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Copyright ©2014 Parliament of the Co-operative Republic of Guyana.

Procurement (Amendment) Bill 2013 – Bill no. 17/2013

Hits: 1558 | Published Date: 19 Dec, 2013
| Speech delivered at: 66th Sitting - Tenth Parliament
| Speech Delivered by : Hon. Jaipaul Sharma, MP

PROCUREMENT (AMENDMENT) BILL 2013 – BILL NO. 17/2013 – Dec 19, 2013
Mr. Sharma: As I make my contribution towards this Procurement (Amendment) Bill 2013, Bill No. 17/2013, I would like to make the observation from the presentation of the previous speaker, and that is to say, that the problem we have in Guyana, and maybe in the National Assembly, is that we apparently know more about laws and regulations of foreign countries more than we know about our own. I say so because in the countries, which the previous speaker referred to, yes, the Minister may have overwhelming power and authority, there is accountability. Even in Canada, when the Auditor General presents a report that report is used to remove Ministers.
In Guyana, we do not have that same situation. In Guyana, Ministers are promoted, maybe they were a junior Minister and then they become a senior Minister or maybe they get two ministries to handle. That is the situation.
Being a Member of this honourable House, I do not know what the big fuss is, about the establishment of the Public Procurement Commission or the removal, in this case, of an amendment to section 54(6) of the Procurement Act.
The Government, with the establishment of the Public Procurement Commission, will still remain large and in charge. It does not have any fear. This is basically the fact of the matter. The Government has always held executive jurisdiction for the award of public contracts and this is how it should be. I am not disputing that. Even when the appointment of the Public Procurement Commission is in place the Government, through NPTAB, remains responsible for the administration of the entire procurement system. I do not see the fear.
The legislation provides for the NPTAB to be appointed - as we heard from various speakers - by the Minister of Finance and not by the Procurement Commission. The NPTAB is a body of the executive arm of the state and is responsible to that arm.  What is the problem? I do not know what the problem is and that is what we have to discuss here.
The major problem in the country is the interpretation of our laws and our Constitution and again I am going to venture...  Mr. Speaker, I will need your ears into this particular matter because it is going to be a bit complicated for me to explain exactly what happens.
Mr. Speaker: I will do my best. Go ahead Mr. Sharma.
Mr. Sharma: What we fail to look at in this Assembly is, what many the speakers from the Government side,... I believe they know but they are hiding it. They are living in the past and I have the evidence to back up that they are, indeed, living in the past.
I think the Hon. Minister of Finance alluded that this side of the House does not read and research. I am going to show evidence that the People’s Progressive Party (PPP) administration is living in the past because the Members are redoing the wrong Act. I guess I have your attention there Mr. Speaker.
Mr. Speaker, you may be aware - I was not in this House, there were Members in this House -   that the Members of this House, in 2002, passed a Procurement Act. That Act was Act 6 of 2002. I do not know if you recall that that Act was passed in this House and it was assented by the then President of this country, if I could mention that, within a number of days. Maybe, it was the next day, I cannot recall, but it could be checked. That is the Act I am referring to when I said that the PPP is living in the past because the PPP is living by Act 6 of 2002 and not the current Act that we are seeking to amend.
The problem here, which I identified to you, is that Act 6 of 2002 spoke about the same areas that were amended in Procurement Act 2003. It is very important to note that this is where the problem of interpretation arises and the PPP is stuck in the past because nowhere in the new Procurement Act speaks about no objection. Then you will ask where the question of objection comes into play. It came into play in the Act of 2002.
Let me read for you, Mr. Speaker, section 63(1) of the Procurement Act. It states, “The Cabinet may issue no objection to a proposed award.” Do you hear the language there? This is very important. How does this transcend itself to this Act that we are looking at? It has never. Let me tell you what happened.
In 1996, when Dr. Cheddi Jagan was alive, the PPP was in the process of creating a Procurement Act. It was not thinking about an amendment to the Constitution as yet. In 1996 the United Nations Development Programme (UNDP) had given the Government funds to strengthen the secretariat and it was followed by the Inter-American Development Bank (IDB) which gives this Government a set of money to carry out amendments to the Procurement Act. That was how this Act of 2002 came into being. When it gave the money it hired a lot of lawyers from overseas and they did a lot of work. This Act could not reach the Parliament because of the 1997 Elections and all of the problems there were. That is how the reform to the Constitution overtook the procurement process.
