In the previous article, the most glaring lacuna in the procurement puzzle was identified as the gap between the recommendations made by the State Enterprises and the decisions taken by the Cabinet in relation to the award of large-scale contracts.

In this context, a lacuna is an informative, usually intentional, gap in a discourse. Just consider that, in all the many statements on these interlocking issues, not one person has actually said ‘Cabinet ratified this recommendation by that State Enterprise‘ or ‘Cabinet made that decision which was not recommended by this State Enterprise‘. Fascinating, really, almost as if there is a joint select decision not to discuss how they reach their decisions. In relation to the Invaders’ Bay imbroglio, I dubbed that kind of thing ‘carefully cultivated confusion‘. You see?

A gap analysis measures actual against desired performance so as to establish what are the changes needed to improve results. This article will sketch a gap analysis of this crucial stage in the public procurement process and suggest the implications of those gaps.

In the existing arrangement, Cabinet makes the specific decision to award large-scale contracts via State Enterprises. Briefly, State Enterprises invite tenders/proposals and assesses those before preparing the tender report, which is sent to Cabinet for the ultimate decision to award.

The Customs & Excise Building

customs building
Customs & Excise headquarters

The Uff Enquiry presented a vivid case of this issue being debated publicly, live on national TV and the Internet. In that case, the then Planning Minister, Dr Keith Rowley, called in the then UDECOTT Chairman, Calder Hart, to express his concerns at the tender process for that large office-building project. From what I can remember, the UDECOTT Chairman protested that the only person he took instructions from was then PM , the late Patrick Manning. That episode seems to have been the trigger for the bitter and prolonged political battle, which has now ended with Dr Rowley as our PM.


Is TSTT a Special Case?

tstt1-cartoon
Image courtesy TSTT. Illustration by NiCam Graphics.

There is one interesting recent exception to the decision-making practice I have been discussing and that is the recent acquisition of Massy Communications by TSTT earlier this year. In that case, TSTT and Massy Communications announced the agreed acquisition for $255M at a joint Press Conference in May. There was an immediate furore, in which TSTT was accused of not having obtained Cabinet approval for this large transaction. The TSTT response, which was supported by the PM, was that their strategic plan had been agreed upon by Cabinet, and that this particular acquisition was part of the approved plan. Notably, Dr Rowley reportedly said that Cabinet was not going to micro-manage TSTT.Two issues arise from this TSTT episode—

  1. Firstly, is TSTT a State Enterprise?
  2. Secondly, why is the same procedure not used throughout the State Enterprises to obviate the need for Cabinet oversight of every large contract?

The key issue is the Cabinet’s role in making these large-scale decisions—is it approving the recommendations of the State Enterprise, or is it making decisions that differ from the advice submitted. Some would assert that the Cabinet is merely checking compliance with procedure and policy before ratifying the recommendations of the State Enterprise. Others hold that the Cabinet is doing more than that in legitimately exercising its powers to decide on contract awards. One former Minister even agreed with me that Cabinet had no explicit, legal power to decide on contract awards, but he rejoinder-ed sharply that the ultimate power was theirs, that of dismissal.

As I outlined in `Board Games Redux‘, the existing laws and regulations do not support the existing procedure. Apart from those issues, there are other, perhaps more serious, questions to be examined here.

In the first case, the Cabinet is simply verifying the conformity with policy and procedure before ratifying the recommendations of the State Enterprise. So why not just have that process done by another body and relieve the Cabinet of those responsibilities. The estimated number of Cabinet decisions annually is about 4,000—that’s right, an average of over 75 decisions are made in each weekly meeting. Given that Cabinet meetings are only a few hours long and attended by over 25 people, one can scarcely imagine how its decisions are taken. You see?

So, that leads right to the alternative, in which Cabinet makes decisions contrary to the recommendations of the State Enterprises. In that case, in light of the background, on what basis could the Cabinet set aside the recommendation of the State Enterprise?

There is no way of knowing which of these is the prevailing mode of decision-making, given the cloying official secrecy. Tender Reports and Cabinet Minutes need to be published so as “…to allay suspicion of improper actions or potential corrupt influences…”, as per the 39th recommendation of the Uff Report. That elementary transparency could transform this turbid scenario for the better. Having recently been engaged in robust exchanges with several State Enterprise Board Directors on these issues, it seems that the Uff Report is little more than a distant memory.

S.13 (1) of the new Public Procurement & Disposal of Public Property Act requires that the Office of Procurement Regulation (OPR) maintain a database of these details, so why the current emphasis on these issues. Lack of maintenance is a national issue, but there is also the question of just when the new law is to be fully implemented. The OPR’s CEO and Chairman is the Procurement Regulator. The closing-date for that post was Friday 1 September 2017, with those applications to be made to the President. We are now at the start of November, so when is this critical appointment to be made? Have the applicants been contacted? Have interviews been scheduled?

Given the current silence on these matters, I will continue to focus on improving the existing arrangements. We need to be vigilant to protect the Public Interest.

 

© 2017, Afra Raymond. All Rights Reserved.

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3 thoughts on “Property Matters – The Gap Analysis

  1. Afra,
    Good piece.

    My thoughts:
    I don’t think the cabinet can be so reckless to go against the recommendations of the tender committee of NIDCO, after all the way their two envelope system is setup, once a Company moves forward from the Technical to the second “envelope”, the financial the lowest price would be considered, unless of course you are -minus the engineer’s estimates by whatever their threshold is.

    The inherent problem with that system is, as a company continues to bid low and tie up their recourses “Human, Equipment and Financial”, where does NIDCO draw the line, do they analyze the company recourses at that time, by doing site visits, do they work through the method statements, to ensure that what is said can actually be executed on, i.e.: Human and Equipment wise.

    Outside of that there is the $60,000.CLUB!

  2. @Miguel…you have quoted ‘recourses’,is this a typo?I interpreted ‘resources’.And Afra you know as of now the implementation of the Public Procurement and Disposal of Public Property Act has been delayed

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