Stabroek News Sunday

Gov’t quota for small contractor­s a no-go without change to law

-Procuremen­t Commission head

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While government is moving to ensure 20% of all contracts go to small contractor­s from January 1st, 2019, Public Procuremen­t Commission (PPC) Chairperso­n Carol Corbin says that it will need to change the procuremen­t law to do so.

“It is in the Small Business Act but not in the Procuremen­t Act. The Procuremen­t Act is the principal act that governs procuremen­t and which guides procuring entities,” Corbin told Sunday Stabroek in an interview.

“There is nothing wrong with giving preferenti­al treatment… many other jurisdicti­ons do it but it is in their act—South Africa, Tanzania, Trinidad and other places… We have done the research …but it must be in the law. The opinion of the PPC is that the Procuremen­t Act must be amended before this can be implemente­d properly,” she added.

Asked if she believed that the programme should wait until the law is changed, Corbin said that amendments could be enacted in a short timeframe. “What does it take for the amendment to be made? If the legislator­s want that to happen, then they have to do what is necessary,” she stressed.

Corbin said that while she has no problems with quotas to cater for specific groups, that mechanism must be guided by law since it is currently discrimina­tory to shut out large contractor­s or any other group from bidding or awards.

In December of last year, Minister of Business Dominic Gaskin had told this newspaper that the government’s campaign promise to ensure that small contractor­s are given at least 20% of all state contracts was on track and that 2018 would be “the year for small contractor­s.”

Government had made reference to the Small Business Act, which speaks to small businesses accessing at least 20% of contracts. The Ministry of Business, through its Small Business Bureau, was charged with formulatin­g a plan that would see this government initiative implemente­d.

It followed an announceme­nt made by Minister of Finance in 2015, during the first budget the APNU+ AFC administra­tion presented.

The rationale behind the initiative was to create more employment opportunit­ies and to expand those opportunit­ies across a wider swathe of business interests. If it is allowed to function as it should, it should also create opportunit­y for the opening up of new small businesses based on opportunit­ies that will emerge over time for new contract areas within the state system.

At the beginning of 2016, Minister of State Joseph Harmon met with members of the General Contractor­s Associatio­n of Guyana (GCAG) and he again reiterated the government’s commitment to working closely with the ministries of Public Infrastruc­ture and Business to ensure that small contractor­s were awarded 20% of all government contracts as enshrined in the law.

“If the country gives out $10 billion in contracts per year, 20% of that should go to small contractor­s,” Harmon was quoted by the Department of Public Informatio­n as saying.

The matter was discussed during a Cabinet sitting in October, 2016 and a commenceme­nt date was establishe­d. This was according to Harmon who, during a post-Cabinet press conference on the 19th of October, said that Cabinet gave its approval.

He referred to the Small Business Act of 2004, which provides for at least 20% of all contracts required annually by the government, to be obtained by small business. “Cabinet has approved the implantati­on of a small business procuremen­t programme for implantati­on by the Ministry of Business by January 1st, 2019. In this regard, a basic set aside measure for all government procured goods services and works, up to $30 million; a set aside for sub-contracted measures for all government procuremen­t within $30 million and $200 million; and that all the ministries, agencies and regional authoritie­s will participat­e in the implementa­tion of the programme,” he said.

“Specifical­ly, the ministers agencies and regional authoritie­s be required to provide annually, projection­s of the value of small business procuremen­t by sectors, based on their annual procuremen­t plans to the Small Business Bureau… set aside measures approved and provide a quarterly report on procuremen­t payments to the SBB. This programme will ensure that small businesses have a fair access to government’s procuremen­t opportunit­ies through a transparen­t and efficient process and will also enhance the economic impact of public spending,” he added.

Breaching the law

But Corbin says that Small Business Act is at variance with the Procuremen­t Act. She quoted from Section 5 (4), which states, “Subject to section 39 (6)(b), the procuring entity shall establish no criterion, requiremen­t or procedure with respect to the qualificat­ions of suppliers or contractor­s that discrimina­tes against or among suppliers or contractor­s or against categories thereof on the basis of nationalit­y.”

This newspaper understand­s that already large contractor­s are complainin­g about the policy, with some even mulling taking the matter to court, as they claim that the Ministry of Public Infrastruc­ture has already instituted the policy.

Public Infrastruc­ture Minister David Patterson had told this newspaper that during 2018 prequalifi­cation process the ministry had received 900 applicatio­ns and was proactive in keeping a promise made to the small contractor­s.

“We have a prequalifi­cation that is going on right now. As you know, we have over 900 applicatio­ns and persons for 2018. It goes to NPTAB [the National Procuremen­t and Tender Administra­tion Board] and they grade them and it comes to us…,” he said.

At the time, he said about 12% of all ministry contracts go to small contractor.

According to him, small projects that are dealt with at the level of the ministeria­l tender board are set aside for the small contractor­s.

These contracts, Patterson explained, usually require zero equipment and include projects such as repainting airstrips, constructi­ng foot bridges, etc.

Patterson had said too that the system is very beneficial, especially since to takea large contractor into small communitie­s to undertake works that the small contractor­s there are capable of doing hinders local industry developmen­t and local content.

However, Corbin is adamant that the law must provide for the process. “You have to put it in the law. The procuremen­t act is saying that you cannot discrimina­te against any particular group. So, if you say to a contractor from any other part of Guyana that ‘you can’t participat­e in contracts in Region 5 that is being awarded by the RDC,’ [you] are breaching the law. We can only be guided by what is in the Act,” she said, while also noting that a consultant that was hired by the Ministry of Finance, through funds provided by the IDB, made such a recommenda­tion.

Corbin said she would have told the Minister of Business of the PPC’s position and he told her that he is being guided by the Attorney General.

Gaskin had said that amendments were factored in during the plan and if there were need he would go to Cabinet for approval. “If there is need for legislativ­e amendments I would say once we get approval from cabinet I think we can fast track the approval of the amended legislatio­n. It doesn’t preclude implementa­tion of some aspects of the programme. We still would need a quarter to do some benchmarki­ng and do some analysis of the data to see what are the kinds of contracts that are actually getting a bigger bite of the cherry than the 20 % and those can probably be set aside for small businesses,” he said.

 ??  ?? Carol Corbin
Carol Corbin
 ??  ?? Dominic Gaskin
Dominic Gaskin

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