Comments on the Trinidad and Tobago’s Public Procurement and Disposal Of Public Property Bill, 2014

NB – This post reviews the Bill that was first tabled.  See also the blog entitled, Remaining Concerns with the Public Procurement and Disposal of Public Property Bill No 2 of 2014.  Remaining concerns  discusses the Bill as amended in the Senate. The Public Procurement and Disposal of Public Property Bill in its present form does not address many of the problems with the existing procurement system in Trinidad and Tobago and in fact poses more questions than answers. In doing this assessment, the key documents being used will be:

1. The White paper on the reform of the Public Sector Procurement Regime
2. The explanatory notes to the Bill    
3. Procurement_Bill_2014_29.01.14[1]

The Procurement Principles

The procurement bill 2014 was to reflect the reform recommendations of the White Paper that chose the Principle Procurement Model guided by the following procurement principles:

Value for Money This is not necessarily the lowest price, but rather the achievement of the best combination of price and quality to meet the particular needs of the client in the shortest possible time.

Transparency This requires that information regarding the procurement process must be in the public domain, where suppliers of goods and services have full access to information on procurement opportunities, requirements, rules, decision making criteria, and bids are opened publicly and award decisions are published.

Accountability –This is achieved where officials of procuring agencies are clearly identifiable as are their responsibilities. They must be held directly accountable within the framework of ministerial responsibility to Government, Parliament and the Public at large. To be addressed in the reform was one of the main deficiencies of the existing system of procurement being the fact that there were many procuring agencies and many types of procurement were outside of the ambit of the Central Tenders Board, the agency then responsible for award of contracts and disposal of government assets.  The Bill mentions the procurement principles in the introduction but they are not properly reflected in the body of the bill. CONCERNS 1The fact that the issue of “public money” is not adhered to in the Bill because of the exclusion of certain procurements from the bill- Clause 7 Concept of Public Money In order to avoid the situation of agencies and or types of procurements being outside of the purview of the Regulator, the person in charge of this new system of procurement and to protect the public purse from abuse, the concept of Public Money was developed.

• The term “Public Money”, is defined as including money received by a public body regardless of source, or money received by a non-public body from a public body.

• The legal framework was to embrace expenditure by – (a) a public organization for a public or private purpose; or (b) a private organization for a public purpose regardless of the source or type of funding where it can be reasonably inferred that the State is ultimately liable.

[box]The Bill does not make use of the concept of value for money.  It is listed in the definitions but is not used as more than 50% of the procurements being done presently is excluded by Clause 7 from the purview of the proposed Regulator  and does not fall under the ambit of the Act[/box] It is to be noted that: Public Money definition will cover not only government ministries and its agencies but organizations such as Non Government organizations, Community based organizations and Faith Based Organizations who receive and spend public money.  Nowhere in the Bill are the issues of obtaining transparency, value for money and accountability from these types of organizations handled.  Two related issues include – what are the controls to be tied to these agencies that continue to spend much government money, be it for homes for abused women, to assist in alleviating poverty in a community, etc. and how can they be prepared to operate in a system that will make demands on them to improve the efficiency and effectiveness of their operations. 2  – removal of billions of dollars of procurements from the purview of the Regulator and outside of the requirements in bill- Clause 7  of the Bill States: –  Non-application of the Bill This Act does not apply to the procurement of goods, works or services arising out of – (a)     a treaty or other form of agreement to which Trinidad and Tobago is a party with one or more other States; (b)     an agreement entered into by Trinidad and Tobago with an international financing institution; (c)     an agreement with CARICOM; or (d)    an agreement for technical or other cooperation between the Government of Trinidad and Tobago and the Government of a foreign State, where the treaty or agreement provides for rules or regulations regarding the procurement of goods or services. THE ABOVE IS HOW THE BIG MONEY IN PROCUREMENT IS SPENT.   There is no rationale for these exclusions PDF-Questions re exclusions from 2014 Procurement Bill.  In addition, the more important question is   Who is to have oversight over the above procurements?  Other issues  A –  the possible impact of these exclusions on people’s perception of the procurement processes of government relative to issues of  transparency, accountability and fair practices. B  Implications of clause 8 of the Bill that states  that this Bill binds the State. Can this be interpreted to mean that the State is also bound to abide by  the exclusions to the extent that if there is a problem with them it cannot take action to investigate and even stop a procurement.  What a question! 3  The Weak qualifications and experience required for the position of Regulator The Bill – Clause 10 States the Procurement Regulator (hereinafter referred to as “the Regulator”), who shall (i) possess a degree from an accredited University in a field relating to finance, economics or law or a degree from an accredited University in accounting or equivalent professional qualifications in accounting; and (ii)  have at least ten years’ experience in matters relating to procurement,  and who shall be the Chairman; As stated, it can be a first Degree.  This person is taking on the mammoth task of managing the country’s procurement and does not need to have procurement qualifications. Why the emphasis on Accounting?  The experience mentioned in the Bill can be met by officers in any of the country’s government offices. The qualification allows for a very junior officer to qualify for the position. The Regulator has to ensure all rules and regulations re procurement are put in place among other things.   This person needs to be a procurement specialist.   The statement at (g) – a member with qualifications and experience in any other field relating to procurement- is misleading as it is the only time that the word procurement is mentioned in the qualification of any member of the team including the Chairman.  See PDF-PROPOSED FUNCTIONS OF REGULATOR 4 The low priority given in the job duties of the Regulator to the actual work of monitoring the system and the absence of direct statements on the Authority he/she will have for enforcing compliance by agencies if required Clause 13  – outlines twenty (20) duties to the office of the Regulator.  More than 75% is concerned with putting systems in place, a lot of paper pushing.  The operationalization of the new system can take years in setting up during which time the Regulator may not be in a position to positively impact the serious problems being experienced NOW in procurement.   Procurement has the following main areas.

