OECS
COUNTRY PROCUREMENT ASSESSMENT REPORT
(Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St. Vincent and the
Grenadines)
VOLUME I. FINDINGS AND RECOMMENDATIONS
VOLUME II. DATA AND ANALYSIS
April 2003
CURRENCY EQUIVALENTS
Currency Unit = East Caribbean Dollar (EC Dollar)
US$1 = 2.70 EC Dollars
ABBREVIATIONS AND ACRONYMS
AO
BOO
BOOT
BOT
CDB
CEO
CSSO
CSTB
CTB
DOA
DTB
EC$
ECDS
FAA
FR
ICR
LCB
LIB
MOCW
MOCWT
MOH
MOW
NBP
NCB
NS
OECS
PAC
PAR
PIU
PMU
PPS
PS
PSR
PTB
Accounting Officer
Build, Own and Operate
Build, Own, Operate and Transfer
Build, Operate and Transfer
Caribbean Development Bank
Chief Executive Officer
Civil Service Staff orders
Central Supplies Tender Board, St. Vincent and the Grenadines.
Central Tender Boards of Dominica, St. Lucia and/or Public Tenders Board of
Grenada and/or Central Supplies Tender Board, St. Vincent and the Grenadines,
Tender Board of St. Kitts
Director of Audit
Departmental Tender Board
East Caribbean Dollars
Eastern Caribbean Drug Service
Finance Act, Dominica, Grenada and/or the Finance Administration Act, St. Lucia,
Finance Act, St. Kitts and Nevis, and Financial and Audit Act, St. Vincent and the
Grenadines.
Financial Regulations
Implementation Completion Reports
Local Competitive Bidding
Limited International Bidding
Ministry of Communication and Works or the Ministry of Communication, Works
and Public Utilities or the Ministry of Communication, Works and Transport
Ministry of Communications, Works and Transport
Ministry of Health
Ministry of Water
No Bribery Pledge
National Competitive Bidding
National Shopping
Organization of Eastern Caribbean States
Public Accounts Committee
Performance Audit Reports
Project Implementation Unit
Project Management Units
Pharmaceutical Procurement Services of the OECS
Permanent Secretary to the Government
Procurement and Stores Regulations
Public Tenders Board, Grenada (designated term for the CTB)
QCBS
RFP
SBD
TA
UK
UNCITRAL
WTO
Quality- and Cost-based Selection Method
Request for Proposals
Standard Bidding Documents
Technical Assistance
United Kingdom
United Nations Committee on International Trade and Laws
World Trade Organization
OECS
COUNTRY PROCUREMENT ASSESSMENT REPORT
VOLUME I. FINDINGS AND RECOMMENDATIONS
Preface
Executive Summary
Summary of Findings: Strengths and Weaknesses of Present Procurement System
1.
Legal and Regulatory Frameworks
A. Existing Legal and Regulatory Framework
B. Findings on the Existing Legal and Regulatory Framework
C. Recommendations on the Legal and Regulatory Framework
(i) Short Term Actions
(ii) Medium Term Actions
1
1
4
5
5
2.
Procedures and Practices
A. Findings on Procurement Planning and Annual Updating of
Procurement Plans
B. Findings on Eligibility and Process
C. Findings on Methods of Procurement
D. Findings on Monitoring and Contract Management
E. Recommendations on Procedures and Practices
(i) Short Term Actions
(ii) Medium Term Actions
8
8
8
10
14
15
15
16
3.
Organization and Resources
17
A. Organizations – Tender Boards, Ministries/Departments, Parastatals and Local
Governments
17
(i) Findings
17
(ii) Recommendations: Short Term Actions
17
(iii) Recommendations: Medium Term Actions
18
B. Resources
19
(i) Findings
19
(ii) Recommendations: Short Term Actions
20
(ii) Recommendations: Medium Term Actions
21
4.
Audit and Anti-Corruption Measures
A. Audit
(i) Findings
(ii) Recommendations: Short Term Action
(ii) Recommendations: Medium Term Action
22
22
22
25
25
B. Anti-Corruption Measures
(i)
Findings
(ii) Recommendations
26
26
28
5.
Performance on Bank-assisted Projects
29
6.
General Risk Assessment
31
7.
Private Sector
A. Commercial Regulations
B. Commercial Practices
32
32
Recommended Action Plan
34
Annex 1: Recommended Action Plan
35
Annex 2: Technical Assistance
38
8.
List of Tables
OECS COUNTRY PROCUREMENT ASSESSMENT REPORT
(Dominica, Grenada, St. Kitts and Nevis, St. Lucia and
St. Vincent and the Grenadines)
PREFACE
Date of the Report:
1.
This report was completed in June 2001, and revised in April 2003.
Basis of the Report
2.
As part of the preparation of the World Bank’s three-year Country Assistance
Strategy (CAS), it was agreed with the Governments of Dominica, Grenada, St. Kitts and
Nevis, St. Lucia and St. Vincent and the Grenadines (hereinafter called the “OECS group”),
that a Country Procurement Assessment Report (CPAR) would be prepared. In consultation
with the Ministries of Finance of the OECS Countries (MOF), the CPAR Mission comprising
of Mr. Vladimir T. Jadrijevic, Senior Procurement Specialist and Task Manager, and Mr.
Narayanaswami Viswanathan, Procurement and Project Management Consultant, visited the
OECS countries from October 18 to 28, 2000 to conduct the procurement review. This was
followed by another visit by Mr. N. Viswanathan to the OECS group from November 20 to
December 12, 2000 to complete the outstanding work in the field.
3.
This report reflects the joint efforts of the OECS group and the Bank, is based on the
work of Mr. Viswanathan, and has been prepared under the general guidance of Messrs.
Armando Araujo (Regional Procurement Advisor) and Vladimir T. Jadrijevic (Task
Manager) of LCOPR. The mission received valuable inputs during the preparation of this
report from many senior government officials including Ambrose V. George, Minister of
Finance and Economic Planning, Dominica, Hon. Anthony Boatswain, Minister of Finance,
Grenada, Hon. Denzil Douglas, Prime Minister and Minister of Finance, St. Kitts and Nevis,
and Messrs /Mesdames. Joseph Banis, Acting Financial Secretary, Dominica, Timothy
Antoine, Acting Permanent Secretary, Ministry of Finance and Chairperson of the Central
Tender Board, Wendell Lawrence, Financial Secretary, St. Kitts and Nevis, Zenith James,
Director of Finance, Ministry of Finance and Chairperson of the Central Tender Board, St.
Lucia, Mr. Maurice Edwards, Director General, Ministry of Finance and Planning and
Chairperson of the Central Tender Board 1and Laura Browne, Director of Planning, Ministry
of Finance and Planning of St. Vincent and the Grenadines and officials of the ministries,
departments and agencies involved in public sector procurement of goods and services. This
report also includes inputs from the OECS Country Team, and Task Team Leaders associated
with ongoing projects in the OECS countries. The report follows the format outlined in the
World Bank’s interim instructions dated June 1, 1998. The list of documents used in
1
For ease of reading, the term “Central Tender Board” or abbreviation “CTB” is used through out this document to refer to the “Public
Tenders Board” (PTB) of Grenada, “Tender Board” of St. Kitts and Nevis and “Central Supplies Tenders Board” (CSTB) of St. Vincent and
the Grenadines.
preparation of this report appears in Annex 1 of Volume II of the CPAR and the list of
persons met in Annex 2 of Volume II of CPAR.
4.
A stand-alone report for Dominica in support of a World Bank’s proposed structural
adjustment operation to that country is currently being prepared. References to Dominica
will be updated in the final draft of the OECS CPAR on the basis of the findings of the standalone Dominica exercise and discussions with that Government, scheduled to be completed
shortly.
Acknowledgements
5.
The mission wishes to acknowledge the extensive cooperation, assistance and
valuable advice received from various government, parastatals, and private sector officials,
contractor representatives and consulting engineers as well as donors. Particular thanks are
due to the Ministries of Finance, the Ministries of Planning, the Ministries of Agriculture, the
Ministries of Communication and Works, the Ministries of Education, the Ministries of
Health, the Ministries of Legal Affairs and/or Attorney General, the Ministries of Local
Government, the Departments of Transport, Office of the Prime Minister, Customs
Departments, the Accountant Generals, the Directors of Audit, etc., the Chamber of Industry
and Commerce, the Association of Consulting Engineers (ACE), the Construction
Contractor’s Association, and the European Union.
OECS EXECUTIVE SUMMARY
Strategy and Objectives of the OECS CPAR
1.
The World Bank’s 2001 Country Assistance Strategy (CAS) for the OECS group1
included a focus on institutional development in the public expenditure management area by
providing for the preparation of a Country Assessment Procurement Report (CPAR), a
Country Financial Accountability Assessment (CFAA), and an Institutional and
Organizational Capacity Review (IOCR). In October 2000, the Bank and the OECS member
countries agreed to the prepare a Country Procurement Assessment Report (CPAR) which
would review public sector procurement systems in the sub-region and include an action plan
for reform formulated in terms of regional approaches. Agreed procurement reform actions
would be part of an integrated regional agenda for comprehensive public sector reform
resulting from the Bank analytical work in the various areas and the ensuing discussions with
the countries.
2.
A separate CPAR is currently being prepared for Dominica, as background work for
the type of World Bank’s financial support and public expenditure management reform
currently envisaged for that country. However, the two reports are fully consistent in their
finding and recommendations. While a number of short-term recommendations can be
implemented independently in each country, both CPARs focus primarily on the benefits of
regional harmonization of procurement policy and the advantages and challenges of joint
public procurement at the regional level for selected goods.
Key Findings and Policy Recommendations
The regulatory framework is outdated and requires substantial revision. Significant gaps in
the framework contribute to distorting practices and the widespread perception that the
system lacks transparency. A sound, harmonized regime for public sector procurement
would unify and strengthen the OECS countries’ position in external trade fora and enhance
regional trade in good and services, and would be consistent with other regional initiatives.
3.
None of the OECS member countries has adopted laws which set forth clear and
comprehensive frameworks for public sector procurement. The Ministry of Finance (MOF)
of each country2 is empowered by the Finance and Audit Act (FAA)3 to regulate
1
In this report, the term “OECS group” refers to Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St.
Vincent and the Grenadines. Antigua and Barbuda, also part of the OECS group is not included in this report
since it is not a borrowing member of the World Bank.
2
Designated as Ministry of Finance and Economic Planning in the Commonwealth of Dominica. Designated as
Ministry of Finance in Grenada, St. Kitts and Nevis and St. Lucia. Designated as the Ministry of Finance and
Planning in St. Vincent and the Grenadines
3
Commonwealth of Dominica: (i) Finance and Audit Act 1965 (act No. 8 of 1965) date of commencement 15
September 1966; Grenada: Finance and Audit Act 1964: and Finance and Audit Amendment Act 1998 (Act No.
25 of 1998); St. Kitts and Nevis: Finance Act 1990 (Act no. 9 of 1990); Saint Lucia: Finance Administration
Act 1997 (Act No. 3 of 1997); and St. Vincent and the Grenadines: Financial and Audit Act 1964.
procurement. MOF issues Financial Regulations (FR) and Procurement and Stores
Regulations (PSR)4. As executive acts, these rules can be easily changed by the Minister of
Finance and do not reflect established government procurement principles and practices.
Existing rules promote selective bidding, excessive discretion in decision making, and do not
address issues and aspects which are key to efficiency, fairness, transparency and
accountability, such as, for example:
•
•
•
•
•
•
•
public bid opening;
qualifications on suppliers and contractors;
award to the lowest evaluated bidder;
bid protests;
debarment of bidders;
disclosure of procurement rules; and
and maintenance of procurement records.
In addition, conditions for use of various procurement methods are not defined and there are
no separate rules for procurement of consulting services.
4.
In general, private sector, civil society, and many public officials perceive public
sector procurement practices as non-transparent. The legal framework does not contain
specific provisions, either in procurement rules or other legal texts, which may faciliate the
identification, prevention and investigation of corrupt or fraudulent procurement practices.
No reference to corrupt practices is included in bidding documents. In addition, there is little
protection of whistleblowers, and no formal mechanism or channel to report instances of
corruption. A sound regulatory framework would help reduce many opportunities for corrupt
practices currently facilitated by gaps and inconsistencies in the system and engender
confidence in the business community and civil society that procurement practices are fair
and transparent. Additional measures designed to prevent and combat corruption should be
incorporated in the overall regulatory framework. These may include, for example, specific
anticorruption legislation which, inter alia, establishes an anti-corruption body, freedom of
information and whistleblower protection legislation, a corruption reporting hot line, and
training for appropriate public officials in forensic auditing and other relevant techniques to
uncover and investigate corruption cases.