This Act was in the making. At that time when this Act was tabled and debated in this House... The question is why Mr. President rushed through this Act. You know the history of assenting to Bill, Mr. Speaker, but this particular Act, which I am holding in my hands, was linked to a World Bank recommendation. The World Bank requested that the Government carries out serious reforms to the procurement process. Why? It was because it looked at the Auditor General Reports from 1992 and onwards. The Auditor General, in those days, recommended amendments to the country’s Procurement Act. The World Bank, apparently... The records will show that the pressure was put on the administration to carry out reforms.
This is where it becomes interested. This Act was assented to by the President, a number of days, after it was passed by this House. The World Bank, after looking at this piece of documentation, the 2002 Act, said that it wanted to amend it further. This Act was assented to by the President on the 28th June 2002.  The complete Act was repealed. [Interruption from the Government Members.]
Mr. Speaker: Hon. Members, unless there is a specific point of objection on the floor please allow the Member to continue speaking. Mr Sharma, do not allowed yourself to be distracted, just speak.
Mr. Ali: Mr. Speaker, with your indulgence, I am asking the Member to quote the recommendation he was referring to and the report. Thank you.
Mr. Speaker: Hon. Minister, Mr. Sharma was making a point of a general nature, that there was a reform of the financial architecture upon recommendations of the United Nations (UN) and he said the recommendation was made to upgrade the Act.
Mr. Sharma, are you in a position at some point in time to supply that information?
Mr. Sharma: Mr. Speaker, I will give the Hon. Member and the media an area in which they could probably go and...
Mr. Speaker: I will take your word if you say to me that you will be in a position to provide it if not instantly, later on, that is good enough for me. There is nothing to be withdrawn. There is nothing here that is contentious or in any way offensive to any Standing Order.
Mr. Sharma: Mr. Speaker, I am quoting from His Excellency, the former President of this country, in an interview that he had given to...
Mr. Speaker: If you are going to be that specific you will have to provide, at some point in time, the reference, but if, not let us move on.
Mr. Sharma: It is the President who made reference to this. It is not me.
Mr. Speaker: You will have to provide it at some time if you are relying on it.
Mr. Sharma: I will give you the information now. It is from Guyana Information Agency (GINA), June 28, 2003. It was a report titled, “World Bank support new procurement legislation” and President Jagdeo said these words...
Mr. Speaker: One second Mr. Sharma. Excellent, well done, you may move on. I think you have met the requirement. Move on.
Mr. Sharma: Mr. Speaker, I would like to quote what the president had said, but I am fearful that you would not allow me.
Mr. Speaker: The Standing Orders pertains to current presidents, not past presidents, so you may go ahead.
Mr. Sharma: The then Mr. President...
Mr. Speaker: Mr. Sharma, have a seat. Hon. Members, Mr. Sharma has a unique style. If I may say so Mr. Sharma, there are attempts and tactics being used to get you to move from your style. That is part of parliamentary tactics.  That is known. You have to learn to stay focus and to make your delivery the way you intended.  Later on you can quote. You keep on the line and length that you want to go on.
Mr. Sharma: Mr. Speaker, I was only aware that I had to speak to today...
Mr. Speaker: Well, you are doing very well, knowing that you had this late notice.
Mr. Sharma: As I was saying, this particular Bill, which the President then assented to very quickly, the same way it was assented to it was repealed in its entirety. Now I want to draw the same attention to the example to the anti-money laundering piece of legislation, the 2002 legislation, the amendments to that legislation today and to show an example, a correlation between this Bill here, 2002 Bill with the Anti-Money Laundering and Countering the Financing of Terrorism (Amendment) Bill 2013 – Bill No. 12/2013 in which this administration is not serious in what it is doing, what it is producing. This Bill, here, cost a lot of money and within six months it was totally scraped, so that is the point I want to make. The World Bank has a serious problem with it, in 2002 and the Members may want to know the problem. I think we should know the problem. The problem was in relation to the power that the administration had given itself which the World Bank did not want…
Mr. Speaker: If you are going to make reference to the World Bank you will have to supply the references.