1. The design
2. The process of contracting and award of contract
3. The implementation of the contract- inclusive of the monitoring and controlling of procurement
4. Closure and evaluation
6. In the full list of duties it is not clear what the Regulator’s role will be in the above. This new system was to handle all four areas.  Apart from putting in place systems, who and how is the oversight of the procurement system to be done?  One of the complaints with the present system is that the CTB has no direct involvement in the design of the terms of Reference (TOR ), nor the preparation of Requests For Proposal (RFPs), nor the monitoring or the execution of the contract.  

The role of the Regulator envisaged in the white paper on Public Procurement was to be responsible for monitoring and auditing the procurement process in all State Agencies spending public monies, as well as those spending private monies for public purposes. (e.g. BOLT, BOOT, DFC Projects). Of the twenty duties only in two areas were any direct involvement with the process suggested and they are:

• G – audit and review the system of procurement and disposal of public property to ensure compliance with the objectives of the Act;
• M –  investigate, on its own initiative or upon complaint from any party involved in public procurement or disposal of public property or any member of the public, any alleged or suspected breach of this Act;

The role of the Regulator is not clearly defined vis a vis the role of the procurement agencies.  The Act has to deal with the authority to do and to interact with especially in the event that there is resistance by the government agencies and /or individuals who spend public money. The above therefore does not suggest how one to four of the procurement cycle is to be handled, the oversight of the whole procurement system was the whole intent of the reform and the Act does not deal with any issues re BOLT, BOOT, DFC Projects). 5 The issue of Authority of the Regulator.  The Bill states that:

1.           In the performance of its functions, the Office may –

(a)        monitor the procurement of goods, works and services, and the disposal of public property, by public bodies to ensure compliance with this Act;

(b)        conduct audits and periodic inspections of public bodies to ensure compliance with this Act; and

(c)        carry out such other activities as it considers necessary.

is the above adequate to get cooperation and force changes by organizations/government agencies that may be accustomed to do things their way? 6 Re procurement principles -The issue of transparency and the procurement website- it does not go far enough There is to be a website that is to carry forthcoming procurements- Clause 28.  This is one of the major measures to address the issue of transparency.  The United Kingdom has a procurement website that is more relevant to our situation.  The main details of it are outlined below:.   UK Public Procurement New transparency rules The UK Government has identified the need for greater transparency across all government operations. As part of its transparency agenda, the following requirements were introduced for all central government departments (including their agencies), all non-departmental public bodies, NHS bodies and trading funds: • all new central government information, communications and technology (ICT) contracts must be published online; • all new central government tender documents for contracts over £10,000 must be published on a single website made available to the public free of charge; and • all new central government contracts must be published in full. A website named “Contracts Finder” (see www.contractsfinderbusinesslink.gov.uk) was launched in January 2011as the Government’s single platform for providing access to the above public sector procurement-related information.   For Trinidad and Tobago what is absolutely necessary is the inclusion online of the details of government’s contracts and information about their implementation re disbursements etc.  This is the peoples’ money and so cannot be deemed to be of a confidential nature.  It will aid transparency, one of the procurement principles of the reform measures. Presently audits cannot be done without the files and once a matter is being investigated important documents or the file can go missing.  Often the persons being investigated are the ones who are in a position to remove sensitive documents. Online contract implementation information can be available to only a few persons who can be authorized to access it.  It will allow for an audit to start in the absence of the files.  The Act however will have to make provisions for this type of disclosure.  It can also allow for information of a sensitive nature e.g.  trade secrets to be withheld.   7-The issue of the disposal of government assets- clause 54 The Central Tenders Board had a role to dispose of surplus or unserviceable articles and real estate property belonging to the Government of Trinidad and Tobago or any of the Statutory Bodies.  The CTB Act— states that “articles” means all goods, materials, stores, vehicles, machinery,equipment and things of all kinds.  The more comprehensive listing is disposal of public assets including lands, building, intellectual property rights and other assets, real and financial, fixed and moveable, owned or managed by the stage or State agencies either by sale, lease, concession or license. The role of CTB is being replaced by the Regulator that has only a role to dispose of stores and equipment.  Who is overseeing properly disposal?  This and other types of disposal e.g vehicles, machinery,etc. need to be addressed. 8 The issue of measures to assist the small business sector to obtain government contracts  Clause 30 states that a procuring entity shall ensure that suppliers and contractors