4
Commonwealth of Dominica: (i) Financial Regulations 1976 made under Section 16(1) of the Finance and
Audit Act 1965; and (ii) Financial (Stores) Regulations effective 1 November 1980. Grenada: (i) The Financial
Rules, 1998 [First Schedule] and (ii) The Stores Rules 1998 [Second Schedule] of the Finance and Audit
Amendment Act 1998 (Act No. 25 of 1998). St. Kitts and Nevis (i) Financial Instructions 1983 (issued under
Section 53 of the Constitution); and (ii) Stores Rules of St. Christopher and Nevis (effective 19 September
1983). Saint Lucia: (i) Financial Regulations (Statutory Instruments, 1997 No. 36); and (ii) Procurement and
Stores Regulations (Statutory Instruments, 1997 No. 37). St. Vincent and the Grenadines: (i) Financial and
Stores Rules of the Windward Islands 1952; (ii) Manual of Tender Procedures (issued on November 21, 1967 as
Statutory Rules No. 101-114).
5.
The regulatory framework for public sector procurement should be harmonized at the
regional level and cover all relevant principles and procedures as well as institutional and
organizational aspects. The framework should be consistent with ongoing regional efforts to
create a common procurement regime, particularly in the context of CARICOM, the Free
Trade Area of the Americas (FTAA) process, and the establishment of the Caribbean Single
Market and Economy (CSME). In addition, as signatories to the World Trade Organization
(WTO) Agreement, OECS countries have committed themselves to enter into negotiations
leading to the adoption of a multilateral procurement regime. A harmonized procurement
framework would increase procurement efficiency and economies of scale, and substantially
enhance the OECS countries’ negotiating position in all regional as well as plurilateral
external fora, such as the WTO Government Procurement Agreement (GPA).
6.
The Inter-American Development Bank (IADB) recently approved a technical
assistance project to review procurement systems in CARICOM countries (including the
OECS countries reviewed in this CPAR), ensure greater availability of government
procurement statistics for national and regional policy makers, and provide recommendations
on the formulation and implementation of a regional government procurement framework
that would facilitate the establishment of the CSME and help strengthen CARICOM’s
external economic relations. Further synergies between the Bank’s analytical work in the
fiduciary area and the IADB’s project are being explored to maximize results and avoid
overlaps. Additional previous reviews of procurement harmonization options include model
legislation for financial administration prepared in 1995 with the assistance of the Canadian
Government, which has not been adopted. The harmonized framework proposed under that
exercise included a set of individual domestic laws rather than uniform legislation for the
region. Alternative harmonization options, which should be further assessed, include the
adoption of regional directives or a regional agreement including all relevant principles and
basic features of acceptable procedures and requiring member countries to adopt consistent
national legislation.
There are no effective institutional arrangements for policy oversight. In addition to national
authorities, appropriate arrangements at the regional level are desirable to promote
harmonization, coordinate capacity building efforts, and carry out a policy dialogue on
procurement with external partners.
7.
The Director of Audit (DOA) is empowered by the Constitution and the FAA
Act/Audit Act to oversee government accounts and report annually or more often, if
necessary, to the Parliament. However, the DOA does not monitor implementation of
procurement rules or has any policy generation or coordination function. There is no other
body with such functions or authority which is critical to promote and oversee the
modernization and harmonization of procurement rules.
8.
At the regional level, ideally within the OECS Secretariat, these responsibilities
should include maintaining an ongoing policy dialogue with the countries and external
partners, including the donor community, providing technical assistance to the countries in
reforming and maintaining their national legislations up to date, monitoring and evaluating
the impact of the reforms and the continued efficiency of the national and regional systems,
coordinating capacity building, publishing a procurement bulleting or otherwise
disseminating information on procurement, and developing harmonized tools (e.g. bidding
documents, e-procurement, manuals, etc.) to facilitate the efficient implementation of the
regional procurement system.
9.
At the national level, an appropriate authority should be designated as official
interlocutor of the regional policy/oversight body. The national authority should be
responsible for overseeing implementation of the regional approach within the domestic
system. An viable option could be converting the Central Tender Board (CTB), where it
exists, into a policy making and regulatory body, provided that its operational involvement in
the procurement process ceases and has staff with adequate capacity and authority to promote
the changes at the highest levels of government.
The current procurement organization and resources are not efficient. Procurement
decision-making authority should be decentralized to procuring entities, except for selected
items for which better economies of scales could be achieved at the national or regional
level, and a comprehensive capacity-building program should be implemented to create a
competent corps of procurement professionals.
10.
The CTB, Minister of Finance, or Cabinet, depending on applicable thresholds which
are, generally, very low, approve most contracts. This approach causes delays and reduces
the procuring entities’ ownership of the procurement process and accountability. The
procuring entities, in turn, have little opportunity or incentives to build procurement capacity.
While a CTB is legally required for all OECS countries, St. Kitts and Nevis and Dominica
never established one. In these countries the contracts are approved by the Minister of
Finance and the Minister of Works if involving construction. A Departmental Tender Board
is required only in Grenada, for contract below the specified threshold, and may be appointed
ad hoc in St. Lucia.
11. Procurement decision-making authority should be delegated to line ministries and
other procuring entities in the public sector by substantially raising current contracting
powers thresholds and revising them upwardly every year, as appropriate. It is also
recommended that the CTB (or Ministers of Finance and Works in the cases of Dominica and
St. Kitts) and Cabinet have no role in approving contracts. As a minimum, their current role
should be gradually phased out, as the procuring entities’ capacity increases and internal
controls are strengthened, and limited by law to a strictly formal review (i.e. only to ensure
the legality of the process), subject to stringent time limits (i.e. approval would be implicit
when the time has elapsed), and on the basis of a streamlined bid evaluation report designed
for this purpose.
12.
The option of procuring in bulk certain goods needed on a recurrent basis by all
public sector organizations (e.g. paper, spare parts) should be further considered. Procuring
units could be established for this purpose in the Ministries of Finance and carry out bulk
procurement for all government organizations by consolidating annual procurement plans
prepared by each entity. The heads of these centralized units should be experienced
procurement professionals authorized to sign all contracts without requiring further
approvals. In addition, better economies of scale and bargaining positions could be achieved
by pulling requirements for selected items (e.g. construction materials, diesel fuel for
electricity generation) and procuring them on a regional basis under the umbrella of the
OECS Secretariat. Such regional procurement approach should build on the experience of
the joint procurement of pharmaceuticals carried out by the OECS Secretariat’s
Pharmaceutical Procurement Services (PPS) Unit following further review and improvement
of the procurement practices presently utilized by the PPS.
13.
Procurement is not considered a professional expertise with specific entry
requirements and a career path in the civil service system based on qualifications and
performance. While levels of capacity vary form country to country, overall, in the region
there are few capable procurement officers and very little training opportunities are available.
An in-depth skills inventory and training needs assessment should be prepared and a
comprehensive regional capacity development strategy developed. The assessment and
strategy should include private and public training institutions and universities. The
development of a post graduate program on government contracts or the inclusion of relevant
courses in the main universities’ curricula should be considered. A procurement career
should be designed to be consistent with wider public service reforms.
Practices of application are poor and procedures for planning, carrying out and monitoring
procurement inefficient and often non-transparent. Controls should be strengthened,
effective planning, monitoring and contract administration tools adopted, and a strategy to
incorporate new efficiencies such as e-procurement developed.
14.
With very few exceptions, procuring entities do not prepare procurement plans,
typically invite bids from a short-list of bidders, do not specify evaluation or qualification
criteria in the bidding documents, have no established systems and limited capacity for
contract administration, and often pay suppliers and contractors with substantial delays. In
addition, there is no pre-qualification for major contracts, and no post qualification is
conducted with resulting serious contract implementation problems, there are no standard
bidding documents, invitation for bids are usually not advertised, and, in many cases,
contracts are inappropriately split among different bidders. Even where rules designed to
enhance transparency exist (e.g. publication of contract awards), they are generally not
applied. Finally, contracts are often not fully funded through their completion due to
inadequate budgeting.
15.
There are significant arrears on submission of audit reports to the Parliament in
several of the countries. The Directors of Audits have severely limited financial resources,
staff and training, and their approach is excessively bureaucratic. Consequently, the control
function is ineffective and is generally held in low regard. In addition, there is no code of
ethics defining responsibilities of public employees involved in the procurement function,
roles and responsibilities are not clearly defined in writing, there are few technical and
administrative controls and procurement records are generally poorly maintained.
16.
Pending the harmonized revision of the legal framework, the following remedial
actions should be implemented by each country OECS countries in the short-term:
•
•
•
•
•
•
•
•
•
prepare appropriate procurement plans;
adopt realistic annual budgets;
use open bidding with clear post-qualification requirements;
advertise contracts on a regional basis;
adopt standard bidding documents for the main types of procurement which include
appropriate evaluation criteria;
publish contract awards on a regional basis;
issue procedures and instructions to implementing and control agencies;
require that suppliers and contractors be paid more promptly; and
ensure that evaluation committees comprise only technically qualified staff.
17.
Specific Guidelines on how to implement and monitor these actions should be issued
by the Ministries of Finance. Appropriate instruments with force of law should also be
considered to support enforcement in the interim period until a comprehensive legal reform is
designed and implemented. The revised regulatory framework, which requires a concerted
medium-term effort on a regional basis, should mandate regional competitive bidding for
contracts above an appropriate threshold and address other relevant procedures and tools, as
appropriate. Among other initiatives which could significantly enhance efficiency and
transparency is the development of a regional e-procurement strategy including actions easily
achievable in the short-term such as electronic advertisement of procurement information
(e.g. bid notices, documents, laws and regulations, guidelines for bidders, and awards) and
actions requiring medium-term efforts to establish appropriate regulatory, control,
infrastructure and institutional frameworks, and capacity to implement a fully electronic
public procurement system. Both sets of actions should be spearheaded and coordinated by
the proposed regional policy unit (see para. 8) in coordination with their national
counterparts.
Consultation and Next Steps
18.
Following data collection and analysis and discussions in each member countries,
preliminary findings and recommendations for reform were presented to the countries by the
Bank on May 25, 2001 during the “Meeting on External Assistance to the OECS” in Saint
Lucia. A regional workshop is currently planned for May 29 and 30, 2003 to gain agreement
from a broad group of stakeholders at the technical and policy level on a Regional Fiduciary
(i.e. procurement and financial management) Action Plan for the OECS. The workshop will
present the key policy recommendations of the CPAR and CFAA and further explore the
need for a regional oversight framework for public expenditure and public sector issues,
taking into account lessons learned from past experience about the challenges of regional
cooperation.
19.
The workshop’ s main objective is to produce an action plan agreed upon by the
participants. The action plan would be incorporated in the final version of the CPAR and
forwarded to the OECS and national authorities for endorsement. Individual sessions with
each country team will also be held to confirm country-specific recommendations included in
the two reports.
SUMMARY OF FINDINGS: STRENGTHS AND WEAKNESSES OF THE
PRESENT PROCUREMENT SYSTEM
1. LEGAL AND REGULATORY FRAMEWORKS
A. Existing Legal and Regulatory Frameworks
1.1
The national constitutions of the OECS group were reviewed for differences and
similarities in legal and regulatory frameworks. Grenada, St. Lucia and St. Vincent and
the Grenadines (hereinafter referred to as the OECS Group for purposes of this report)
have representative and unitary governments with several local administrative units. St.
Kitts and Nevis, on the other hand, has a federal form of government, and the island of
Nevis has its own administration. The OECS group recognizes Queen Elizabeth II as the
Head of State, represented by a Governor-General. The exception is Dominica, which is
an independent republic within the British Commonwealth. In each country, the
Constitution provides for: (i) withdrawals from a Consolidated Fund or other public
funds; (ii) authorization of expenditure from Consolidated Funds by appropriation law;
(iii) authorization of expenditure in advance of the appropriation law; and (iv)
requirements for proper accounting and audit of funds. The Constitution also permits
government to collect and spend money in specific ways under the Finance Act, which is
ratified annually. Regulation of public expenditures for procuring agencies is done
through parliamentary appropriations.1
1.2
The Financial Regulations/Instructions and the Stores Rules and Regulations
made under the Finance Administration Act govern the public sector procurement of
goods, works and services. These regulations provide that government departments may
enter into contracts, subject to Stores Rules and Regulations. Through regulatory and
subsequent administrative arrangements, the processing of all procurement contracts for
all major works became the responsibility of the Ministry of Communication and Works
(MOCW).
