phenomenon perpetuates a societal system by which the rich can get richer and the poor gets poorer. This occurs because the elite class can outbid average citizens in influencing and dictating the way tax dollars are distributed throughout society.

    What should be done therefore to mitigate this unpleasant reality? Shrink the power, scope and size of the state, thereby limiting the politician’s ability to dole out favours and tax payer dollars at their discretion. A gradual move to a less centrally planned more free-market environment with smaller government, would lead to less corruption in the distribution tax dollars.

    If the citizens of T&T think long and hard they’ll realize in spite of what the state has led them to believe they pay more into the government coffers than the value they get out in terms of services & support rendered by the government.

    1. I am in the United States and your comment here reminds me of something I call “separate pocket syndrome” whereby one layer of government wastefully spends money from another layer of government. A local school will spend $10 of state money if it saves them $1 of local money. In the end all money comes from the taxpayer, so such logic obviously is flawed.

      Don’t misunderstand me to think that I am a fan of hyper-active outsourcing. I agree more with what you say. Unfortunately the mindset of many Americans these days is to outsource more and more government services to the for-profit private sector. That has been and continues to be a disaster, IF you can ever get the truth out of our corporate-controlled media.

      That’s another truth of big government. Big government feeds and enables mega corporations, corporations that are big, bloated, and inefficient and would never survive in a true free market.

      1. Hello Rich,

        I am welcoming your critical participation here.

        The G2G arrangements explored in this blog at ‘Foreign Affairs’ are indeed separate pockets which allow for excessive, unexamined use of huge sums of Public Money, that being the very reason they need to be included in any system of Public Procurement oversight.

        Apart from my blogging, I am also President of the Joint Consultative Council for the Construction Industry – an umbrella-group representing the interests of the professional associations of Architects, Surveyors, Contractors, Engineers, Planners and Facilities Managers – so you can see our work at http://www.jcc.org.tt/index.htm.

        Best Wishes

        Afra

      2. Checks and balances, watch for conflicts of interests, gatekeepers need to be well educated, not head-nodding “yes men” types. As you know Afra I am working with a few other people here in the US to greatly escalate the presence of procurement professionals for construction projects. I am an engineer myself and while my profession is known for integrity, it is arrogant and naïve to think that we should be put in self-monitoring positions when there are conflicts of interests and revolving door scenarios. Once a bad habit gets into the circle it’s hard to weed it out due to a lack of outside oversight. NIGP tells me procurement oversight is on an upward curve, but we’re nowhere near where we need to be with it at this point in time.

  4. I agree in part with the above but we must consider that we will then revert to the capitalistic vagaries of the private sector which, when profits are maximised its rich members jump ship and force the looted taxpayers to pick up the pieces at great personal loss and humiliation. Then when things are ‘better’ these vultures return smiling, for a new exploratory cycle has begun. We need to lock away those who steal public funds at any level and the Auditor General MUST account for each penny spent of public funds and the invoices, cheques and contracts MUST be accessible for public scrutiny at all times.
    Citizens have to pay taxes and the disbursement of these funds MUST be sanctioned by the public. The mantra is “When the expenditure of public money is without accountability and transparency, it will always be equal to corruption.” If you are not outraged, you were not paying attention.

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