Construction, Engineering and Transportation
Proposals for New Procurement Regime
Since sign-off in August 2005, the Construction, Manufacturing and Business sectors have been impatiently awaiting and calling for the implementation of the recommendations in the White Paper on Public Procurement.
In late April 2008, amidst new controversy around State-owned Urban Development Company of Trinidad and Tobago, which handles billions of dollars in procurement contracts, Prime Minister Patrick Manning assured that by year-end, a new procurement policy would be finalised.
The 2005 White Paper is entitled Reform of the Public Sector Procurement Regimeand was developed by a committee comprising representatives from the Joint Consultative Council for the construction industry (JCC), Trinidad & Tobago Chamber of Industry and Commerce, Trinidad and Tobago Manufacturers’ Association, Central Tenders Board, Tobago House of Assembly and Ministry of Finance. Chairman of the committee was then Permanent Secretary in the Ministry of Finance Kamal Mankee.
The 58-page document reviews the current system, outlines the need for a new procurement policy, examines current best practices and details the recommended model, termed “the preferred procurement model” or “principle model.”
Underlining that the current regulatory framework for procurement was the Central Tenders Board (CTB) Ordinance of 1961, the White Paper indicates that this legislation applies mainly to Government ministries and departments and some statutory authorities and states:
There are other agencies using public funds, including State-owned enterprises, statutory authorities and civil society, whose procurement practices fall outside the ambit of the Ordinance. The new framework must apply to all.
Summarising the development of public procurement away from a central regulatory agency, the White Paper states that the Central Tenders Board was established in 1961 to address a number of financial management problems arising from a significant increase in public sector in-house construction activity. The 1961 Ordinance gave the CTB sole and exclusive authority for public procurement. However, in 1979, the Ordinance was amended to allow the Government to act on its own behalf and “reflected a major shift in policy on the role of the CTB as Government’s sole procuring agency.” In 1987, a further amendment provided for the handling of matters in the event of an emergency without reference to the CTB. In 1991, another amendment provided for a special ministerial tenders committee within the Ministry of National Security to procure arms, ammunition and equipment for the Defence Force and Protective Services. In 1993, an amendment validated the National Insurance Property Development Co Ltd as a procurement agency for Government outside the ambit of the CTB.
The CTB can be bypassed even by agencies under its purview once they receive Cabinet approval. In addition, the Ordinance does not apply to tendering on financial matters resulting in delivery systems such as Design/Finance/Build, BOLT and BOOT projects so that procurement on such projects also fall outside of the CTB.
The Preferred Procurement Model emphasises and seeks to achieve value for money in public spending, greater public accountability, greater transparency and effective and efficient contract performance.
It aims to have these principles and the proposed new procurement regime applied wherever there is spending of public money. It defines public money as:
All money received by a public body, regardless of source
All money received by a non-public body, from a public body
The White Paper also expands the scope of public procurement to include the prior design stage in which needs are identified, scope of works determined, costs estimated and bid packages prepared.
In general, the White Paper proposes an overarching legal and regulatory framework applicable to all procuring entities using public money – in contrast to the current legal environment of parallel procuring systems – and also applicable to the acquisition and disposal of public property. It proposes a regulatory body and introduces the role of a regulator who will be central to the new procurement regime. The regulatory body will be a statutory body to enable Parliamentary oversight as provided for in the Constitution. The regulator would not be accountable to the Executive but directly to Parliament and would be appointed by the President at his own discretion, for a minimum of five years. “The regulator must not only be, but also be seen to be, technically competent and above reproach,” the White Paper noted.
To achieve the goal of greater transparency, the Principle Model emphasises disclosure of information, including publication of details of contracts and report of publicly available procurement opportunities in an adequate and timely fashion.
To make procuring agencies more accountable, the White Paper recommends that each agency appoint an officer who would be responsible and accountable for the overall management of the procurement activities of the Agency. “However, the ultimate responsibility resides with the Chief Executive,” who is accountable for their agency’s procurement performance and for ensuring that adequate systems for recording decisions and reasons for making them are maintained, the White Paper put forth. Accountability, it adds, “means that officials are responsible for any plans, actions, decisions and outcomes that involve spending public money.”
Other initiatives proposed in the White Paper include:
A National Procurement Advisory Council comprising representatives of civil society appointed by the President which would support the operations of the Regulatory Body and monitor the activities of procurement agencies.
A Complaints Mechanismthat would accommodate complaints both prior to award of a contract and post award with the Regulator having the power to suspend the tender process, assess damages, void contracts and order a prohibition for some specific period of time from further dealings with the offending private party.
A Review Mechanism– triggered by identification of a need by an independent panel and then implemented at scheduled milestones in the life of the project.
The Promotion of Competitive Local Industries – achieved by procuring agencies giving domestic industry first option to provide all goods and services required “once they satisfy the criteria of competitive quality, price, standards and delivery schedules.” In addition, domestic industry would receive a 10 per cent price differential over foreign suppliers of goods and services.
FAST FACTS
Additional measures proposed by JCC in a 2007 position paper include:
All projects at the construction stage up to US$35 million be reserved for private sector construction firms owned and controlled by CARICOM nationals.
Projects below US$1 million be reserved for firms defined as small business.
Projects over US$35 million be encouraged to meaningful joint venture with international contractors.
All State-owned or special purpose agencies be required to prepare Local Industry Participation Plans and report annually through an Independent Auditor on levels of local industry participation.
Strategies to be developed under new Procurement Regime
• Establish regulatory body and appoint regulator
• Appoint national procurement advisory council
• Establish procurement units in all State agencies
• Establish a central procurement database with information on procurement opportunities, processes, contract awards and prices
• Design of appropriate IT systems to support regulator’s reporting requirements
• Establish e-procurement system
• Design and production of handbooks detailing processes involved in public procurement for particular sectors such as procurement of construction services, procurement of IT goods and services or acquiring and disposal of property.
• Develop code of ethics for procurement officer.
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