1.3
The Director of Audit (DOA) is empowered by the Constitution and the Audit Act
to carry out an independent audit of the accounts and operations of government
departments and public entities. DOA’s responsibilities include oversight of government
accounts and those of public entities, and annually reporting irregularities, such as
improper vouchers, to the Parliament. It also is empowered to prepare special reports for
1
The basic legislation in each country is: Commonwealth of Dominica: (i) The Constitution of the Commonwealth of Dominica
1978 (amended by Act 9 of 1983; Act No. 21 of 1984; Act No. 22 of 1984); (ii) Finance and Audit Act 1965 (act No. 8 of 1965) date
of commencement 15 September 1966; (iii) Financial Regulations 1976 made under Section 16(1) of the Finance and Audit Act 1965;
(iv) Financial (Stores) Regulations effective 1 November 1980. Grenada: (i) Grenada Constitution Order 1973; (ii) Finance and Audit
Act 1964: (iii) Finance and Audit Amendment Act 1998 (Act No. 25 of 1998) contains (a) The Financial Rules, 1998 [First Schedule]
and (b) The Stores Rules 1998 [Second Schedule]. St. Kitts and Nevis (i) Constitution of 1983; (ii) Audit Act 1990 (Act 8 of 1990);
(ii) Finance Act 1990 (Act no. 9 of 1990); (iii) Financial Instructions 1983 (issued under Section 53 of the Constitution); (iv) Stores
Rules of St. Christopher and Nevis (effective 19 September 1983.Saint Lucia: (i) The Saint Lucia Constitution Order 1978: (ii)
Finance Administration Act 1997 (Act No. 3 of 1997); (iii) Audit Act 1988 (Act No. 26 of 1988); (iii) Financial Regulations
(Statutory Instruments, 1997 No. 36); (iv) Procurement and Stores Regulations (Statutory Instruments , 1997 No. 37). St. Vincent and
the Grenadines: (i) The Constitution of St. Vincent and the Grenadines; (ii) Financial and Stores Rules of the Windward Islands 1952;
(iii) Financial and Audit Act 1964; (iv) Manual of Tender Procedures (issued on November 21, 1967 as Statutory Rules No. 101-114).
2
Parliament. DOA’s audit of accounts determines whether, in its opinion, all funds
expended and charged to appropriation accounts were applied according to the provision
made by Parliament, and that payments of public money conform to the authority that
governs it, and was incurred with appropriate regard for avoiding waste and
extravagance.
1.4
The Minister of Finance (MOF) prepares Financial Regulations as well as
Procurement and Stores Regulations. The MOF is operationally involved in
procurement, by virtue of having the authority to issue directions for the procurement of
goods and services by tender or direct purchase, and for the sale of stores by tender or
direct sale. The Financial Regulations and/or the Stores Regulations or Rules require the
establishment of a Central Tender Board (CTB)2 in the OECS group, which functions as
an oversight body. However, the CTB operates only in Grenada, St. Lucia, and St.
Vincent and the Grenadines, with the Ministry of Finance taking the lead role. In
Dominica and St. Kitts, MOF and MOCW exercise oversight responsibility for
procurement of goods and works, respectively. For Nevis, MOF alone assumes the
oversight responsibility.
1.5
Procurement entities do their own planning, prepare bid documents, issue
invitations for bids, evaluate bids and make recommendation for contract award. Most
procurement of works and goods, not involving donor funds, is done through selective
tendering. This is usually by invitation to three firms from: (i) the approved register of
contractors for works classified into large, medium and small lots; and (ii) past
experience or knowledge of the goods procuring entity. For major works, using
prescribed pre-qualification criteria, the MOCW reviews the list of large contractors and
normally selects three considered competent enough to meet the requirements. On the
other hand, decision-making is not decentralized. This is because: (i) there is a Central
Tender Board (CTB) responsible for processing procurement of goods, works and
services for the Government Ministries and Departments in Grenada, St. Lucia, and St.
Vincent and the Grenadines; and (ii) though there is no functioning CTB in St. Kitts and
Nevis, decision making is centralized in MOF and MOCW for goods and works,
respectively. In the case of Dominica: (i) all contracts for works require the approval of
PS of the MOCW and their Minister, with separate clearance from the MOF about
availability of funds for each contract; and (ii) for goods, the approval of the PS of MOF
is required. In the cases of St. Kitts and the island of Nevis, the approval of their
respective Ministries of Finance is required for all contracts of significant value.
1.6
For St. Lucia, and St. Vincent and the Grenadines, the decision of the CTB is final
and thus not formally subject to consideration and approval by the Cabinet. In Grenada,
all contracts for goods, works, and services must be approved by the Cabinet. In
Dominica and St. Kitts and Nevis, the Minister decides whether the approval of the
Cabinet is needed before contract award; however, in most cases the Cabinet’s approval
is obtained. Table 1 delineates procurement contract decision-making arrangements in
2
For ease of reading the terms “Central Tender Board” or abbreviation “CTB” are used through out this document to refer to the
“Public Tenders Board”, the “Tender Board” and the “Central Supplies Tenders Board” of Grenada, St. Kitts and Nevis and St.
Vincent and the Grenadines respectively.
3
the OECS group:
Table 1. Procurement Decision Making in the OECS Group
OECS
Country
Existence
of a CTB
DTB Approval
Required
CTB Approval
Required
Remarks
Yes.
CTB in
Regulations
but in reality
does not
exist.
Not applicable.
There is no
Departmental
Tender Board
(DTB). This is a
statutory
requirement.
The stores regulations
require that contracts
for goods exceeding the
value of EC$5,000 and
for common-user
supplies involving more
than one ministry the
matter must be
considered by CTB. Not
being done in practice.
Grenada4
Yes. Called
the Public
Tenders
Board (PTB).
Contracts for goods and
works exceeding
EC$10,000 and
EC$100,000,
respectively, require the
approval of the PTB.
St. Kitts and
Nevis5
Yes. Called
Tenders
Board under
the Financial
Instructions.
Not in
existence.
Works contracts
exceeding
EC$10,000 but not
exceeding
EC$100,000 require
the approval of the
DTB.
Not Applicable.
There is no
Departmental
Tender Board
(DTB), as this is not
a statutory
requirement
Contracts for goods are
entered into after obtaining
the approval of MOF. All
works exceeding EC$
10,000 processed by
MOCW; approvals of
PS/MOCW and Minister
for Communication and
Works required. The
Minister refers to Cabinet
generally for cases
exceeding EC$50,000.
If the contract value
exceeds EC$100,000, the
approval of the Cabinet is
required.
St. Lucia6
Yes, called
CTB
St. Vincent
and the
Grenadines7
Yes. Called
Central
Supply
Tenders
Board
(CSTB)
Dominica.3
3
Goods and works
contracts valued at
EC$20,000 or more,
but not exceeding
EC$100,000,
require the approval
of the Departmental
Tender Board. Its
decision is final.
Goods and works
contracts valued at
EC$20,000 or more,
but not exceeding
EC$250,000, must
be ratified by CSTB
The Financial
Instructions and the
Stores rules require that
contracts for works
exceeding EC$3,000
and goods exceeding
EC$300 (except for
stationery) must be
considered by the
Tenders Board. (This is
the CTB). Not being
done in practice.
For goods and works
contracts exceeding
EC$100,000
Goods and works
contracts valued at
EC$250,000 or more
Works contracts exceeding
EC$3,000 require approval
of the PS and the Minister
of MOCW. The approval
of Cabinet is obtained if
the value exceeds
EC$50,000. With regard to
contracts for goods
exceeding the value of
EC$300,000 MOF
approval is required.
Stationery items are
procured by the Office of
the Prime Minister.
CTB decision is final.
CSTB decision is final.
Regulations 280 to 286 of the Financial (Stores) Regulations, 1980 of Dominica
Section 7 of the Stores Rules, 1998 of Grenada
5
Section 24 of the Financial Instructions of St. Kitts and Nevis dated 1983.
6
Regulations 11, 12 and 16 of the Procurement and Stores Regulations, 1997 of St. Lucia
7
Rule 7 of the Manual of Tender Procedures (issued on November 21, 1967 as Statutory Rules No. 101-114).
4
4
1.7
In all countries reviewed, procurement for common user office supplies and
materials is centralized in the MOF or the office of the Prime Minister.
1.8
Guidance for the current public procurement system is scattered among various
outdated procurement regulations and procedures. Responsibility for review and
monitoring is similarly dispersed. There are many players in the procurement system and
interventions in selecting the short list of three contractors/suppliers. As a result, little
action is taken to ensure the procurement process compliance with established regulations
and procedures.
B. Findings on the Existing Legal and Regulatory Framework
1.9
The existing procurement regimes in the OECS group--the Financial
Regulations/Instructions, Stores Regulations/Rules and/or the Manual of Tender
Procedures--made under the Finance Administration Act essentially are internal rules for
financial and economic control of government administration. As such, they lack the
status needed for an effective procurement law. As administrative documents, they can
be amended by the MOF with no regard for the rights of suppliers-contractors. Open
advertisement, competitive bidding and contract award criteria, for example, depend on
the approach taken by the Government in power at any given time.
1.10 The Regulations are not enacted by parliament, and so lack adequate legal
standing either to command the respect of public administration officials or inspire the
confidence of the private sector. Even these rules are not complied with fully during the
procurement process, e.g., advertisement, competitive tendering, and establishment and
use of a Central Tender Board in the cases of Dominica, St. Kitts and Nevis.
1.11 The Regulations /Rules do not really regulate the actual procurement process
from the viewpoint of economy, efficiency, competition, and transparency. The content
concerned with procurement process, including methods and contract award, are not
complete and frequently ambiguous. This leads to arbitrary decisions that result in
inefficiency and lack of transparency. Further, these Regulations/Rules do not include the
details of a public procurement law. As an example, the UNCITRAL Model Law on
Procurement of Goods, Construction and Services sets forth simple rules which are key to
benchmark procurement principles such as transparency, efficiency, and accountability.
The Regulations/Rules promote the use of shopping or selective tendering involving
solicitation of bids from at least three suppliers and contractors from a pre-approved list.
Furthermore, the choice of procurement process and evaluation criteria, including the
qualification and experience required of the bidder, are highly dependent on the
discretion of the head of the procuring entity, namely, MOCW, MOF, or CTB.
1.12 Advertising of bidding opportunities is rarely done by the procuring entity for
contracts financed by the local budget--though this is often required by the procurement
5
rules. Advertisement of the bidding opportunity is done only where it is required by an
external funding agency.
1.13 Under the existing procurement regime, there is no independent permanent body
to which contractors-suppliers can file complaints. A supplier-contractor maltreated by a
public entity must file the complaint with the entity accused of wrongdoing. Also,
complaining contractors-suppliers have no guarantees or legal assurance of transparency
or equality when they seek remedies. The system of control is entirely internal; for
example, many public entities have internal audit sections but lack a formal protocol for
dealing with contractor complaints.
1.14 The present system does not cater: (i) either to complaints relating to crude
dealings of corruption and/ or (ii) to sophisticated practices by procurement entities
misdirecting procurement contract awards to favor clients. Without credible complaint
paths, especially when technical merit is challenged--with clear implications for
economy, efficiency, competition, and transparency--suppliers and contractors will be
discouraged from lodging reasonable complaints. Thus, violation of procurement rules
and regulations goes unchecked, which further erodes public confidence in the system.
1.15 Under the existing Procurement regime, bidders can take their complaints to
courts of law under normal civil procedures. From a purely practical standpoint, this is
not a procedure bidders would pursue, given the cost and time involved, as well as the
uncertainty about whether they will receive fair treatment.
C. Recommendations on Legal and Regulatory Framework
Short-term Actions
1.16 As the proposed procurement actions will encompass the operations of the OECS
group as a whole, attention should be given to developing a dialogue between the MOF
of all members of the OECS group in the short-term to harmonize procedures in the
medium-term on a regional basis.
1.17 MOF should conduct workshops to discuss the main legal and regulatory
procurement issues with key stakeholders, and promote dialogue and discussions among
those most knowledgeable about procurement issues in OECS, including representatives
from the government, business community, and civil society. The Bank could provide
technical assistance for these workshops.
Medium-term Actions
1.18 The United Nations Commission on International Trade Law (UNCITRAL) model
law on procurement of goods, construction and services (hereinafter called the “Model
Law”) can been used as a reference document and basis for the development of a
transparent and efficient Government Procurement regulatory framework. Various
provisions similar to those of the Model Law would help address many of the specific
6
problems identified, provided that modifications are made which are appropriate to the
domestic legal and administrative systems and traditions. Clearly, not all the provisions
included in the Model Law would necessarily be applicable or desirable in the OECS
context. Among other aspects which would require substantial tailoring, is the inclusion
of separate chapters for procurement of consulting services, bid protest, and debarment,
and articles on e-procurement and procurement through community participation. In
addition, some of the provisions of the Model Law do not address adequately aspects
which are important for transparency (e.g. maximum amount of domestic preference,
conditions under which foreign bidders can be excluded). Finally, the Model Law also
includes provisions which are not recommended by the Bank or would require substantial
modifications (e.g. provisions on alternative procurement methods). National
procurement legislations should be fully consistent in order to establish a harmonized
framework for the OECS community. A harmonized regional procurement regime would
substantially strengthen the OECS negotiating position in regional and external fora, such
CARICOM, the Free Trade Area of the Americas and the WTO. Different options such
as OECS directives or a regional agreement on public sector procurement should be
further assessed as a starting point for the reform implementation phase.