Mr. Sharma: Mr. Speaker, if you want me to withdraw that I am going to withdraw it but I want to assure you that there is something seriously happening here because the World Bank objected to it. If you look at the 2000 and the 2003 Acts you will see the area which was adjusted. The area, which the administration adjusted, is that area of no objection. Hear how this has read originally. Act 6 of 2002, section 63 (1) states, “Cabinet may issue a no objection to a proposed approval.” This is one. Section 63 (2) states, “Cabinet may not offer a no objection to an award of procurement…” Here is where it becomes interesting because it lists two examples where Cabinet may say no and that did not come back in the 2003 legislation. That is how the administration gave itself a lot of power. How Cabinet can say no to a contract? “…for a reason of policy the procurement could not proceed.”
Could you imagine the power there? It had to be that the World Bank wanted this to change, which did not come here.  Image the power that it would have given itself. If the Cabinet there had said, for reason of policy, it does not want x, y and z to get the contract it cannot get it, full stop. I know a Minister who likes to say full stop here.
The next reason Cabinet could use to stop the contract is if the supplier or contractor was recommended for an award for the tender by procurement entity manifestly failed to satisfy the objective of the project. Do you understand what this mean, Mr. Speaker, or Members of the House? What does this mean to the layperson? Mr. Speaker, you are lawyer and there are a   number of lawyers here, but to the people I am speaking out there, who are listing to this, have to understand what that means. What basic that means is that Cabinet, if it says that this contractor cannot carry out this work - it is not the expert - he cannot carry out the work. That is it. It is full stop again. What I am trying to show you, Mr. Speaker, is that this did not make its way to the new Act. This old Act speaks about no objection. The Minister read the Procurement Act and used the words “no objection” but now here in clause 54 it speaks about no objection. What clause 54 speaks about? Section 54 (2) try to précis this here. It tries to put in short language.  This is what section 54 (2) was saying in relation to this. This is what it states, “In conducting a review under subsection (1) the Cabinet may object to the award.”
It did not state anything about “no objection”. This idea of the Government using the exact words of “no objection” was in relation to the old, so that is why I am saying that the Members are living in the past.
Now, it is very important. I want to point out that this here speaks… I want the PPP Members over there to listen to me very carefully. The old Act, which was repealed, speaks about a proposed award.  Proposed means it is not awarded as yet. This here speaks about an award. What Cabinet is currently doing is that it is dealing with proposed award and not award. That is the serious breach. I hope they listened to me. When the NPTAB carries it to Cabinet it carries a proposed, not an award. What this new Act is saying is that it an award which is supposed to go, not a proposed award. Further, section 54 (5) supports my argument.  It states, “Cabinet may not object later than 21 days after and award.” What is happening is that since this here came out, this new Procurement Act, the PPP was in breach by living in the past with the old Act because it was dealing with proposed when the new Act speaks about award.
I will go further in trying to say to the Hon. Minister of Finance…, who I worked a number of years with, and, maybe, my ability to stand here and speak on this matter may be due to him.  This here is a next important fact that I want the Members over there to listen to.
Mr. Speaker:  What you just said is that you were taught by the Minister.
Mr. Sharma: Yes.
Mr. Speaker:  Very interesting to learn that.
Mr. Sharma: I do not know if he wants to acknowledge that. Let me now attempt to interpret section 54 (1). It is of the new Procurement Act 2003. Section 54 (1) speaks about this. It states: “Cabinet shall have the right to review…”  I want to stress on the word “review” because this particular section has two reviews. They are review one and review two. This is what apparently the Members over there do not understand when they imposed subsection (6). When subsection (6) states: “Cabinet involvement under this section shall cease…” the word “involvement” means review, but review two, not review one. The Members over there are stuck in thinking of review means taking away the power of Cabinet.
Mr. Speaker: In your argument you said Cabinet will retain the power to…
Mr. Sharma: I did say so.
Mr. Speaker:  Very well.
Mr. Sharma: Now there are two cases of reviews. I do not think the Members did just in presenting the law. The two reviews, which they spoke about, are, one, it is clear here that Cabinet has the ability or it could review all contract in excess of $15 million. That is one of the reviews. But if you go down further, Mr. Speaker, you are going to see the second review and it starts here: “The Cabinet upon it establishment of Procurement Commission shall review annually the Cabinet threshold.” That is the second review. I hope you were lost there Mr. Speaker. When the Members had subsection (6) they were speaking about that review power to review the threshold. That is what has to cease from Cabinet.
