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New law proposed to control government procurement PDF  | Print |  E-mail
Friday, 07 September 2012 12:47

Poorly controlled letting of government contracts that failed to hold contractors accountable and included huge government penalties for renegotiation will be brought under the supervision of a new contract management cell, the governor announced Sept. 5.

“It is clear that too many contractual decisions were taken in the past that did not sufficiently take into account the future longer term needs of the taxpayer,” government CEO Patrick Boyle said in a press statement announcing the proposed Public Procurement Bill.

“It was not right that some development agreements, for example, were signed for immediate short term gain, often for a duration of decades without any opportunity for renegotiation or sharing of success as that business grew. These days, procurement is a specialist role, and this proposed law will make sure that this skill set is included at the heart of all future public sector commercial contracts.”

The bill would require all public servants in the Turks and Caicos Islands to declare in writing their interest in any entity that does or could provide government with any goods or services. Conflicts of interest discovered after the awarding of a contract could void a contract and result in disciplinary action or criminal prosecution.

The bill will be considered by the Consultative Forum, but the press statement says the bill will be made law before elections in November as it is one of the milestones designed to protect the public sector and its finances.

Among the proposed improvements are:

  • Creation of a central contract management cell led by a Director of Contracts to oversee the process and provide advice as required
  • Introduction of disciplinary and legal processes where elected members and/or public servants deliberately circumvent the provisions of the ordinance
  • The intentional splitting of a large procurement requirement into smaller lots to get round bidding requirements is a new offence
  • Achieving value for money and encouraging competition are always to be prime considerations before procurement is undertaken
  • Introduction of reporting arrangements relating to contracts for capital projects with a lifetime value above that set by the Permanent Secretary Finance and all other contracts/amendments above the reporting threshold set by the Permanent Secretary Finance via the Gazette and/or government website to provide transparent information to the general public

The statement said previous governments, “particularly during the period 2005-09, negotiated poorly and mismanaged several important contracts.”
Some have criticized the government’s contract with Interhealth Canada to manage the country’s two medical centres, but that was not mentioned in the statement.
Some examples of problems with previous contracts included:

  • Contracts were entered into for exceptionally long periods with little or no financial benefit for the people of the TCI with little or no opportunity to renegotiate or end the contracts without severe financial penalty to the public purse.
  • There was no transfer of risk to the contractor either in terms of their expected performance or financial penalties for poor performance.
  • Negotiations were often led by the proposed contractor, and once a contract was signed, continuing contract monitoring is generally poor or more often nonexistent.
  • There have been instances where financial guarantees requested by proposed contractors have been agreed at the end of the evaluation of tender phase without Ministry of Finance knowledge or approval.
  • It is apparent that government procurement was so poorly coordinated and it is very unlikely that value for money is being achieved.

“Ensuring that public money is spent wisely and for the benefit of the taxpayers of the Turks and Caicos Islands is critical to the reforms that we are implementing to assist the incoming locally elected government with achieving better value for money in future procurements,” Boyle said.

Feedback on the proposed legislation should be submitted to This e-mail address is being protected from spambots. You need JavaScript enabled to view it by 5 p.m. Sept. 14.

Click here to read the draft bill

 

 

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