1.19 Appropriate institutional arrangements should be established at the regional and
national levels to promote harmonization and coordinate all capacity building activities
ensuring a consistent approach and maximizing results. The national procurement
oversight authority could be an independent arm of the executive outside the framework
of the Ministries/Departments, reporting to the Parliament and informing the Cabinet
annually, or on an ad-hoc basis when the need arises. In the alternative, the current
CTBs, where they exist could be converted into policy making and regulatory bodies,
provided that they are no longer operationally involved in procurement and have
appropriate capacity and authority.
1.20 The procurement oversight authorities would also be responsible for providing
procurement policy coordination and guidance, etc., to the Department/Ministerial tender
boards as well as the parastatal tender boards. Their functions would be to develop
implementing regulations, consistent with the regional and national frameworks and
monitor the overall implementation of the revised regulatory framework. The oversight
authorities would also collect statistics on public procurement, prepare standard bidding
documents, maintain a dialogue with stakeholders (including business and civil society),
provide training for procurement staff, and publish an annual report. This range of
functions encompasses both policy and regulatory duties. These institutional
arrangements are as important as a sound regulatory framework for the establishment and
well functioning of a modern, harmonized procurement regime in the OECS.
1.21 The regional and nationals oversight authorities should include representatives
from the private sector and civil society. The representatives from the private sector and
civil society would be selected by their respective organizations.
1.22 The procurement law should include the establishment of an independent review
system (including from the policy/oversight authorities) to address complaints from
7
aggrieved bidders and provide remedies against breaches of the legislation.
1.23 The institutional relationships and levels of authority in the procurement
framework should be elaborated more precisely in the proposed public procurement
legislation and accompanying regulations.
1.24 The Regulations for recruitment of consultants should be substantially different
from those for goods and works. Therefore two separate sets of Regulations should be
issued under the proposed procurement legislation: one dealing with bidding procedures
for goods and works and the other dealing with Requests for Proposals for selection,
hiring, and use of consultants.
1.25 The proposed procurement reform would encompass public sector procurement
operations of all members of the OECS group. Harmonization of procurement laws, rules
and regulations of each member of the OECS group becomes more important as regional
procurement, as envisaged, would be done by bulking items commonly procured by the
public sector with a view to increasing contract size to make it sufficiently attractive to
prospective bidders and to achieve economy of scale. Action should be taken to facilitate
the necessary harmonization of legal instruments.
1.26 There is little value added by referring bids to the Cabinet for approval of
individual contract awards exceeding (i) EC$100,000 (i.e. US$ 37,037 equivalent) in the
case of Grenada; and (ii) EC$50,000 (US$ 18,519 equivalent) in the case of Dominica,
and St. Kitts and Nevis -which adds about two to six weeks to the processing time. For
this reason, immediate consideration should be given to abolishing this requirement. The
Cabinet instead could obtain a statement periodically of all contracts exceeding specified
thresholds. As a minimum, the role of Cabinet should be gradually phased out and
limited to very large contracts. Until phased out, Cabinet’s review should be strictly
formal (i.e. only violations of the law), conducted on the basis of an evaluation report
developed for this purpose, and completed within a very short time period.
1.27 In the medium term, individual procuring entities should be given authority to
undertake procurement of goods, works, and services required to meet their operational
needs with the funds appropriated for them. They should be held accountable for public
procurement decisions taken by them, as they cannot hold accountable any outside
agencies (e.g., CTB or MOF) for causing delays by protracted decision-making.
8
2. PROCEDURES AND PRACTICES
A. Findings on Procurement Planning and Annual Updating of Procurement Plans
2.1
A major weakness in Ministries/Departments and parastatals is the lack of a
proper procurement plan containing bid packages prepared with consideration of
economy and efficiency, and scheduled properly to meet project implementation needs.
Furthermore, these plans, even if they exist in some form, are not updated on a semiannual basis.
2.2
Lack of planning often creates conditions favorable to ad hoc or unwarranted
emergency procurement, so that obtaining goods becomes urgent and standard rules are
waived. In addition, if the issue of planning is not adequately addressed, it would be
difficult to embark on regional or joint procurement of common items.
B. Findings on Eligibility and Process
2.3
In the OECS group, the statutory requirements for competitive bidding and
advertisement vary from country to country. Further, there is inconsistency between the
statutory requirements and the practice followed, as reflected in Table 2, below.
Table 2. Statutory requirements and practice followed for competitive tendering
and advertising for procurement of works.
OECS Group
Actual Practice under local funding
Dominica8
Statutory Requirements-competitive tendering and
advertising for works
contracts
Not required.
Grenada 9
Not required.
St. Kitts and Nevis10
Required for contracts exceeding
EC$3,000 (US$1,111 equivalent).
St. Lucia11
Required for contracts exceeding
EC$100,000 (US$37,037
equivalent).
Required for contracts exceeding
EC$250,000 (US$92,593
equivalent)
Advertisement is not done. Selective tender
procedure is followed by soliciting bids from three
or more firms.
Advertisement is not done. On occasion the
MOCW places the invitation for bid on their notice
board. Selective tender procedure is followed by
soliciting bids from three or more firms.
Advertisement is not done. Selective tender
procedure is followed by soliciting bids from three
or more firms.
Advertisement is not done. Selective tender
procedure is followed by soliciting bids from three
or more firms.
Most ministries advertise bidding opportunities for
contracts exceeding EC$250,000 (US$92,593
equivalent), unless they obtain a waiver from CTB.
St. Vincent and the
Grenadines12
2.4
8
In the OECS group, except Grenada, prospective bidders for works are expected
Regulation 173 of the Dominica Financial Regulations, 1976.
Rule 117 of Grenada Financial Rules 1998.
10
Instruction 318 read with Instruction 334 of the St. Kitts and Nevis Financial Instructions 1983.
11
Regulation 13 read with Regulation 16 of the St. Lucia, the Procurement and Stores Regulations 1997.
12
Rules 6 and 7 read with Rule 2 of the St. Vincent and the Grenadines, the Purchases and Tenders Procedure issued in 21 November
1967 under circular No. 32/67.
9
9
to register with the Ministry of Communication and Works (MOCW). No procedures are
prescribed for renewal or review of registration on a periodic basis. A contractor may be
removed for gross delinquency but this seldom happens. In Grenada, there is no official
list of pre-approved contractors; instead there is an internal list; based on previous
knowledge and experience (including MOCW institutional memory). Under existing
procurement regimes, the bidder must be registered and appear on an approved list of
contractors (or be known to MOCW, in the case of Grenada), which also applies to
foreign firms. Unregistered potential bidders must apply to MOCW and obtain their
registration before they will be considered for inclusion in the short list of three or more
firms for selective tendering.
2.5
For works contracts, countries in the OECS group use an approved list of
contractors, classified into “large,” “medium,” and “small.” Grenada has its own internal
classification system (see para 2.19 for details). It is clearly not in the best interest of a
public procuring entity from the standpoint of competitiveness and transparency to use a
short list of contractors for selective tendering.
2.6
Countries in the OECS group prepare a short list of usually three or more
contractors who are asked to bid for a particular contract. Interviews with procurement
technical staff indicate the short list generally comprises people whom they know and
whose capabilities they are familiar with. This is the “pre-qualification of contractor”
procedure, again clearly not in the best interest of transparency and competitiveness for
public procurement entities.
2.7
For locally funded works contracts, the contractor association and Chambers of
Industry and Commerce have criticized current procedures for selective tendering as
being nontransparent and crony-based. While foreign firms are not asked either directly
or indirectly to register, they are not prohibited from applying. Sometimes foreign firms
are included on the short list for submitting tenders under works contracts.
2.8
There is no formal pre-qualification procedure for locally funded contracts, but
the selection of a shortlist of bidders is made from a pre-existing list of contractors, so the
question of using standard pre-qualification documents does not arise. Financial
information is not requested or evaluated to determine bidders’ financial capacity to carry
out a contract.
2.9
Countries in the OECS group do not undertake a post-qualification check on the
lowest evaluated, substantively responsive bidder/proposed contract awardee for works
(subject to one observation explained below). In the case of Grenada, the MOCW posts
the qualifications of the proposed contract awardee on a selective basis “based on
personal knowledge and experience.”
2.10 Externally funded contracts are subject to the funding agencies’ standard
prequalification documents or a modified version of the World Bank’s Standard
Prequalification document. Further, they may conduct a post-qualification of the lowest
10
evaluated, substantively responsive bidder following funding agency requirements.
2.11 For contracts for goods, advertisement and competitive tendering is required in all
countries of the OECS group following the provisions contained in the
Regulations/Rules; however, the practice followed is completely different (see Table 3
below).
Table 3. Statutory requirements and practice in competitive tendering and
advertising for procurement of goods.
OECS Group
Statutory Requirements –
competitive tendering and
advertising required for all
contracts valued at
Actual Practice under local
funding
Dominica
EC$5,000 (US$1,852 equivalent) or
more;13.
EC$100,000 (US$37,037 equivalent)
or more14
Advertisement is not done.
Grenada
St. Kitts and Nevis
Exceeding EC$30,000 (US$11,000
equivalent)15
St. Lucia
Exceeding EC$100,000 (US$37,037
equivalent) 16
St. Vincent and the Grenadines
Tenders issued by the CSTB should
be advertised, i.e. individual contracts
exceeding EC$250,000 (US$92,593
equivalent) 17
Advertisement is not done unless the
value of the procurement is in the
range of EC$500,000 (US$185,185
equivalent);
Advertisement is not done except for
large value contracts, like the
procurement of “fuels and lubricants”
(approximate annual value of EC$12
million); in this case, the MOF issues
the advertisement.
Advertisement is not done.
Advertisement of bidding
opportunities is done by some
ministries but not by others (e.g.
Ministry of Health, Ministry of
Education).
2.12 The normal medium of publicity for tender notices is prescribed in the Gazette,
the local press, and radio announcements.
2.13 Externally funded contracts for goods and works in the OECS group follow the
funding agency’s rules for advertisement and notification.
C. Findings on Methods of Procurement
2.14 There is no explicit requirement that open competitive bidding is the preferred, or
even the default method of procurement under the existing procurement
Regulations/Rules in the OECS group, although as already stated in the Tables 2 and 3
13
Regulations 282 and 286 read with Regulations 278 and 280 of the Dominica Financial (Stores) Regulations, 1980.
Rule 109 read with Rules 108 and 109 of the Grenada Stores Rules 1998.
15
Rule 205 read with Rule 206 and Rule 200(3) of the Stores Rules of St. Kitts and Nevis.
16
Regulation 13 read with Regulation 16 of the St. Lucia, the Procurement and Stores Regulations 1997
17
Rules 6 and 7 read with Rule 2 of the St. Vincent and the Grenadines, the Purchases and Tenders Procedure issued in 21 November
1967 under circular No. 32/67.
14
11
above, “competitive tendering and advertisement “ are required for (i) all contracts for
goods in all the OECS group beyond certain thresholds and (ii) all contracts for works in
the OECS group except Grenada. (See paras 2.3 and 2.11 above).
2.15 Only one requirement for bidding is provided for, that is tenders are received in
sealed envelopes. The rules deal with “small or local purchases” and “bigger sized” or
“overseas contracts”. It does not detail the different methods of procurement and the
criteria for their use. The procuring entities (subject to an exception discussed below) use
a de jure or de facto approved list of contractors and suppliers and solicit bids from three
or more firms. Most procurement falls under the category of selective tendering or
shopping depending on the estimated contract value. However, if the contracts involve
financing by an external funding agency, the agency’s procurement rules are followed.
2.16 Additionally, in regard to St. Lucia, individual contracts not exceeding
EC$100,000 are awarded on the basis that there should be reasonable spread of contracts
amongst several competing contractors. Often, jobs may be divided to give several
contractors a piece of the work. For example, a single wall may be constructed under
several contracts. The objective appears to be to share the pie among as many contractors
as possible.
2.17 There are no statutory requirements related to public bid opening. The bidding
documents usually prescribe the bid closing date. For externally funded contracts, the
OECS group prescribes the bid opening date and time required by the funding agencies’
rules, but there are variations in practice, described below. Often bid opening does not
occur on the same date as bid closing, but is done on the following day, and even a few
days or a week later. The date of bid opening is the date the CTB meets, and in St. Lucia
this is once a month. In Grenada, bid opening is a few days after bid submission
deadline, even in the case of donor funded contracts (including those funded by the
Bank). For locally funded contracts: (i) in Dominica, there is no public bid opening for
“restricted tenders,” and if there is public bid opening, they would ensure that there is one
bidder present; (ii) there is no public bid opening in the case of Grenada and St. Kitts and
Nevis; and (iii) in St. Lucia, many bidders are unaware of bid opening, as they take place
on the same day and are not called when their bids are opened due to various constraints.
In St. Vincent and the Grenadines, public bid opening takes place as specified in
government contracts, but for statutory bodies there is no public bid opening, with bids
opened only when necessary to evaluate them.