Mr. Speaker: Mr. Sharma, if I could. Section 54 (1), you said, could be divided into two. It has two review powers. The first is review of contracts over $15 million and the second is the annual threshold. You are saying that section 54, subsection (6) pertains only to the second review, therefore whether this subsection remains in the Act or not Cabinet will continue to have an oversight review of any contract over $15 million.
Mr. Sharma: You are correct, Mr. Speaker, but I just need to add a few final touches to that.
Mr. Speaker:  I just want you to know I was following what you were saying.
Mr. Sharma: No. You are correct. You are a very good student. Taking away subsection (6) would not do anything, so I do not know why the Hon. Minister is wasting our time here with subsection (6). If he had read it the way it supposes to be read… [Interruption from the Government Members.]  I do not want the Members over there to be too happy because I am going to quiet them just now.
The point, in which you summarised nicely there, Mr. Speaker, I will add to that. Do you remember I spoke of some real serious power in the old Act, well this Act here speaks about the review power of Cabinet and it is not any power; it is powerless. What does it have power to do? This is what it has power to do: “Cabinet may object to an award of procurement contract only of it determines that procurement entity fails to comply with applicable procurement procedures.”
That is no power. Do you know what that means? Procurement has rules and regulations. When a person tender for something he or she has to get compliances and bid security. That is what it reduces Cabinet to. If Cabinet says, “I do not see the Compliance Certificate for National Insurance Scheme (NIS),  Pay As You Earn (PAYE); the man did not submit his bid security of 2% of the contract sum”, that is the power that  it  has; that is no power. That is the reason why I showed you this very large power the Government puts, itself, in this old Act reduces it to nothing, but the PPP still holds to this old Act that it wants this power to review.  Is it to review what?
If per chance the Hon. Minister knows or did not know of the way it was interpreted and he decides to amend this and if that side had the majority still it would have meant nothing. Why Mr. Speaker? You may ask the question - why it would mean nothing? The reason it would mean nothing is because the Procurement Commission has the authority and power to review the threshold value, so the Procurement Commission could say now that the threshold value of Cabinet is going to be $100 million and not $15 million. As it can be seen, it does not have any power. The Procurement Commission could increase the threshold value and cancel out Cabinet. [Interruption]
Mr. Speaker:  Let us allow the Member to speak, please.
Mr. Sharma: I do not see the reason why - this is my second example - there is no reason to trouble this here because the Procurement Commission, when comes into place, will have the second review power and that is to increase the threshold. Now in this 2003 Act it states that Cabinet, in the absence of the Procurement Commission, shall review, it means to increase the threshold value, but since eight years now it has not increased the threshold value. When this was place here it was envisaged for the past eight years that it might be multiplied 15 times by 15, 15 times by 10. I do not know how Cabinet would have increased it but the threshold value would not have been $15 million. This is what has to be taken into consideration. There is no reason to remove this because the Public Procurement Commission could come tomorrow and say the threshold value is going to be an amount so high that it would not reach Cabinet.
Basically, however, the problem here, with the administration, is that the power it was enjoying is going to be removed but it would not remove and go into the Public Procurement Commission because the Public Procurement Commission is only monitoring. It is going to be removed and put into the various levels of tender board, the highest being the national board. That is where the power will lie. The Minister, who has oversight function of the national board, is now fearful that Cabinet cannot say anything because this is what it states in…
Mr. Speaker: Before you read Mr. Sharma, your time is up. You will need an extension to be sought.
Ms. Ally: I move that the Hon. Member be given fifteen minutes to continue his presentation.
Question put, and agreed to.
Mr. Sharma: Mr. Speaker, I do not want to bore you any longer in this Assembly but I am going to close by just quoting what the Act states. The Act states that:
“Cabinet, upon its establishment of the Public Procurement Commission, shall review annually Cabinet’s threshold and review of the procurement with the objective of increasing that threshold over time…”
It was never done.
“…so as to promote…”
This is the important part.
“…the goal of progressively phasing out Cabinet involvement and decentralising the procurement process.”
Subsection (6) cannot be dropped. This one has to be dropped if there is a problem with Cabinet having this power.
Thank you. [Applause]

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Designation: Minister within the Ministry of Finance
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