MLAs back bill to tighten public procurement

(CNS): A bill designed to remove political interference, create transparency, improve efficiency, get better value for money and generally tighten up the entire process around government procurement was backed by the parliament Monday, with no opposition, following its second reading. Government hopes that the legislation, which has been a long time coming and inspired by years of concern raised publicly and frequently by the Office of the Auditor General, will eliminate perceptions of corruption and, in the end, save government money.

Presented to the Legislative Assembly by Finance Minister Marco Archer, the government’s procurement bill sets out fair and clear principles surrounding how government buys goods and services and signs contracts for major works. Outlining the details of the bill and its aims, Archer told his political colleagues that among the many benefits, the introduction of a central procurement office would help harness the buying power of government and cut costs. He said the law had been analyzed by international experts and that it addressed all of the concerns raised by auditor generals in the past about the problems with the governance of public finances.

Numerous reports from the OAG over the years have documented a worrying catalogue of mismanagement surrounding government contracts. The auditors have pointed to the failure to ensure value for money, the lack of expertise leading too poor purchasing and procurement decisions, inappropriate political interference, and the very real risk of fraud and corruption.

Archer said that those dangers were highlighted starkly in the CarePay scandal and the subsequent corruption trial that saw Canover Watson, the former Health Service Authority board chair, found guilty of a number of offences regarding an $11 million hospital contract.

Archer said the Cabinet had authorised the deputy governor to design a new regime and create a new office to tighten up the procurement process, and the new bill that has emerged after several years of work will create a more efficient and transparent regime, with a new procurement committee free of political influence to select contractors and a central office to manage all purchases by core government, as well as statutory authorities and government companies.

It also paves the way for new types of procurement systems instead of the classic tendering process, including modern flexible concepts, such as online reverse auctions for government contracts.

There will be a code of conduct that everyone involved with procurement on the government side and suppliers on the other will need to abide by. The law also clarifies the roles of everyone involved and makes chief officers more accountable for the procurement they are involved with.

Archer said that transparency was critical in eliminating corruption and would therefore be an important part of the new regime, with the creation of a new website and an annual report from the procurement office, as well as chief officers’ reports on smaller purchases that will be handled at the ministry level by entity committees.

Another new element will be ‘debriefs’, or contractors that failed. While government plans to prioritise local companies in the new regime, they will also give feedback to those that don’t make the grade, which will not only help them secure future contracts but it will help dispel any perceptions of unfairness in the process.

The law was welcomed by most members of parliament. Winston Connolly, who is now on the opposition benches, gave his full backing to the bill, saying that everyone had heard about the way people had tried to circumvent the rules in the past, and he applauded the PPM government for taking the initiative, given the near quarter of a billion dollars government spends on goods and services annually. He said he was happy government had listened to the auditor general and the man on street, who was well aware of what had happened in the past and knows the current system had not always been fair.

Connolly, the sixth elected member for George Town, said that in future the authorities should make an example of people who break the laws and ensure that they face consequences because in the past, time and again, officials had escaped any sanction despite the obvious mismanagement and abuse of the system.

Alva Suckoo also welcomed the law and offered his full support and suggested government hold workshops for businesses to help them understand the new regime and the more exacting rules.

Joseph Hew recounted his own difficult experiences as a businessman who had dealt with government and had found the old regime difficult. He said that most companies working with the government would add premiums to the prices they offered because the system was cumbersome, unpredictable and payment was always a problem. But with a new clearer regime, there was now as opportunity for the Cayman government to save a lot of money for the public purse.

Hew said he believed the private sector would welcome the law and in future find doing business with government much easier. He said that when he first saw the plans for the new legislation and regime, he thought it was a “huge mountain for government to climb” and had not expected to see the legislation before the end of this administration. “But they did it,” he said, as he congratulated and thanked those involved.

The only slight voice of decent came from Arden McLean, who said that although he would support the law, he did not think that political interference should be banned because sometimes ministers needed to interfere to stop what he implied was wrongdoing or corruption on the part of civil servants.

He said he had interfered on a number of contracts when he was a minister, claiming that he had done so in order to save public money and stop payments being made when they should not be made, and suggested there were two sides to political involvement in government contracts.

McLean said he believed that ministers have a responsibility to make sure contracts are fair and provide value for money, so not only should they not be prevented from interfering but they had a duty to interfere. The member for East End further suggested that one of the new committee members should be nominated by the opposition leader.

As he closed the debate on the law, Archer said he would give some consideration to the suggestion from McLean regarding the nomination of a committee member by the opposition and embraced Suckoo’s suggestion of workshops for local businesses, before the bill was put to the vote for its second reading.

See the draft Procurement Bill in the CNS Library