2.18
Most Ministries and agencies of OECS use standard bidding documentation
(SBD) of CDB, FIDIC, and the World Bank for most procurement of goods and works
financed by external agencies. For most works financed by other (including local)
resources, they use either a modified version of the CDB and the World Bank
documentation or their own (i.e., department) standard bidding document, which follows
generally the FIDIC Conditions of Contract for Works of Civil Engineering Construction,
with certain modifications. For goods financed by other resources there are no Standard
bidding documents used.
12
2.19 There is no prescribed list of qualifications for contractors, but the procuring
entities in the OECS group use a de facto or de jure list of contractors classified into
large, medium and small contractors using rule-of-thumb qualifications for equipment,
personnel, and financial capability. There is a universal practice of classifying/registering
contractors in all countries except Grenada, where they use a list of contractors based on
their experience and information available. Selective tendering is conducted by
choosing a shortlist of firms from an “approved” list. This applies to both national and
international bidders. Bidder’s qualifications are not usually prescribed in the
“Instructions to Bidders” for procurement of equipment or goods and works, as procuring
entitles the solicitation bids on the basis of a short list prepared for the occasion.
(See also para 2.6 above).
2.20 There are no statutory rules specifying the need to include evaluation criteria in
bidding documents. In the OECS group, the bid evaluation and contract award criteria for
locally funded contracts are not fully published for the bidders. In many bidding
documents for works, the desired completion date is not specified, as the bidder is asked
to specify his/her completion period for the works tendered--the reason being that the
bidder is in the best position to know when the works will be completed. Further the bid
evaluation might take into account past relationship with the contractor, the past
performance of the bidder, and the procuring entity’s assessment of “quality of the
bid/bidder,” meaning completion date and price (i.e. if the bid price is too low below
engineer’s estimate, the bid is rejected), and other factors. For contracts funded
externally, the evaluation criteria for bid examination and evaluation is provided but the
details are not always complete.
2.21 There are no specific instructions on how bid evaluation should be organized and
carried out in the OECS group. In the case of Dominica, St. Lucia and St. Vincent and the
Grenadines, evaluation committees are appointed on an ad-hoc basis for major
procurements. In the case of Grenada and St. Kitts and Nevis, a qualified engineer of the
procuring entity, or a technically capable person in the case of MOF, does the evaluation
of bids. In the OECS group, if consultants are employed for the project, they carry out the
evaluation of bids. In Grenada, if the value of the works contract exceeds EC$1 million
(US$370,370 equivalent), evaluation is generally done by consultants.
2.22 Negotiations after bid opening or award selection are generally not forbidden
under the Regulations/Rules. In practice, negotiations are undertaken after bid opening or
award selection to obtain lower prices or to change the scope of work in the OECS group.
2.23 Although negotiations always occur either to obtain lower prices or when the
lowest evaluated bid exceeds the engineer’s estimate, there are no rules governing
negotiations under normal contracting.
2.24 Conditions for obtaining “bid” and “performance” securities in the OECS group
are varied for locally funded contracts (see Tables 4 and 5).
13
Table 4. Provisions relating to Bid Security in OECS group
OECS Group
Statutory Requirements
for Bid Security
Actual Practice followed for
locally and externally funded
contracts.
Dominica
Grenada
St. Kitts and Nevis18
Not required
Not required.
Not required.
St. Lucia19
Not required.
Not required
Not required.
Mostly for works contracts exceeding
EC$1million (US$370,370
equivalent) and at 1% of bid price.
Generally not required; but
occasionally may be a requirement.
St. Vincent and the Grenadines20
Not required.
Required for contracts exceeding
EC$20,000 (US$7,407 equivalent)
Table 5. Provisions relating to Performance Security in OECS group
Locally funded contracts
Externally funded contracts
OECS Country
Format of
Performance
security
Goods
Works
Goods
Works
Dominica
Bank guarantee
Not required.
Required only
for major
contracts.
Grenada
Bank guarantee
Not required.
Not required.
St. Kitts and Nevis
Bank guarantee
St. Lucia
Bank guarantee
10% of contract
price.
Not required.
10% of contract
price.
Not required.
St. Vincent and the
Grenadines
Bank guarantee
or cash deposit
Not required.
Not required.
Required only for
major contracts.
5 to 10% of
contract price.
10 % of contract
price
10 % of contract
price
5% of contract
price
Not always
required.
Required only for
major contracts.
5 to 10% of
contract price.
10% of contract
price.
10% of contract
price.
5 to 10% of
contract price.
Not always
required.
2.25 If advance payments are made as per terms of the contract, a Bank guarantee is
obtained from suppliers and contractors, who experience no difficulty obtaining this
guarantee.
2.26 In the case of Dominica, St. Kitts and Nevis, regulations provide for the
publication of contract award information in the Gazette; however, in practice this is not
being followed. In Grenada and St. Lucia, there are no legal requirements for publication
of contract award information and so in practice it is not done. Further, throughout the
OECS group, unsuccessful bidders are informed they had not succeeded, but they are not
provided with information about the name of the winning bidder or contract price. The
general public is not notified of the description and amount of the contract, or the name
of the successful bidder. There also is no requirement for publication of summary
18
Instruction 318 read with Instruction 334 of the St. Kitts and Nevis Financial Instructions 1983.
Regulation 13 read with Regulation 16 of the St. Lucia, the Procurement and Stores Regulations 1997.
20
Rules 6 and 7 read with Rule 2 of the St. Vincent and the Grenadines, the Purchases and Tenders Procedure issued in 21 November
1967 under circular No. 32/67.
19
14
information relating to public procurement. Further, in actual practice, no information
relating to public procurement is published. (See also paras 2.48, 3.14 and 3.25 below.)
D. Findings on Monitoring and Contract Management
2.27 Contract monitoring practice is based on contract type and varies by institution. It
is not based on professionally developed protocols and does not follow best international
practice.
2.28 Countries in the OECS group, have no guidelines or instructions requiring that
procurement tenders be based on detailed or even preliminary engineering design of
project components, use of a price adjustment clause in bidding documents where
appropriate, and how to deal with requests for contract extension. Also there are no
guidelines covering when and how price variation should be determined. The lack of
such guidelines often leads to unnecessary contract amendments and expenditures, with
unwarranted costs, frequently in the form of additional compensation to the contractors.
The following statements apply to the OECS group:
2.29 Poor quality contract management and “on-site” monitoring contributes to cost
overruns and substantial project implementation delays.
2.30 Lack of appropriate link between budget and updated annual procurement plan
and financial resource planning has caused delayed payments to contractors and
suppliers.
2.31 Untimely release of counterpart funds has caused project implementation delays
and delayed payments to contractors and suppliers.
2.32 Delayed payments to the contractors and suppliers by the government often
happen. This results in suppliers-contractors adjusting prices upward in their bids to
cover the cost of delays.
2.33 In reality no contractor complains about the procurement process for fear of
informal sanctions resulting in no future contract awards.
2.34 Contractors are not held accountable for implementing and delivering based on
terms stipulated in the contract. Contract clauses are not duly enforced.
E. Recommendations on Procedures and Practices
Short-term Actions
15
2.35 The practice of using registration lists (or informal lists in Grenada), as eligibility
for tendering should be discontinued to encourage open competition and transparency.
Bidding should be open to all eligible bidders with due post-qualification. Wherever
appropriate, pre-qualification could be carried out to ensure that only qualified bidders
are permitted to submit bids.
2.36 All tenders valued at more than EC$250,000 (US$92,593 equivalent) should be
advertised in at least two national newspapers of wide circulation as well as in the
Government Gazette of the OECS country. The advertisement should be issued at least
four weeks before the deadline for submitting bids for goods and works, with at least onemonth’s notice for consultant services. All other tenders should be posted on Notice
Boards of procuring entities and other public places, and advertised in the Government
Gazette as well as in a specialized web-site to advertise bidding opportunities and results.
2.37 Standard Bidding Documents (including detailed evaluation criteria) and Standard
Pre-Qualification Documents for procurement of goods and works under NCB and ICB
procedures, as well as Standard Requests for Proposals for selecting and contracting
consultants to meet international standards, should be developed as a priority.
2.38 Procedures that administratively separate contracting, monitoring, and auditing
should be prepared for accounting officers of procuring entities to follow to ensure public
accountability.
2.39 Bid evaluation for procurement of goods should explicitly incorporate the policy
of “lowest evaluated cost.” The use of a merit point system in bid evaluation should be
prescribed only for exceptional cases.
2.40 Evaluation committees should evaluate all tenders. The Committee (or Tender
Boards) should include representatives from the legal, financial, procurement, and
technical/engineering communities. Negotiations with the lowest evaluated, substantially
responsive bidder should be forbidden.
2.41 The method for determining price adjustment during contract execution should be
incorporated in the contract based on provisions in the bidding documents. The formula
method is preferable to documentary evidence.
2.42 The Government should consider contracting international procurement agents of
high reputation to assist in medium- and large-scale contracting until sufficient capacity
is built to carry out this function.
2.43 The Government should require all project implementing authorities to prepare
proper procurement plans, linked to financial planning and budget processes.
Medium Term Actions
16
2.44 Detailed procedures for monitoring contract execution should be developed that
include all stakeholders, especially the beneficiary communities.
2.45 The effectiveness of the current procurement filing system in all public entities
needs to be reviewed and restructured to ensure transparency and accountability, drawing
on international best practice, including development of a new filing system for all
procurement activities. This should include a basic procurement-training program that
includes records management.
2.46 The Government should ensure that Project Implementation Units (PIUs) enforce
performance security and collect liquidated damages from delinquent suppliercontractors. The Government also should issue detailed procedures about what actions
procuring entities should take against delinquent supplier-contractors.
2.47 A procurement manual should be developed delineating the evaluation criteria
philosophy. Evaluation criteria should be clearly spelled out in the bidding documents
and bid evaluation and contract award should strictly comply with them. Bid evaluation
for works should only be expressed in economic terms. If time is a critical factor, the
value of early completion to the employer should be taken into account using criteria
expressed in the bidding documents, provided the contract conditions include
commensurate penalties for noncompliance.
2.48 The Government should create a website, open to the public, for advertising all
public bidding and posting results of every contract signed by public sector entities. (See
also para 2.26 supra and paras 3.14 and 3.25 infra.)
2.49 The Government should ensure that Registration of Assets in the accounting
system is up-to-date. This would facilitate “End-Use Audit” of goods and works to
ensure assets are used for the purposes specified.
2.50 Countries in OECS group should harmonize their procurement procedures and, if
possible utilize the same standard bidding documents (SDB)
2.51 Countries in OECS group should create an Electronic Procurement system to
speed-up and open opportunities to a broader number of suppliers resulting in better
economy. Such system could cover all countries in a joint effort, working as a common
market place for procuring goods, works and services that do not require submission of a
signed technical proposal.
17
3. ORGANIZATIONS AND RESOURCES
A. Organizations: Tender Boards, Ministries/Departments, Parastatals and Local
Governments
Findings
3.1
Generally, procurement decision-making responsibility does not reside with the
government ministries, departments, or agencies in countries of the OECS group. This is
because all contracts for goods and works beyond small monetary thresholds require the
approval of the Central Tender Board (CTB) or the Minister and/or Cabinet based on
Regulations and Rules. While current practice differs considerably, there is still no
significant administrative autonomy in procurement decisions assigned to individual
ministries. (See Table 1. Procurement Decision Making in the OECS Group below
para 1.6 supra).
3.2
Many levels of bid examination are required and procedures for contract award
are cumbersome. Approvals for nearly all contract awards are required from the
Minister/Cabinet if contracts exceed low thresholds, ranging from EC$50,000
(US$18,518 equivalent) in the case of Dominica, to EC$100,000 (US$37,037 equivalent)
in the case of Grenada and St. Kitts and Nevis. For St. Lucia and St. Vincent and the
Grenadines, the approval of the CTB is required for contracts exceeding EC$100,000
(US$37,037 equivalent) and EC$250,000 (US$92,593 equivalent), respectively. More
devolution of procurement decision-making and accountability to career professionals
seems desirable in Dominica, Grenada and St. Kitts and Nevis. In addition, AOs in each
ministry should have the authority to give final approval for contract award.
3.3
There are no mechanisms for periodic review of procurement thresholds. In fact,
threshold revisions apparently are ad-hoc, at no prescribed intervals, with current
thresholds established years ago.
3.4
The ministries, departments, and agencies play a number of procurement roles.
First, they are responsible for their own procurement planning--though this is not done in
practice. They also prepare bidding documents, issue invitations, receive and evaluate
bids, and submit recommendations to the ministry or agency contract committee. Finally,
they have full procurement authority below designated thresholds; however, the
thresholds are low.
Recommendations: Short-term Actions
3.5
MOF should raise the threshold for referrals to the CTB/Minister and the Cabinet,
and delegate more procurement decision-making authority to project executing agencies
(ministries, statutory bodies, and others).
3.6
MOF should prepare and provide training in procurement planning and
subsequent control and monitoring of procurement actions based on a pre-approved
18
procurement plan. Training specifically should include workshops for procurement
personnel. Bank technical assistance (TA) could be sought for this training.
