By NEIL HARTNELL
Tribune Business Editor
The government last night unveiled draft legislation representing a "fundamental reset" of its public procurement processes in a bid to save taxpayers millions and aid small businesses.
Marlon Johnson, the Ministry of Finance's acting financial secretary, told Tribune Business the long-awaited Public Procurement Bill 2019 was designed to produce better "value for money" through improved transparency and accountability surrounding the award of government contracts.
Emphasising that it sought "to discourage any ad hoc approach" to the government's sourcing of goods and services, Mr Johnson said the Bill also seeks to make bidding on such contracts more equitable for Bahamian companies and entrepreneurs.
Besides stipulating that all government agencies must award a minimum 10 percent of their contracts to Bahamian micro, small and medium-sized (MSME) businesses, Mr Johnson said the proposed legislation sets out a process where any aggrieved bidder can appeal a contract award via a newly-created Procurement Award Tribunal.
The draft Bill, which has been released for a 30-day public consultation with interested parties, mandates that all government entities "promptly" publish details of all contract awards, including the name of the winning bidder, the price and "the selection method" used to choose them.
"I think it's a fundamental reset of the approach to procurement," Mr Johnson said of the draft Bill. "Part of the research and development of this Procurement Bill was really to align it with international best practices.
"For us administratively, when you peruse the draft Bill, it involves the creation of a specific Public Procurement Department with the requisite expertise, and to have persons trained in procurement in the significant agencies - the ministries of works, health and education - that typically procure a large volume of goods and services.
"It's a significant administrative change for us to ensure we have people that understand what procurement's about, and how to execute contracts at optimal value, analyse bids and get into the science of procurement. It's a significant management change.... It tries to discourage any ad hoc approach to the procurement of goods and services."
Mr Johnson said the Public Procurement Department, whose mission according to the Bill is to "enhance economy, efficiency, transparency and due process in public procurement and the management of government resources", would be overseen by the Ministry of Finance and "guide" other ministries/agencies in developing their own procurement plans.
Besides setting uniform standards for public sector bidding processes and documents, the Bill also charges the Public Procurement Department with developing and managing the proposed electronic procurement system that the Government intends to create.
This e-procurement system also involves establishing a supplier registry, and the Government yesterday said some 1,500 firms were already registered on its e-tender platform. The Public Procurement Department will also be in charge of "centralised" bidding for goods and services used throughout the public sector, although awards of $10m or must be approved by Cabinet.
Mr Johnson, meanwhile, told Tribune Business there were specific provisions in the Bill to enhance the public sector's transparency and accountability to the Bahamian people by mandating the publication of regular reports on its procurement activities.
"Throughout all of this is the need to keep pristine records," he said. "There are requirements for the publication of awards and the publication of annual reports. It will be incumbent on us as public servants to ensure records are kept to allow for periodic reports and annual reports to keep the public informed of our procurement activities."
While procurement officers were already in place at several ministries, the acting financial secretary said several may need to be "upskilled and retrained" to meet the demands of the new legislation. He added that it represented an opportunity for civil servants to gain promotion as the Government targets "a model approach to procurement".
Government contracts account for a significant percentage of economic activity in small states such as The Bahamas, and can be a valuable tool in encouraging the development and growth of small and medium-sized Bahamian businesses and local ownership if used correctly.
However, public procurement has increasingly become perceived as a murky, closed process that is often subject to arbitrary influences such as the awarding of contracts to family members, political cronies, friends, constituents and such like.
In many instances, under both PLP and FNM governments, this has resulted in contracts failing to be awarded to the best-qualified bidder. The consequences for the Bahamian people are poor value-for-money, inefficiencies and frequent cost overruns that have been a major contributing factor in building the nine-figure annual deficits and $8bn-plus national debt this nation now faces.
While the Public Procurement Bill 2019 is not a cure-all by itself, it seeks to address several concerns and potential flaws in the current set-up, such as setting out the situations in which processes such as selective bidding, restrictive bidding and limited bidding techniques can be used.
It sets out how bids are to be solicited and the criteria for evaluating them, as well as how offers are to be opened - electronically or otherwise - in the presence of all bidders. Bids from multiple entities with the same ownership are barred, and the Bill sets out the process for disqualifying bidders and how to deal with "unsatisfactory bids".
Mr Johnson told Tribune Business that the use of e-tendering, and the electronic supplier registry, would enable the Government to "cast a wide net" in its search for goods and services suppliers.
Arguing that this system will be more equitable, and create a level playing field for all potential bidders on a contract, he added that companies will be able obtain all necessary tender details online.
"It opens up the field to make people aware that these bids are on offer," Mr Johnson said of the e-procurement system. "That alone will help to drive competition and allow more opportunity. It allows better value for money, as there is more potential competition to bid on jobs, and that will optimise price and value."
The Public Procurement Bill's section 42 also mandates that "every procuring entity allocate not less than 10 percent of its overall procurements to MSMEs in accordance with rules issued by" the Public Procurement Department - something that Mr Johnson said was in line with international best practices.
The Government, in a statement, said its planned modernisation of public procurement will enable Bahamians to know who the winners of all contracts are "in a timely and transparent manner".
"The reform of public procurement represents a sea-change in how government conducts business, and the country will benefit as a result, said K Peter Turnquest, deputy prime minister and minister of finance.
"Once again, this government is keeping its promise to ensure greater transparency and accountability in public affairs. Unlike others who only promised procurement reform in the past, the Minnis-led government is actually delivering."
He added: "We already have over 1,500 vendors registered on the e-tender platform. Registration is open and free for all interested vendors. On this platform, all vendors are alerted automatically when there are new opportunities to bid on projects.
"This has already brought an unprecedented level of transparency, for in the past it could be difficult for potential bidders to access information about opportunities. The process will be further strengthened once the final Bill is enacted."