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'Bolster' Bidder Disclosure For Govt Contracts Amid Woes

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Investigators have called for the draft Public Procurement Bill to "be bolstered" on payment approvals and bidder disclosure following exposure of the Ministry of Finance's contract woes.

FTI Consulting, which probed the ministry's computer supply and apartment rental deals, said its "significant compliance challenges" in the absence of documented procedures and guidelines meant the proposed legislation should needed to be further strengthened.

While agreeing that the draft bill "would bring substantial improvement to the current regulatory landscape" relating to procurement, the Bahamian accounting and advisory firm said the deficiencies uncovered were so profound that its legal requirements needed to become tighter and deeper to protect taxpayer "value for money".

Noting that the Ministry of Finance had been unable to produce any written procurement policies during its investigations, FTI Consulting confirmed that the former treasurer and several other officials had confirmed the non-existence of any documented guidance.

"Eugenia Cartwright, a long-time civil servant currently employed as deputy financial secretary at the Ministry of Finance, confirmed that the Ministry of Finance has no comprehensive internal written policies, procedures or compliance manuals governing when and how tendering should occur or the approval process for vendor payments," the FTI Consulting report found.

It suggested that a written procurement compliance manual, and other documented policies and procedures, could have addressed the issues raised by the Ministry of Finance's questionable lease and computer supply contracts, while "fostering an environment of greater accountability".

FTI Consulting, investigating the Ministry's procurement processes and contract awards on the Auditor General's behalf, found that neither of the two companies involved in supplying $1.46m worth of computer equipment, and arranging the lease of three apartments, had a proven track record in these respective fields.

Xua Company Ltd, the computer supplier controlled by Island Game web shop boss, Pete Deveaux, and the Bahamas Striping Group affiliate that executed the leases, were incorporated specifically to handle these deals and had none of the permits normally required by the Ministry of Finance for doing business with private companies.

The Bahamas Striping Group of Companies yesterday declined to comment on the report's findings, while Tribune Business sources said Mr Deveaux was in China. He did not respond to messages from this newspaper seeking comment.

FTI Consulting had said its findings raised "concerns" over whether Bahamian taxpayers received "value for money" from both deals, as neither contract was put out to competitive bidding. The reports also confirmed that the Government's Tenders Board is routinely bypassed in the awarding of contracts that should go before it.

Noting that the proposed procurement legislation is similar to the Financial Administration and Audit (Amendment ) Bill of 2013, which was never enacted by the former Christie administration, FTI Consulting said it creates a Public Procurement Department that will be responsible for developing - and updating - a procurement manual used by all government agencies.

"Such an important responsibility could be bolstered by specificity in the draft Bill regarding the timeframe in which the Public Procurement Department would be required to draft and implement an initial version of the procurement manual and the minimum frequency with which the manual must be updated," FTI Consulting urged.

"Furthermore, the draft Bill might also be bolstered with additional specificity concerning the contents of the procurement manual. While the draft Bill addresses the need to obtain information on the ultimate beneficial ownership of each bidder, it could also require that the procurement manual addresses the minimum and specific disclosure requirements for the bidder.

"For example, the procurement manual could be mandated to include specific disclosure requirements regarding the 'business reputation and personnel' of the bidders."

FTI Consulting added that the apartment rental contract, involving Atillio Holdings, a Bahamas Striping affiliate, also suffered from "a significant lack of documentation and clarity" around the approval of payments on the lease.

"The draft Bill might also benefit from addressing the payment approval process and requirements for the Public Procurement Department and for the procurement unit of each agency," its report recommended.

"For example, sections 15-16 of the draft Bill describe the procurement units and their functions, but do not specifically address roles and responsibilities surrounding payment approvals and processing."

However, the Bill's requirement for government agencies to document why contracts were not put out to competitive bid was welcomed by FTI Consulting, which said it might have achieved "greater accountability and transparency" over the apartment leases with Atillio Holdings.

"The draft Bill appears to successfully address the need to document instances in which competitive bidding is eschewed in favour of some other method," the report added. "It states that 'every procuring entity shall prepare a procurement plan in writing for each individual procurement requirement', and this plan must include 'a justification for the use of any method other than competitive bidding."

Comments

Economist 1 year, 4 months ago

Good points but let's see if the Government got the integrity to do it.

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