3.7
MOF should reconsider the budget process for allocation and timely release of
counterpart funds in amounts adequate to meet contractual obligations with contractors,
suppliers, and consultants to ensure efficient and economic project implementation and to
avoid generating claims.
Recommendations: Medium-term Actions
3.8
The OECS member countries should adopt a procurement organization which
balances the need for greater decentralization of decision-making authority with the
benefits, particularly obvious in small countries, of bulk procurement for selected items.
Clearly, this approach would need to be tailored to reflect the different sizes of the
countries’ economies and governments. Generally, procurement authority should not rest
with the CTB, the Minister of Finance, or Cabinet, but should be delegated to line
ministries and other public sector procuring entities. Ministerial/departmental tender
boards should be established (or strengthened, where they already exist) and formally
delegated the authority to approve contracts awards without referral to any other
authority. A full delegation of responsibility should be supported by a sound regulatory
framework, standard documents, strong internal controls, and appropriate capacity, as
discussed above.
3.9
At the same time, the OECS countries should consider establishing in the
Ministries of Finance appropriately staffed units responsible for carrying out procurement
of certain goods such as, for example, paper, printing services, spare parts, and other
items required by all government entities on a recurrent basis. The heads of these units
should be experienced procurement professionals responsible for the entire contracting
process on the basis of annual procurement plans prepared by the government entities,
without requiring further authorization. The centralized units could also be utilized as a
service to public sector entities to procure large contracts for other items, when the
beneficiary has no in-house capacity (e.g. for exceptional needs of ministries which
typically carry out very limited procurement). In addition, these units could be
responsible for managing donor-financed procurement, provided they develop
appropriate capacity. Other goods such as, for example, diesel fuel for electricity
generation, construction materials, and text books could instead be procured by
appropriate specialized regional units operating under the OECS umbrella. This
approach would likely strengthen the OECS group’s collective bargaining position with
international suppliers, increase efficiency of procurement, and improve economies of
scale.
3.10 It would be essential that the DOAs conduct regular audits to ensure that
resources were used properly, procedures followed, and the Government receives value
for money.
19
3.11 The Cabinet should not be involved in the procurement process except for
politically sensitive contracts (e.g. involving national security matters), or contracts for
very high amounts. As a minimum, its role should be phased out in the medium-term and
strictly limited, in the interim, to a review of the legality of the process based on a
standard evaluation report. The Cabinet’s opinion should be rendered within a very short
time period after which its concurrence should be assumed as implicit. These matters
should be addressed in the revised regulatory framework which should provide for a clear
phase out strategy (e.g. thresholds would be revised upwardly every year until the
Cabinet ceases to exercise the role).
3.12 The revised regulatory framework should include secondary sources of
procurement rules as administrative regulations and guidelines for establishment and
operation of the ministerial/departmental tender boards.
3.13 The oversight/policy authority should play no role in administrative review of the
decisions made by the ministerial/departmental tender boards or in adjudicating
complaints from bidders. The new procurement legislation should provide an
independent appeals system that would address complaints from bidders and provide
remedies against actions counter to the new legislation.
3.14 A public information system should be established to ensure that, inter alia: (i)
bidding opportunities are advertised at the beginning of the fiscal year, with periodic
updates; (ii) bidders are kept up-to-date on the status of their bids or if delays are
expected; (iii) results of contract awards are publicly announced (name and amount of
contract); (iv) announcements of future public bids (short and medium term); (v)
historical data about contract awards; and (vi) legal requirements for presentation of bids.
The Compranet system, established by the Government of Mexico, is a working example
of this type of system. (Website: http://www.compranet.gob.mx/). (See also paras. 2.26,
and 2.48 supra and paras. 3.25 infra.)
B. Resources
Findings
3.15 Procurement is not treated as a profession on a level with accounting and banking
in the OECS group. For example, there is no professional degree in procurement
available in OECS universities. For this reason, there are no professional standards,
expectations, or associations specifically for procurement specialists. In government
ministries, departments and parastatals, the procurement profession is not held in high
regard, instead is being treated as equivalent to a position like administrative assistant;
and occasionally an engineer is assigned the procurement function as an adjunct to
his/her normal duties.
3.16 Most procurement officials gained their procurement skills on the job, though
some have had training of a few weeks or months in seminars organized by CDB, EU,
and the World Bank, among others. There is a shortage of qualified and well-trained staff
20
in procurement in ministries, departments, and parastatals. They are limited in number
and most of them lack minimum required training and experience.
3.17 One of the basic reasons for the low quality of public sector procurement
knowledge is the low state of civil service training in public procurement procedures.
Two compelling reasons are inadequate funding and the scarcity of qualified trainers.
3.18 Salary and emoluments of procurement professionals are the same as other civil
servants and depend on grade level. In most agencies, pay levels of top procurement
officers are lower than professionals involved in project execution.
3.19 Finally, career advancement is not sufficiently related to performance or
qualifications but instead is a matter of seniority. The promotion system as it stands
appears highly discretionary to many civil servants.
3.20 There also is no code of ethics for government employees or for that matter for
procurement personnel. However, the Civil Service Staff Orders include guidelines
pertaining to conduct and discipline of public officers. These include prohibitions against:
(i) providing unauthorized information, divulgence of confidential and secret
correspondence; (ii) accepting gifts and gratuities of any kind and taking bribes; and (iii)
engaging in private commercial activity or work, trade, investment, and other nongovernment related work, except with the specific approval of the Establishment Division
of the Government. These do not deal with disclosure of conflicts of interest, and if the
employee becomes aware of it at the beginning of the procurement process, immediately
disqualifying himself/herself from participation in the procurement process.
3.21 During the last 14 years, some member states of the OECS have been
consolidating their common requirements for pharmaceuticals and medical supplies,
procuring them through an administrative unit of the OECS, known as the Eastern
Caribbean Drug Service (ECDS) (see Volume II, Annex 3). The objective is economy
and efficiency - i.e. economy of scale and service - to improve their leverage as a buyer
on a bulk basis. The ECDS has been reorganized as Pharmaceutical Procurement
Services Unit (PPS) of the umbrella organization, OECS, since July 2000. Based on the
participating states’ perception, it has provided fairly reliable supplies, though there are
occasional lapses, however the ECDS/PPS arrangement has serious shortcomings from
the point of view of economy, efficiency and transparency (see Annex 3).
Recommendations: Short-term Actions
3.22 An assessment of the human resource base of procurement professionals in the
ministries, departments, and agencies should be undertaken. This assessment should
cover and anticipate needs arising from reorganizing and streamlining purchasing and
contracting divisions as well as project implementation units (PIUs).
3.23 Measures should be taken to create and strengthen professional procurement by
restructuring pay scales in tandem with recruitment and hiring of qualified, motivated
21
personnel of high integrity, in the interest of fostering professionalism and curbing
corruption.
3.24 It also would be beneficial to: (i) improve the existing PPS arrangements for
procurement of drug and medical supplies using internationally-accepted bidding
documents and processes to promote transparency and competition; (ii) assign
procurement agents (ECDS/PPS) responsibility to not only collect service charges but
also to undertake the role of intermediary by making payment to the supplier, as the
contract is between ECDS and the suppliers (currently payments are made by the
participating country on receipt and acceptance of goods to PPS’s account in the East
Caribbean Central Bank, the payment received being passed on by PPS to the supplier);
and (iii) expand it to other commodities, such as office supplies and equipment. The
experience of the PPS should be further assessed to determine whether better economies
of scales and bargaining positions could be achieved by centralizing bulk procurement of
some items such as, for example oil and construction materials.
Recommendations: Medium-term Actions
3.25 The regional and national policy authorities should establish helpdesks using
various media, i.e., e-mail, telephone, and Internet web site, containing all documents and
guidelines from the Procurement Manual. (See also paras. 2.26, 2.48 and 3.14 supra.)
3.26 There should be formal recognition and rewards, both monetary and symbolic
(e.g., certificates and plaques) to formally recognize meritorious service on an annual
basis and enhance the status and self-esteem of procurement professionals.
3.27 Training resources should be increased for public procurement staff along with
the introduction of a procurement professional certification program. This will require a
new career path at an appropriate professional grade level for civil servants who obtain
professional certification.
22
4. AUDIT AND ANTI-CORRUPTION MEASURES
A. Audit
Findings
4.1
Under the Constitution as well as the Audit Act of each OECS country reviewed,
the Director of Audit (DOA) is required to conduct independent audits of the accounts
and effectiveness of programs to ensure that: (i) Government accounts are being
faithfully and properly kept; (ii) rules and procedures framed and applied are sufficient to
provide an effective check on the assessment, collection, and proper allocation of
revenues and receipts of the Government; (iii) all monies expended and charged to an
appropriation account have been used strictly according to the provision made by
Parliament, and that any payment of public money conforms to the authority that governs
it, and was incurred with due regard to avoiding waste and extravagance; (iv) essential
records are maintained and rules and procedures framed and applied sufficiently to
safeguard the control of government property; and (v) satisfactory procedures have been
established to measure and report on the effectiveness of programs and services. The
DOA oversees the accounts of the Government and the public entities, reports
irregularities and defective vouchers to the Parliament annually, and is empowered to
make special reports to the Parliament when needed.
4.2
Based on their Constitution, the Finance Administration Act, and the Audit Act,
the Accountant-General prepares, certifies, and submits to the Director of the Audit
(DOA) the accounts of the Government for that financial year within six months of the
close of the financial year (three months in the case of Dominica and St. Lucia). The
Minister of Finance, by written direction, may extend the period within which the
accounts are submitted, with any direction given provided to the House of Assembly
within 30 days of issuance. If the House Assembly is not in session, any direction given
shall be presented within 14 days of the beginning of the next session. The DOA must
submit to the Minister of Finance, no later than three months from the date of receipt of
the financial statements from the Accountant General, certified copies of those
statements. The Director of Audit shall submit to the Minister of Finance, no later than
three months from the date of receipt of the financial statements from the Accountant
General, certified copies of those statements 21.
4.3
The DOA of each OECS member country also is required to submit a report22 at
least once a year on work, findings, and any other matter pertaining to the accounts. This
21
Commonwealth of Dominica: Article 72 of the Constitution 1978; Section 17 of the Finance Administration Act 1984 and Section 6
of the Audit Act 1994; Grenada: Article 82 of the Constitution Order 1973, Sections 9 and 10 of the Finance and Audit Act 1964; St.
Lucia: Article 84 of the Constitution, Section 16 of the Finance Administration Act 1997 and Sections 6 and 7 of the Audit Act 1988;
St. Kitts and Nevis: Article 76 of the Constitution order 1983: Section 15 of the Finance Act 1990; and Sections 6, 7 and 11 of the
Audit Act 1990.
Section 17 of the Finance Administration Act 1984 and Section 6 of the Audit Act Audit Act
22
The DOA’s report is to the House Assembly and it is not a DOA’s submission to the Minister of Finance. The Minister of Finance
submits the report to the Speaker of the House Assembly, who shall then lay it on the Table of the House Assembly. At this stage, the
roles of the Minister of Finance and the Speaker are purely that of a conduit.
23
report is to be provided to the House by the Ministry of Finance seven days after
receiving it. If the Minister of Finance fails to do this, the DOA is expected to transmit
copies to the Speaker, who in turn would present them to the House.
4.4
The Governments of Grenada, St. Lucia, and St. Vincent and the Grenadines are
considerably behind in the preparation, certification, and submission of annual financial
accounts and audit reports to the House Assembly (see Table 6).
Table 6. OECS Group: Status of Preparation and Submission of Government
Financial Accounts and Audit Reports.
OECS Group
Annual Financial
Accounts of the
Government for
Fiscal Year
ending:
Date corrected/
certified
accounts
submitted by
Accountant
General /MOF to
DOA
Date of submission
by DOA to MOF
with certification
Date of
transmittal by
Minister of
Finance to House
Assembly for
consideration
Dominica
June 30, 1999
September 30,
1999/ February
2000
March 29, 2000
April 2000
Grenada
(i) Dec. 31, 1992
(ii) Dec 31, 1993
(iii) Dec 31, 1994
(i) Nov. 1997
(ii) Dec.1997
(iii) Mar. 1999
(iv) Special Audit
Report on Ministry
of Works,
Communications
and Public Utilities
(i) Nov. 30, 1997
(ii) Dec. 31, 1997
(iii) March 31, 1999
(iv) March 31, 1999
(i) Sept. 22, 1998
(ii) Sept. 22, 1998
(iii), and (iv) Status
of Action not known
to DOA
St. Kitts and Nevis
Dec. 31, 1999
Submission date not
available
Sept. 29, 2000
October 2000
St. Lucia
(i) Mar. 31, 1996
(ii) Mar. 31, 1997
(i) Around Nov.
1998
(ii) Not completed
as of Nov. 2000
(i) Nov. 18, 1998
(ii) Not applicable as
DOA has not received
certified accounts
from the Accountant
General.
