THE Minister of Transport, Works and Housing Dr Omar Davies has set off a firestorm with his decision to appoint an Independent Oversight Panel, comprising Professor Gordon Shirley, R Danny Williams and Everton McDonald to in effect circumvent the Office of the Contractor General (OCG) and monitor the procurement process of three big investment projects, namely North-South link of Highway 2000, Gordon Cay Container Transshipment Hub and the Fort Augusta Container terminal.

Although all three men on the panel have impeccable reputations one must ask, what are their precise terms of reference? Does this panel supersede the authority of the Office of the Contractor General? Can they both work in tandem? What is its mandate? What was the selection process, and why these three wise men?

When questioned on his decision, Davies defiantly proclaimed that the Contractor General would not be allowed to impede significant and necessary investments vital to the country’s economy.

Davies declared in the House of Representatives on April 24, 2012: “I have no problem in the Contractor General posing his questions and investigating, but I have a bigger obligation to Cabinet to make projects happen, and what we are seeking to do is to discharge that obligation, but also to reassure the public that there is also an independent grouping who, on behalf of the public, will carry that out. So we must shy away from the notion that there is only one person or office that can do that.”

This statement in effect rendered the Office of the Contractor General redundant, and smacks of bombastic hubris reminiscent of King Henry VIII’s declaration that in order to get out of his lawful marriage to Catherine he would create his own church, The Church of England.

Jamaica aims to become a developed nation by 2030. That’s 18 years away, and the country will need to subcribe to greater transparency if it is to get there in the time set. Of equal importance is the need to eradicate corruption and remove the stigma of being a Third World banana republic. This cannot be lost on Davies; who is one of the most seasoned parliamentarians sitting in the House of Representatives today.

It was less than six months ago that his ministry was beset by findings of oversight failures, gross negligence, lack of accountability and profligate spending. All the more reason for the Office of the Contractor General to be vigilant in its work, and to meticulously ensure that all government contracts comply with the proper procedures. Davies is wrong to hold to the perceived wisdom that he is answerable to and has a bigger obligation to Cabinet. It cannot escape him that he must comply with due process and abide by edicts established by Parliament.

The Contractor General Greg Christie has rightfully pointed to the Contractor General Act which outlines his office’s statutory obligations as it pertains to government contracts. The IOP is appointed by the Government and so is already compromised as far as government contracts are concerned. This isn’t too hard to tell. Bearing in mind that this revolves around public corporate entities, it certainly questions whether this latest move on Davies’ part makes the activities of the IOP ultra vires and nullifies the investment projects in question.

Christie has vowed to fight this move by Davies and submit it to the scrutiny of the prevailing law. He has expressed concerns about two of the three projects, namely the North/South Link Project and the Gordon Cay Container Transshipment Hub Project, both of which are the subjects of unsolicited proposals. The North/South Link Project is of paramount importance to the country and has a vital role to play in boosting the economy and linking the tourism meccas with the city. However, it must be executed with the utmost care and must be seen to be especially transparent.

Unsolicited proposals are fraught with complications, and it is not inconceivable that the Government could find itself over a barrel in its haste to get the projects completed expeditiously and cheaply. A great level of probity is undoubtedly needed here.

Earlier this week Greg Christie drew attention to the impending dangers: “At this juncture, it is critical to highlight the fact that the Office of the Contractor General has long documented its position that the concept of the Unsolicited Proposal, which has found its way into the country’s procurement and contract award conventions, should be excised from the Government’s Procurement Guidelines and should not form the Government of Jamaica’s preferred basis for engaging contractors to undertake multimilliondollar investment opportunities or projects.

“The Office of the Contractor General is, and has always been, concerned that the Unsolicited Proposal mechanism is a corruption-enabling device which can be utilised by unscrupulous public officials to direct lucrative multimillion-dollar state contracts to connected, undeserving or desired contractors.

“This can be easily accomplished by influential but corrupt public officials who are willing to clandestinely conspire with a contractor to have the contractor approach the State with what appears to be a ‘unique’ contracting proposal.

“It is the Office of the Contractor General’s considered contention that all such proposals must be tested for propriety, legitimacy, cost-effectiveness, quality, value for money, and competitiveness in the open marketplace.” This statement has particular resonance in light of the fiasco that befell the US$400-million JDIP programme involving China Harbour Engineering Company at the end of last year.

The Auditor General Pamela Monroe-Ellis found flaws in the approach of the ministry that Davies now heads, and questioned whether it had breached its fiduciary duties. She also unearthed deficiencies in the way the National Works Agency went about procuring contracts and more particularly in terms of the selection of the contractor and subcontractors as well as projects. She concluded that while China Harbour subcontracted works valued at just over $12 billion to 15 subcontractors, there was no contractual relationship involving the ministry and the NWA and the subcontractors. The project was marked by a total lack of transparency. Less than six months later, history may well be allowed to repeat itself in the same ministry, involving the same major engineering company, China Harbour Engineering Company. Davies may well be establishing a precedent here that sees government contracts not being subject to the rigorous checks required to ensure greater transparency. The last thing that needs to be clearly confirmed is that government contracts are not the preserve of jobs for the boys.

Before proceeding to form this Independent Oversight Panel, it would have been more prudent for Davies to sit down with the Office of the Contractor General and let it know that these projects are vital to the country’s well-being and ascertain ways which would satisfy the Contractor General as to the best way to proceed and satisfy all concerned. A unilateral decision to subsume the role and intent of the Office of the Contractor General will no doubt lead to the questioning of the validity and process of all government contracts.

The Government has a large majority and therefore an overwhelming mandate, but this does not imply that it can act with impunity, disregarding the need for checks and balances and prevent the spotlight from being placed on the machinations of governmental activity. Davies ought to know by now that you can’t “just run wid it”!

Furthermore, his government colleagues have to date remained silent on the matter. This cannot be good governance when ministers fail to acknowledge both the importance and relevance of due process.

The International Organisation of Supreme Audit Institutions (INTOSAI) operates as an umbrella organisation for the external government audit community.

In its paper, it writes: “Standard setters should be free from undue funding pressures. They should not be dependent on political or corporate largesse and they should not be unduly influenced by special interest groups or significant economic players that want to paint a particular financial picture. However, independence does not mean the absence of accountability. A standard setter must be accountable for the timely maintenance of standards, for transparency in standard setting, and for meeting the public’s needs.

“Stakeholders’ acceptance of the standard-setting process is important. Financial information users must be confident that, when the accounting standards are drafted, input is sought from all stakeholders, including preparers of financial statements, auditors, regulators, and other stakeholders. Ongoing discussion among stakeholders about the various implementation issues they encounter is important. If accounting standards are to have continuing relevance and use, stakeholders need to learn from each others’ experiences, and different points of view must be discussed and dealt with sensibly.”