Why is the Gov't going after the OCG?

Why is the Gov't going after the OCG?


Tuesday, January 22, 2013

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The report that a Public Procurement Stakeholders meeting held on December 7, 2012 arrived at a consensus that the Office of the Contractor General (OCG) is a hindrance to the economic development of Jamaica is most unfortunate.

On the contrary, one of the real hindrances to economic development in this country was the corruption and irregularities in the procurement and licensing system prior to the appointment of Greg Christie as contractor general in 2005.

It is no secret that some international loan agencies were unhappy about the lack of probity in the system of awarding and implementing contracts and were reluctant to make loans for economic development.

Now the Government wants to weaken the OCG by taking away some of its powers to monitor the pre-contract phases of the award of government contracts and give this task to a team of 'oversighters'.

Most contractors have supported this move. The country has to be careful that the matter of the award of government contracts does not return to the open season of corruption and partisanship that dominated the system many years ago.

The OCG is mandated by the Contractor General Act to monitor the award of government contracts, to ensure that they are awarded impartially and on merit, and in circumstances which do not invoke impropriety or irregularity. The OCG, which is commissioned by Parliament, executes its mandate in accordance with the rules and regulations developed by the Government and as it relates to the registration of government contractors.

The requirements and provisions are stipulated by the National Contracts Commission to which the OCG provides technical, administrative and secretarial support. Creating an oversight body under the direct control of Government is a move that could well result in the partisan award of contracts.

There is a reason for the establishment of the OCG as a creature of Parliament beyond the reach of Government. Now the Government wants to change all that. Why ?

There is no need for the Government to establish another body to oversee and monitor contracts at another level. It is true that the process of awarding contracts is slow at present, because of the inadequate staff complement at the OCG.

With a staff of 59, the OCG's jurisdiction covers the activities of about 200 ministries, agencies, departments and statutory corporations. Together they issue more than 600 different categories of licences and permits, and award in excess of 11,000 high-value construction, goods, services and asset divestments each year, valuing an estimated $110 billion.

In a corruption-prone country, the OCG cannot take any chance of letting through any of these contracts without due scrutiny. However, even with the vigilance of the OCG some agencies and contractors beat the system by deliberately overrunning cost on government projects.

Of the 410 construction projects monitored by the OCG on a sustained basis throughout 2011, 15 were affected by cost overruns amounting to $1.2 billion which the OCG said was an exorbitant amount by any standard.

Another way of circumventing the procurement rules is the use of the emergency contractual facility by government bodies to award contracts. By using this methodology, the public bodies bypass the proper procurement procedure and thus may not get value for money.

They may otherwise engage an entity which is not registered with the NCC or which is registered to do projects of a lower grade, and as such are incapable of carrying out the job to the best possible standards.

Contracts which were awarded by public bodies in 2011, using the emergency contracting methodology, amounted to a whopping $4.1 billion. The answer to the delays in the processing of contracts is not to weaken or undermine the OCG but to strengthen it.

In this regard, the OCG has made a number of recommendations to strengthen the Jamaica Public Procurement Regulatory Framework. Among the recommendations are:

* Fast-tracking the development of prescribed regulations for the registration of contractors: The OCG says it is aware that the requisite ingredients have already been settled to a great extent by some key stakeholders, and that there is already a draft of the document. The finalisation of this draft should be given urgent priority attention.

* Improvement of the processing time for contractor registration: The OCG has made several representations to Government for additional staff over the past three years to improve the overall processing time for contractor registration applications since the institution of the 100 per cent Verification Policy. The additional staff required will cost the Government $5,000,000 annually.

* That discussions commence with Fiscal Services Ltd for the development of a web-based system to facilitate the intake and processing of contractors' applications, thereby improving ease of accessibility to all contractors regardless of their geographic locations. Further, a web-based system would improve the overall efficiency of the NCC verification process and also provide tracking and status reports to contractors on demand.

* Review of the existing Contractor Registration Process in an effort to, inter alia, align this to the best industry practice, improve efficiency and transparency and ensure quality of access to all competent and qualified contractors to government procurement opportunities.

* Prescribed maximum timelines for all stages of the procurement process: The OCG says it is concerned that the alleged 'cumbersome nature' of the procurement guidelines has been emphatically argued by many as the primary justification for the extensive delays by procuring public bodies in the award and execution of government contracts.

Contrarily the OCG contends, based on its own analysis, that the principal cause for delays in the procurement process is attributed to the time taken by the public procuring bodies to properly evaluate and secure the requisite approvals. It is in this regard, the OCG says, that the agency deems it prudent to recommend that Government take the necessary steps to impose maximum timelines for the evaluation and approval stages of the procurement process, in an effort to secure efficiency and guard against unnecessary delays.

There is one suggestion I should like to make to the OCG. In going forward it needs to temper its language and apply more finesse to its public statements. Everyone concerned should await the result of the judicial review to define the powers of the OCG in its pre-contract monitoring.

Ken Chaplin is an inductee in the Press Association of Jamaica Journalism Hall of Fame for his long and distinguished service to the field of Journalism.

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