(i) On the table of the
House – date not
available
(ii) Not Applicable
St. Vincent and the
Grenadines
(i) Dec. 31, 1995
(ii) Dec. 31, 1996
(iii) Dec. 31, 1997
(i) October 1999
(ii) June 1999
(iii) June 1999
(i) Nov. 3, 1999
(ii) June 30, 2000
(iii) June 30, 2000
(i) June 2000
(ii), and (iii)
December 2000
4.5 Until 1986, the Grenada accounts were 20 years behind. In 1983, the Interim
Government took the decision to bring the Government accounts up-to-date. Profiting
from Technical Assistance from the UK to the Accountant-General and the Director of
Audit government accounts were completed to 1992, and now are current through 1994.
The 1994 Audit Report and the Statement of Accounts was submitted to the Finance
Minister on March 31, 1999 for tabling in the House Assembly, but with no response as
24
of December 1, 2000.
4.6
In St. Lucia, the Accountant General has not submitted audit reports since 1996
(i.e., April 1996 to March 1997).
4.7
In St. Vincent and the Grenadines, the Audit Report is an integral part of the
Accounts documents and must be submitted to the House Assembly together. Over the
years, the audit has been 5 or 6 years behind schedule.
4.8
Based on information provided by Grenada, St. Lucia and St. Vincent and the
Grenadines, their respective Ministers of Finance have not extended the period for
submitting government accounts; and such instructions, if any, were not tabled in the
House. Further, if Ministers of Finance fail to table reports submitted by the DOA in the
House within the specified time, the DOA must discharge a statutory responsibility by
sending the reports to the Speaker of the House for presentation.23 The DOAs have not
done this in Grenada, St. Lucia, and St. Vincent and the Grenadines (see end para. 4.3).
4.9
Under the Standing Orders of the House Assembly (or Representatives), a Select
Committee of Parliament, the Public Accounts Committee (PAC), with no less than three
and no more than five members, is elected by the House. The role of the PAC is to
examine the audited accounts of the State as well those of corporations, Boards, and other
bodies appointed by the Government, and prepare a report for the House. Under the
parliamentary system of government, any questions about whether public expenditures
meet generally accepted standards of financial prudence and propriety are settled through
deliberations by the PAC. The financial accountability of public servants and Ministers
also are enforced through the PAC. Thus, a well functioning PAC is needed to enforce
financial accountability of civil servants and Ministers of State.
4.10 In Grenada, the PAC examined the Statements of Accounts for 1991 and the
DOA’s report. Accounting officers were summoned to explain matters pertaining to their
Ministry/Department. Subsequently, the report was put before the House. The 1992
Audit Report was referred to the PAC but not dealt with. The 1993 report was not
referred to the PAC, though it was put before the House on September 22, 1998.
4.11 In St. Lucia, the PAC, which comprises five members, does not function. Of the
16 members of Parliament, until recently, all belonged to the ruling party. Now one
member has become leader of the opposition party who is also the chairperson of PAC. .
4.12 In St. Vincent and the Grenadines, the PAC comprises seven members [four from
Government (three Senators and one Minister) and three from the Opposition, including
the Chairman]. The PAC does discuss the Audit Report; however, the number of PAC
meetings has been declining over the last three years: FY 1998, three meetings; FY 1999,
two meetings; and FY 2000 one meeting.
23
This could be one of several kinds of reports, namely certified accounts of the Government, audit reports on the annual accounts of
the Government, special audit reports, or special reports on any matter with which he is concerned.
25
4.13 In St. Kitts and Nevis, the PAC was established for the first time in 1997.
According to available information, it has yet to meet. The DOA appealed to the
Parliament in his Audit Report, dated September 30, 1999, asking for a meeting on the
subject.
4.14 In Dominica, the PAC last met in November 1999 . According to available
information, the PAC so far has not been effective in carrying out its role as a watchdog
over parliamentary financial control.
4.15 The DOA is the only formal institution that verifies whether the procurement
authority, expressed in monetary terms in the Procurement and Stores Regulations (PSR),
is being adhered to, regardless of whether the procurement is locally or externally funded.
DOAs do not go into the procurement process, but request copies of contracts relative to
expenditures; and inquire whether Government Ministries and agencies make payments
according to the terms of the contract. DOA checks on cost overruns, time overruns, and
variations in orders, and then decides whether to audit an item. Audits are invariably done
on expenditures under procurement contracts involving a number of contract variation
orders. All DOAs have expressed concern that there is a major problem with the
procuring entities adhering to the tendering process prescribed under the
Regulations/Rules. The procurement processes generally are not conducted as described
under the Regulations/Rules. Contracts are awarded without due process for all nonexternal as well as external/donor-funded projects where such agencies are not vigilant as
to compliance with their guidelines.
4.16 The DOAs lack the staff and resources to pursue compelling or blatant
procurement problems. DOAs are fully aware of these constraints. While they have the
authority to request more resources, there is no political interest or motivation to meet
such requests. Only in St. Vincent and the Grenadines is there a public debate in
Parliament on DOA’s reports; however, in general, there are no mechanisms for follow–
up action.
Recommendations - Short-term Action
4.17 The Governments of Grenada and St. Lucia should take action to put on the
Tables of their respective House Assemblies (or House of Representatives) the reports
already submitted by the DOA to their respective Ministers of Finance.
Recommendations – Medium -term Action
4.18. Adequate training should be provided to staff of the Accountants-General and the
DOAs to strengthen the accounting and auditing functions. Furthermore, the capability of
the Accounts and Audit functions should be augmented through the purchase of
technology (e.g., computers, networks, computerization of functions), in addition to
additional trained staff.
26
B.
Anti-Corruption Measures
Findings
4.19 There are no special laws relating to prevention of corruption in public
procurement, except, for example, criminal laws and procedures act, and the criminal
code. Consequently, an aggrieved party who alleges that public officials resorted to acts
of bribery or corruption in the award of procurement contracts, and/or allegedly suffers
from denial of award of procurement contract regarding bidding documents issued to
bidders, should make a complaint under the applicable law/regulations to the police, or
take up the matter with the Public Service Commission for disciplinary action by the
responsible public official(s).
4.20 Discussions held with several Ministers of the OECS group, the Chambers of
Industry and Commerce, the Association of Consulting Engineers, and individual
consulting firms revealed a consensus of opinion. All expressed their concerns as to
bribery, corruption, and fraud involving public exchequer in procurement contracts. As
most procurement is done on a selective-tendering basis obtaining three quotations, there
could be collaboration: (i) among the short-listed contractors/suppliers and/or (ii)
between contractors/suppliers and public officers and politicians to defraud the
government.
4.21 Some of the PSs complained that procurement rules were outdated24 and, in any
case, have not been followed for years. From a purely operational standpoint, there are
no written rules on how to organize and conduct public procurement.
4.22 Almost all contracts under local funding and, if possible, external funds are
diverted to selective tendering procurement. Some PSs of Ministries have alleged that
there is interference in the short-listing of the final three contractors. Moreover, a few
senior staff stated that often the PSs are told who will receive the contracts.
4.23 In Dominica and St. Kitts and Nevis, the CTB is not functioning, as required
under the regulations and rules, to approve contracts for goods and works above
prescribed thresholds. (See paras 1.4 and 1.5 and para 1.6 supra for details.)
4.24 In St. Kitts and Nevis, even for major procurement of fuels and lubricants
(estimated cost of EC$12 million per year) there was no formal meeting of the CTB. The
technical officer from MOF prepared the comparative table of bid prices and the bid
evaluation report. Thereafter, the officer interacts informally with the PS/MOF,
PS/MOCWT, the Accountant General, and the Director of Works, obtaining their
comments informally. (It should be noted that PS/MOF, PS/MOCWT, the Accountant
General, and the Director of Works would be members of a normally constituted CTB,
had such a CTB been constituted and its meeting organized.). Thereafter, the officer
sends the recommendation for contract award to the Cabinet via the Ministry of
24
The revisions made in 1997/1998 to the Procurement and Stores Rules in Grenada and St. Lucia do not have significant departures
from the very old system according to the Directors of Audit.
27
Communications, Works, and Transport. Not convening a formal meeting of the CTB-with a structured agenda, discussion, evaluation, and recommendation based on open
deliberations on all aspects of the proposal, and open voting based on each
person’s/department‘s functional responsibilities and professional capabilities--is a
shortcoming in terms of transparency, and “rule of law.”25
4.25 The Attorney General in two of these countries expressed concern and decried
corruption in public procurement. They stated that to avoid corruption proper monitoring
and pluralistic control mechanisms would be required given the inherent power of the
Government to affect the outcome of all procurement decisions.
4.26 Concerns also were voiced by Chambers of Commerce about the void in
legislation and legislative proposals with respect to: (i) a Corruption Prevention Act; (ii)
the establishment of a Commission for Prevention of Corruption in countries of the
OECS group reporting directly to Parliament; and (iii) a Freedom of Information Act.
Such actions, if taken, would promote three fundamental anti-corruption measures:
accountability, openness, and public participation in procurement.
4.27 The introduction and enactment of new legislation in the three areas cited in the
above paragraph would help promote the climate for economy, efficiency, competition
and transparency in procurement and help eliminate the breeding ground for corruption
and enable the Government to obtain value for money in procurement. Although there
have been no tangible initiatives in this direction, there is broad evidence from segments
of civil society as well as from some of the highest political bureaus of government that
there is a general desire for good governance.
4.28 Bidding documents contain no provisions against fraud and corruption--with the
notable exception of a few multilateral-financed procurement contracts. No action has
yet been taken by the governments to add clauses to the bidding documents that
specifically prohibit bribery.
4.29 It is not easy for bidders to report solicitation of bribes or extortion attempts by
government officials. The Financial Regulations have no provisions on how aggrieved
bidders can ventilate their grievances. Generally, bidders do not complain for fear that
even if the case is won, they might never again be permitted to bid on a project in that
agency.
4.30 The existing procurement regime contains no code of ethics governing the
behavior of public employees. None of the agencies visited had a formal written code of
ethics dealing with matters such as disclosure of conflict of interest, and withdrawal from
participation from particular procurement process where they had a personal or pecuniary
conflict. Only the Civil Service Staff Orders (CSSO) in each OECS group contains
prohibitions against: (i) receiving “corrupt gifts and payments of commission” by
contractors, and (ii) accepting gifts or other favors of any kind by public officers. These
25
Rule of law requires absence of informality.
28
Orders focus on disciplinary action, suspension, removal, dismissal, and other penalties,
but do not include anything resembling a code of procurement conduct or public ethics.
Unfortunately, even these provisions are not always judicially enforced. Reportedly, no
one has been charged and found guilty of such offenses and punished.
Recommendations
4.31 To respond to the general public expectation for good governance, the
introduction and enactment of a new legislation relating to Prevention of Corruption and
the Freedom of Information, as well as the establishment of the Commission for
Prevention of Corruption would help promote the climate for economy, efficiency,
competition and transparency in procurement, eliminate the breeding ground for
corruption, and enable the Government to obtain value for money in the procurement
process. The creation of a reporting system (like a hot-line) with open access for
reporting cases of corruption to be investigated is also highly recommended.
29
5. PERFORMANCE ON BANK-ASSISTED PROJECTS
5.1
The review of 62 loans extended by IBRD/IDA for projects in the OECS revealed
that 31 loans were closed, leaving 31 loans covering 17 active projects in multiple
countries as of April 13, 2003. The active portfolio comprise the following: OECS
Telecommunications Reform Project (five OECS countries), Disaster Management
Project (four OECS countries – except Dominica), Emergency Recovery Project (five
OECS countries), OECS Waste Management Project (five OECS countries - St. Lucia
national component & regional component still active), HIV/AIDS Prevention and
Control Project (Grenada and St. Kitts and Nevis), Education Project (St. Kitts and Nevis
and St. Lucia), Poverty Reduction Fund Project (St. Lucia), and Water Sector Reform
Project (St. Lucia). The total commitment of the portfolio is of US$147.4 million, of
which US$75.4 million was disbursed.26 The current active portfolio has total
commitment of $98.6million, of which $61.6million is undisbursed.27
5.2
The OECS Country Assistance Strategy (CAS) notes that the Bank’s portfolio in
the OECS is fairly young, with an average implementation age of 2.3 years as of endJune 2002 (FY02).28 The portfolio, in terms of net commitments, increased twofold,
from its end-FY98 level of US$41 million to US$78 million by end-FY02. Despite
adequate government ownership of many Bank-supported initiatives, systemic problems,
such as lack of counterpart funding, understaffed Project Management Units (PMU),
weak procurement practices, and slow coordination among the OECS countries have
affected portfolio performance. These challenges notwithstanding, recent solutions to
problems of coordination and more effective Bank supervision have led to steadily
increasing disbursements, i.e., an increase of the disbursement ratio from 6% at endFY97 to 25% in FY02. Further, in terms of lending, the Bank is moving towards
grouping similar operations under sub-regional umbrella mechanisms, while still shaping
projects to meet the special needs of each country (e.g., the existing Disaster Mitigation
program, the Caribbean HIV/AIDS Prevention and Control Program, already negotiated
and the Education Reform program now under preparation). Implementing projects in
this way is cost effective and promotes sub-regional integration, which ultimately pools
resources from the member countries and allows them to reach national and sub-regional
priorities.