• (d)    have fulfilled their obligations to pay all required taxes and contributions in Trinidad and Tobago;
• (e)    have the necessary professional and technical qualifications and competence, financial resources, equipment and other physical facilities, managerial capability, reliability, experience and personnel to perform the procurement contract; and

This is a Bill for ALL procurement. Enshrined in the Bill, does this exclude small business persons, who may not rigidly full fill these requirements.  Even though it is a desired state the reality is that many small business persons may not be up to this level.  Also what is all paid?  Does that include the current year?  There should be measures to deal with the small business sector as is done in other jurisdictions.  A proposal on Set asides for the sector was developed by the Ministry of Trade  and there should be provisions that will allow for an agency input re supervision of the process and improving the performance/operations of our small business persons. 9 The issue of the procurement method The suggested method is tendering – Clause 31. The reality is that we are still planning and implementing procurements using BOLT, BOOT, DFC Projects.  It is quite possible that such procurements will increase while those using the tendering process will decrease.  Where are the measures to deal with these types of procurements.  Such arrangements are “spenders” of public money as the State has to meet the final costs.  10 What measures are there in the Bill to ensure prosecution of those who are in collusion and other associated procurement violations Clause 47 states that no person shall withhold, conceal, destroy or refuse to produce any book, record or document required for the purpose of an examination or investigation under this Act-  The issue of penalties generally has to be revisited.  Both in terms of non compliance and touching the issue of who is to be held accountable given the many persons involved in a single transaction in the public service, the fact that the procurement persons know about only procurement and often recommendations e.g further disbursements on a construction project, are make with technical input, etc. Yes the Permanent Secretary’s are ultimately responsible but we have to go beyond that.   One also has to take on board problems presently experienced in the courts e.g what comprises a public entity.  Even now the courts have had in some cases a problem with the definition of public body and so such matters should be followed up i.e has a legal input been requested to ensure that matters bought before the courts arising from the terms of this Act can be effectively prosecuted.  Another issue is will the court enforce the penalties in this act for e.g withholding information especially if there are reasons put forward and what of issues of natural justice. Should we be more clinical in our write up of fines etc. Are we clear in the terminology and fair in our recommendations. 10  Other issues a  Even though Clause 48 gives some measure of protection to informants there needs to be supporting whistle blowing legislation to make the system work. We also need to look at the issue of the difficulty of convictions for fraud and the possible use of Inland Revenue Department more in the fight to stop corruption. One cannot examine procurement legislation without thinking about the possibility of conviction.  Notwithstanding the above we have to recognize that it is very difficult to convict persons on fraud charges and we should use the Al Capone model.  He was caught on tax issues and so we have to put in place the mechanism for a more active role of the Inland Revenue Department in the fight against corruption re procurement of goods and services.  Most court cases will go on for years but taxes have to do with proof of income and proof of paying taxes. b  The underlying philosophy of the reform is that once a body is spending public money it is obliged to seek Value for Money which by definition involves efficient and effective delivery of the property or services for which the money is spent.  I did not see much reference in the Bill with respect to issues of value for money. c The reform had proposed a national advisory council that will be made up of representatives of public and private sector, as well as civil society, organizations.    The Council will advise the Regulator in the development of procurement guidelines, procedures and handbooks. With the Regulator, it will also have an oversight and monitoring role.  This critical role that was not articulated in the act. d  I close endorsing the PSCS group’s position on the five indispensable elements of an effective Public Procurement system as featured in the Trinidad Express   – the five indispensable elements of an effective Public Procurement system are: 

• 1. use of public money as the cornerstone of any public procurement process;
• 2. definition of procuring agency encapsulating any organizations responsible for transactions in public money; 
• 3. Effective independence for both Regulator and grievance resolution; 
• 4. Value for money linked to performance/efficient use of Public Money; and 
• 5. Embedded participation of civil society to maintain the integrity of the procurement system. On a matter of this utmost public importance, any government must publish its draft Bill for public consultation. Public procurement reform is far too important to our nation’s development for the usual secrecy and dishonesty to prevail. 

See updated comments on the bill as amended in the Senate

See Are you ready for the Full implementation of the Public Procurement and Disposal of Public Property Act 2015 and its amendments

This gives public bodies and users of public money  tips to enable them to get ready for the Acts full implementation and it was done in June 2022.