Business

Government procurement procedures are the most modern regionally

Legal Notes

Malene Alleyne

Wednesday, March 07, 2012    

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Government procurement policies and procedures are an important aspect of public financial management. They provide oversight for the expenditure of public funds and create important checks and balances for the powers that be. In fact, the foundations for public financial management and procurement are grounded in our constitution, which sets out the basic principles for efficient management of public resources. For these reasons, public sector procurement is a matter of concern for all Jamaicans, not just those who are directly implicated in the process. It is therefore important to have an appreciation of the content and scope of these procedures as well as an understanding of where these procedures can be found.

Key aspects of public sector procurement are found in the Financial Administration and Audit Act, the Contractor General's Act as well as other Acts and Regulations. Also, Jamaica is a signatory to international treaties that touch and concern public sector procurement.

Under the Contractor-General's Act, the award and implementation of government contracts is monitored by the Contractor-General. A "Government Contract" is defined as including any licence, permit or other concession or authority issued by a public body or agreement entered into by a public body for the carrying out of building or other works or for the supply of any goods or services. "Public Body" is defined under the Contractor-General's Act as a ministry, department or agency of Government; a statutory body or authority; or any company registered under the Companies Act, being a company in which the Government or an agency of Government, whether by the holding of shares or by other financial input, is in a position to influence the policy of the company.

The Contractor-General is responsible for monitoring the award and implementation of government contracts and is given wide investigatory powers in this regard. The Contractor-General's Act gives the National Contracts Commission (NCC) the function of examining applications for the award of government contracts, approving and overseeing the award of government contracts and, in the case of contracts above certain limits, making recommendations to the Cabinet regarding the award of such contracts. Contractors are generally required to be registered with the NCC before the award of the contract (in the case of International Competitive Bidding) or before taking part in the bidding process (in the case of Local bidding). The Act also gives the NCC the power to make regulations prescribing qualification criteria for registration and the procedure for the submission of tenders for government contracts.

The Government of Jamaica Handbook of Public Sector Procurement ("Handbook"), issued under the authority of the Ministry of Finance and the NCC, governs public sector procurement. This Handbook is a comprehensive procedures manual with four volumes. Volume 1 covers general provisions relating to public sector procurement procedures; Volume 2 outlines the procedures for the procurement of goods, general services and works; Volume 3 applies to the procurement of consulting services; and Volume 4 speaks to the procurement of general insurance services.

The procedures contained in the various volumes are important not only for public officers engaged in government procurement, but also for contractors. The volumes contain practical user-friendly information that gives a better understanding of the various stages of the procurement process and the duties and obligations of the parties involved. For example, Volume 2 sets out, among other things, the various procurement methods, the eligibility and qualification requirements for contractors, and the procurement process and cycle from start to finish.

In terms of procurement methods, Volume 2 identifies and explains international competitive bidding, local competitive bidding, limited tender, direct contracting and contracting under emergency circumstances. Of particular interest is the method of direct contracting in which only one contractor is invited to participate. This method may only be used in specified circumstances including, for example, where the procurement is of a confidential nature; or where a particular contractor has exclusive or proprietary rights in respect of goods, general services or works.

In terms of requirements, Contractors wishing to participate in public sector procurement opportunities will generally need to provide proof of registration with the NCC as well as a Tax Compliance Certificate. Tax compliance is not a requirement for foreign bidders to participate in procurement opportunities. However, if the contract will be executed in Jamaica, the foreign contractor must obtain a valid Tax Compliance Certificate before the contract award. The same principle applies with respect to registration with the NCC.

A useful flow chart is provided in Volume 2 which sets out how the Procuring Entity will go about the process of procuring goods, works and general services. The Procuring Entity will first conduct a logistical study and group items and related services. A procurement method is then chosen based on the nature of the goods, services and works to be procured, the value of the procurement and the likelihood of interest by foreign bidders. Once a procurement method is chosen, a procurement plan is prepared. Volume 2 provides a template for the procurement plan which contains details such as the description of the item, the procurement method, performance measures and projections for the different phases of the procurement (advertising, submission of bids, bid evaluation and contract award).

Once the plan is prepared, a public advertisement announcing the procurement opportunity is posted. The Procuring Entity will then apply the relevant standard bidding document for the chosen procurement method and implement the applicable procurement procedure. At the end of the process, a contractor is selected and the contract awarded.

The information provided above represents only a fraction of the content and scope of the procedures and policies applicable to public sector procurement. For example, Volume 2 provides further details of how the process is managed from the notification of bid opportunities, the bid opening and evaluation process, and the content of the standard bidding documents. It is no wonder that Jamaica's public sector procurement procedures have been described as the most modern and comprehensive within the region. Jamaicans are encouraged to read the Handbook and familiarise themselves with this impressive corpus of policies and procedures. The Handbook and other relevant documents can be found on Ministry of Finance's website.

Malene Alleyne is an Associate at Myers, Fletcher & Gordon and is a member of the firm's Commercial and Property Department. Malene may be contacted via malene.alleyne@mfg.com.jm or www.myersfletcher.com. This article is for general information purposes only and does not constitute legal advice

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