5.3
Project supervision reports indicate inadequacy (or lack) of procurement records
and lack of procurement capacity in various projects subject to project supervision, and a
few projects where post review was conducted. As a result of the recent post reviews
conducted between August 14 and 18, 2000, there was one case of misprocurement,
26
Comprising of (i) 24 IDA credits for a principal amount of XDR 52.35 million of which XDR 36.77 million has been disbursed; and
(ii) 38 IBRD loans for a total principal amount of US$75.49 million of which US$24.92 million has been disbursed as of February 19,
2003. Converted to US$ equivalent at exchange of 1 XDR = US$ 1.373000.
27
Comprising of (i) 13 IDA credits for a principal amount of XDR 18.50 million of which XDR 7.30 million has been disbursed; and
(ii) 18 IBRD loans for a total principal amount of US$50.70 million of which US$9.32 million has been disbursed as of February 19,
2003. Converted to US$ equivalent at exchange of 1 XDR = US$ 1.373000.
28
World Bank fiscal years (FY) run from July 1 to June 30. For instance, the current fiscal year 2003 (FY03) runs from July 1, 2002
to June 30, 2003.
30
detailed below.
OECS Ship-Generated Waste Management Project, Regional component TF 028600. In
regard to the Global Environment Trust Fund Grant Agreement for the Ship-Generated
Waste Management Project (the Regional GEF Grant Agreement) among Antigua and
Barbuda, the Commonwealths of Dominica, Grenada, St. Kitts and Nevis, St. Lucia, St.
Vincent and the Grenadines (collectively the recipients) and the Bank as the trustee (the
Trustee) of grant funds, a Bank Mission conducted financial and procurement postreview in August 2000. As a result of this Mission, the Trustee concluded that the
procurement procedures specified in the grant agreement were violated in regard to the
procurement of computers, computer peripherals, communication equipment, office
equipment, etc. valued at US$37,919.23. Accordingly, the recipients were required to
refund the Trustee for deposit into the GEF trust account the amount of US$37,919.23 by
November 1, 2000.
5.4
The Implementation Completion Reports (ICR), the Performance Audit Reports
(PAR), and the Project Supervision Reports highlight important procurement
performance concerns as:
(a) lack of inappropriate planning has lead to uneconomic procurement in nearly
all projects.
(b) limited institutional capacity of implementing agencies coupled with lack of
adequate organizational arrangements for implementing projects,
(c) poor contractor performance,
(d) lack of technical skill in areas of procurement planning and internal control,
(e) unsatisfactory record keeping, with incomplete files and improperly organized
correspondence,
(f) cost overruns of up to 30%, in some cases coupled with minor time overruns,
and
(g) inadequate design and under-preparation leading to delays in project
implementation.
5.5
In the agencies reviewed, there were hardly any cases where project management
took measures against a delinquent contractor or supplier by enforcing the performance
security or collecting liquidated damages for delayed contract completion.
31
6. GENERAL RISK ASSESSMENT
6.1
There are serious risk issues in the current procurement systems in the OECS
countries. Guidance under procurement systems is scattered among numerous and
various outdated procurement regulations and procedures. There is lack of appropriate
legislation, shortage of basic skills, and inadequate organization. Also, there is no
appropriate legislative framework, a shortage of required basic procurement skills, and
inadequate organizational administration. The existing procurement regimes, in the form
of regulations and rules emanating from the Minister of Finance, do not have the status of
law, and as administrative instruments can easily be superseded without regard to: (i) the
concerns of economy, efficiency, competition, and transparency in procurement, and (ii)
the rights of suppliers/contractors. They contain no standard provisions normally
included in a standard procurement law similar to the UNCITRAL model. (See para 1.18
for details). For example, under government-funded projects, the existing procurement
procedures (e.g., approved list of suppliers, contractors and consultants, the general use
of selective tendering as the default procurement method) are not conducive to the
procurement of goods, works, and services, with due regard for competition and
transparency.
6.2
There are also delays in project execution because of lack of proper project design
and detailed engineering design before tendering for procurement contracts, lack of
adequately trained professionals, and weak project management in terms of procurement
planning, managing the bidding process, contract award and contract administration.
There is also untimely release of funds against allocations already made in the budget.
ICRs, Performance Audit Reports (PAR), and Project Supervision Reports (PSRs) have
confirmed these observations. Training of existing staff will need to receive top priority
in the areas of procurement, project planning, and project and contract management. If
this does not occur, needless delays and additional costs will doubtless result. Equally
important is that procurement should be recognized as a profession and compensated
accordingly to reduce, if not eliminate, turnover of key professionals to the private sector,
which generally provides higher salaries.
6.3
The appropriate solution would be to decentralize procurement functions to the
ministries, departments, and agencies, reduce the associated bureaucracy, and curtail
inefficiencies, with procurement oversight left to autonomous policy and regulatory
bodies. It is also important for the Government to take appropriate action to ensure this
takes place, as timely availability of budget, and payment of consultants, contractors, and
suppliers are essential for efficient and economic procurement. The overall assessment of
risk to implement procurement is rated “high.”
32
7. PRIVATE SECTOR
A. Commercial Regulations.
7.1
In the OECS group contract law is based on common law. Also, there is no
commercial code consolidating existing commercial laws to regulate the establishment
and activities of business organizations.
7.2
Trade under the OECS group is not yet liberalized, and there is need to obtain
import or export licenses for many items. The extent of foreign exchange control varies
from none to limited control. Persons are free to maintain their foreign exchange
resources abroad with no restrictions on its use.
7.3
In 2001, private consumption as a percent of GDP was 66% (i.e. about US$1159
million) and imports of goods and services were US$1,138 million. Exports of goods and
services were US$876 million. Goods exported from the OECS group include bananas,
beverages, clothing, cocoa, flour, fresh fruits, mace, manufactures, nutmegs, soap, sugar,
tobacco and vegetables. There is no legal requirement for pre-shipment inspection of
goods imported into the OECS group.
7.4
Generally, imported goods are not subject to quantitative restrictions, but import
duties are payable for all goods, except those specifically exempted by legislation. There
is a General Consumption Tax (GCT) and service charge across-the-board, with some
goods subject to an additional excise tax and environmental levy.
B. Commercial Practices
7.5
In the OECS group, the main importers of raw materials and finished goods are
private firms - raw materials are mostly imported by manufacturers, while retail outlets,
supermarkets, and trading companies import finished goods. There also are accredited
dealers for raw materials. Generally, there are no licensing requirements for importing
raw materials; they are imported on the basis of INCOTERMS, with payments through
letters of credit.
7.6
Private sector industries and firms use commercial procedures by placing orders
with known suppliers, with whom they have had previous and/or established
relationships, or by direct contracting or negotiations.
7.7
Most of the works contracts are selectively tendered based on detailed
specifications, bill of quantities, and the like. Three or four quotes are obtained and a
final decision to award contract is made based mostly on the track record of the firm.
7.8
The Eastern Caribbean Central Bank (ECCB) is in charge of regulating and
assessing the creditworthiness of banks and provision of foreign currency for import
transactions. Merchant banks usually issue letters of credit in US dollars. The merchant
33
banks purchase foreign currency from the ECCB. The importer pays for the foreign
exchange in Eastern Caribbean dollars at the applicable market rate, plus the bank
commission and service charge.
34
8. RECOMMENDED ACTION PLAN
8.1
Action Plan: The main deficiencies identified and subsequent recommendations
made in this report, will require development of both a short- and medium-term strategy
and action plan. A recommended Action Plan for the implementation of these
recommendations is delineated in Annex 1. Short-term actions are geared to improve the
legal and regulatory framework of the existing procurement systems in the OECS group.
The medium-term actions are intended to improve the overall procurement system, with
deeper changes in the legal and regulatory framework based on the issuance of a new
Procurement Law in each OECS group. This law would ultimately replace the existing
Regulations/Rules governing procurement by Government and its agencies.
35
Annex 1
Action Plan for Improving Public Procurement System in OECS group
Major Issue
Recommended Action
1. Outdated
regulatory
framework and
inefficient
institutional
arrangements for
policy oversight
and coordination
of capacity
building initiatives
.
Legal and Regulatory Framework
2. Current
Procedures and
Practices are not
conducive to
efficient and
transparent
procurement.
Procedures and Practices
Short Term Actions
1. Establish a high level task force to carry out
policy dialogue between the MOFs and other key
stakeholders on viable options for regional
harmonization.
Medium Term Actions
1. Adopt harmonized regulatory framework
2. Adopt consistent national laws and
implementing regulations (as applicable)
3. Establish regional policy oversight body
4. Establish national policy bodies to serve as
counterparts to the regional authority (e.g.
convert CTB, which should cease current
functions)
5. Implement institutional arrangements required
by bid protest system established by the law
Short Term Actions
1. Issue guidelines requiring:
• preparation of appropriate procurement
plans
• adoption of realistic budgets
• use of bidding documents with clear
post qualification requirements
• advertisement of contracts on a
regional basis
• prompt payment to contractors and
suppliers
• inclusion of technically competent staff
in evaluation committees
2. Adopt executive orders to support enforcement
of these actions
Medium Term Actions
1. Implement efficient, secure and transparent
procurement record management systems.
2. Develop a comprehensive set of tools to
facilitate implementation of revised procurement
Date
Agency in
charge
36
Major Issue
Recommended Action
system (e.g. standard bidding documents,
manuals, e-procurement strategy, etc.)
3. Develop contract administration tools and
capacity
3. Organization
and Resources are
not adequate to
perform
procurement in a
satisfactory
manner.
Organization and Resources
Short Term Actions
1. Raise substantially the thresholds for reference
to CTB and /or the Minister and/or MOF should
be substantially increased.
3. Eliminate or phase out role of Cabinet
4. Carry out a skill inventory exercise and a
training needs assessment
5. Assess feasibility of centralized bulk
procurement of selected items at the national and
regional level (the latter under the OECS
umbrella following further review of the PPS
Unit’s experience)
Medium Term Actions
1. Fully decentralize decision making to
procuring entities.
2. Develop and implement a comprehensive
regional capacity building strategy including
coordinated training programs, and development
of post-graduate studies in public sector
procurement
3. Develop a procurement career path in
coordination with wider civil service reform
4. Adopt code of ethics for procurement
professionals
5. Implement centralized procurement at the
national (as appropriate in each country) and
regional level for selected items
4. Backlog in
submitting
Government
Financial Accounts
and Audit Reports.
Audit and Anti-Corruption Measures
Short Term
1. DOAs’ reports should be promptly presented
to Parliaments.
2. Clear work programs should be adopted to
clear any backlog in the preparation of annual
financial accounts of the Government and the
related audit reports and ensure prompt
presentation to the Parliaments.
Date
Agency in
charge
37
Major Issue
Recommended Action
Medium Term
1. Train staff of the Accountants-General and the
DOAs to strengthen the accounting and auditing
functions. Furthermore, the capability of the
Accounts and Audit functions should be
enhanced through the purchase of technology
(e.g., computers, networks, computerization of
functions), in addition to additional trained staff.
2. Introduce legislation relating to Prevention of
Corruption, whistleblower protection and
freedom of information
4. Establish appropriate anti-corruption
authorities
5. Train appropriate staff (including public
prosecutors) in anti-corruption investigative
techniques
5. Establish a reporting system (e.g. a hot-line)
with open access for reporting cases of corruption
to be investigated.
Date
Agency in
charge
38
Annex 2
Technical Assistance
1.
Implementation of new procurement legislation would require significant
technical assistance to draft model legislation, design institutional arrangements, establish
management information systems, carry out training needs assessment and develop
training programs, prepare a complete set of administrative tools for application of the
new legislation, such as SBDs, contract and evaluation forms, procurement manuals,
guidelines and procedures, carry out initial training, and related activities.
2.
The following estimated costs of implementing the Action Plan are purely
indicative and will be discussed with the countries and the donors during the regional
workshop.
Activity
Estimated Cost
US$
Procurement Law, and definition and structure of the
regulatory authority, management information system,
its dissemination and training
300,000
Analysis for decentralization and concentrated
procurement training of key staff
150,000
Organizational structure for procurement staff
40,000
Training assessment, preparation of procurement
modules, and Standard Bidding Documents
250,000
Preparation of training module for audit and training
of audit staff
150,000
Improvement of budgetary approval and release
system, including testing a pilot system
60,000
Cost of steering committee and technical assistance
75,000
Sub Total
Contingencies
Grand Total
1,025,000
100,000
1,125,000
Funding
Agency/Remarks