CS still dodging process to award costly contracts

(CNS): Public servants tasked with finding contractors, consultants and vendors to deliver on government policy and projects are still awarding costly public contracts without going through the proper process set down in the law according to the latest report from the office of the auditor general. Millions of dollars of public cash was spent in 2023 by government authorities which didn’t go through an open competitive bid as required under the procurement act for contracts worth $250,000 or more.

Writing in a report reviewing government’s accounts for 2023, Sue Winspear the auditor general said there were several instances of non-compliance with the Procurement Act and Regulations even after she has warned government departments about this in previous reports and the law has been in force now for some six years setting out a clear process about how public money should be spent.

“Some public bodies have procured goods and services without approval from the public procurement committee, while others have directly awarded contracts for procuring goods and services without approved business cases,” she said. “I am disappointed that these issues persist. They must be addressed to ensure that public bodies get value for money when procuring goods and services using public funds.”

Detailing some of the irregularities and circumvention of the legislation Winspear said the Cayman Islands National Attractions Authority (formerly TAB) spent CI$667,000 on a children’s garden at the Botanic Park in the absence of a business case to justify the project. Meanwhile, a contract worth CI$417,000 was awarded to a janitorial company by the education ministry without going through the procurement process and was unable to provide the documentation to support the renewal of a more than half million dollar janitorial contract for John Gray High School.

Of all the ministries expected to know better even the financial services and commerce ministry was unable to provide any new contracts or renewal process to support the spending of some $3.1million on IT contracts since the first one was signed more than 13 years ago. This was documented in Winpear’s 2022 report and staff advised to address the problem which clearly has not been done., The ministry also spent close to another half million dollars on legal services without supporting renewal contracts after the first one was awarded in 2019.

The home affairs ministry also spent around CI$2million on fire trucks and military vehicles for the regiment but did not post details of the award on the procurement site as required. OfReg also signed a deal for an IT contract worth over a quarter of a million dollars without approval from the procurement committee.

Not every potential contract needs to go through the public procurement committee but those valued between CI$100,000 and $250,000 still need to be supported by a business case and processed through the relevant public authorities internal committees. But Winspear said she found numerous instances where neither a business case or a competitive process had been undertaken.

Awarding of contracts without justification, in the absence of a competitive process, conducted behind closed doors leaves the public purse vulnerable. What can be extremely lucrative contracts pave the way for potential corrupt practices. Winspear is by no means the first auditor general to raise concerns about the staggering sums that are awarded without the requisite transparency, justification and demonstration of value for money.

In addition to the legislation a code of conduct covering the expected behaviour of both public officials and suppliers of government goods and services was introduced in 2019 to set the standards that both sides must adhere to when it comes to government procurement.

Under the code civil servants who break it can be fired and suppliers barred from doing business with the government in future. The code is designed to prevent corruption, collusion, bid-rigging or any other anti-competitive activity in the procurement process and also prevents the engagement, directly or indirectly, of political lobbying to influence the process.

However, to date CNS is unaware of any accountability in relation to public servants or vendors being held accountable for breaches of the law or code as documented by Winspear in this and previous reports about the failings surrounding the procurement of services.

CNS Note: An earlier version of this story included the spending of CI$9.5million Cayman Islands Monetary Authority for the fit out of its new offices in Cricket Square without going through the public procurement committee however, since the report was published the auditor general has said this particular contract could be exempt from the usual procurement regulations as it relates to a property lease

See the AG’s report here.