The Procurement Act is being fully implemented during a period of low economic growth and stagnation. Oil production is a shadow (25 per cent) of its high point in 1978, and natural gas is 40 per cent below its peak. Declining foreign reserves and foreign exchange shortages indicate both a weakening energy sector and a private sector that is not growing fast enough to compensate for the energy sector’s weaknesses. Achieving economic growth is challenging absent any upward movement in the price of petrochemicals and other energy exports. Government expenditure needs to be rationalised and prioritised.
Given these realities, the mechanisms introduced by the act are an opportunity to make changes. But there are no shortcuts, no silver bullet that simplifies the adjustments required by the act. The Office of Procurement Regulator (OPR) understands the size of its task, and Section 3 of its handbook entitled “Training Standards Competence Levels and Certification Requirements” Version 1, published in 2020, identifies the gaps between the act’s requirements and the current state of readiness. The information presented in the report is based on data and statistics obtained from stakeholder engagements, the findings of a capacity assessment report, and the Auditor General’s 2019 Report.
It identifies the historical issues as poor data collection and reporting, the absence of a central electronic public information system, lack of a national registry, multiplicity in the tendering process, and a “shortage of trained procurement staff in public bodies.” The Auditor General’s 2019 report is worse. It noted poor internal controls, non-adherence to financial and regulatory guidelines, poor document management systems, weak asset management, limited human resources, and inadequate segregation of duties. The report also noted a lack of coordination between ministries and no provision for business continuity in a disaster.
To address these deficiencies, the OPR surveyed attendees at capacity-building workshops to assess capacity levels. The information was used to assess capacity gaps in public bodies among those officers charged with the responsibility for public procurement. The survey results and the percentages quoted refer only to those who responded. Accordingly, one can infer that if all public bodies responded, the results could be much worse. Only 31.3 per cent of the public bodies that responded had staff with the necessary theoretical knowledge and analytical skills required to adequately perform this critical function.
Further, the survey revealed a significant deficiency in the skill levels of officers charged with the responsibility for procurement. The handbook concluded that this was evidence of the limited importance placed on these roles in public bodies and highlighted the need for “appropriate qualifications and skills to make a strategic impact.”
In addition, 77 per cent of those designated as “procurement officers” lacked decision-making authority in the procurement and disposal process. This means that those charged with procurement responsibility have limited scope to ensure that the process accords with the act and its regulations. Yet the act makes these procurement officers liable for wrongdoing or failure in the procurement process.
Following this evaluation, the OPR set training standards, competence levels, and training requirements for procurement officers. The standard is structured in three parts and defines the skill sets and training required at each level. In addition to the standards, a Readiness Assessment Checklist was developed to guide public bodies in the convergence exercise to comply with the requirements of the act. This includes the development of a code of conduct to guide both procurement officers within the public bodies and the contractor and supplier with whom they must interact.
The readiness document recognises that certification requirements must be matched by improvements in internal control, without which procurement changes would be ineffective. It also recognises the need for compensating modifications to the organisational structure to incorporate these changes. The foregoing requires phased planning and implementation. These changes also call for training and system improvements, which would also require a different level of expenditure and process to manage those changes.
The takeaway from the foregoing is that there are significant deficiencies in the way public bodies (government ministries, state enterprises, et al) are currently structured. In short, when there are complaints of corruption, they are also due to systemic errors. For example, the current “war” with the Auditor General is due to a significant systemic weakness that the Finance Minister has attempted to pass off as a computer glitch and signals weak controls that failed to detect the error for a significant time.
The Procurement Act must be viewed primarily as a critical step in improving the functioning of public bodies by addressing the underlying systemic weaknesses. The difficulty is making it work. A former minister commenting on last week’s column noted, “I wonder if we can and are willing to pay for all the things we say we need. Where is the money to come from? We have to establish priorities and accept that we can’t get all we want.” Such choices are necessary but never easy. If the country wants good roads, schools and improved public service delivery, then those choices must be made, explained, owned and financed by the public purse. Change requires leadership to initiate and drive the process and management to ensure it works, continuously.
Mariano Browne is the Chief Executive Officer of the UWI Arthur Lok Jack Global School of Business.
