The contract for the production of electronic ID cards

Last Monday, the meeting of the Public Accounts Committee (PAC) to scrutinize the public accounts and the related reports of the Auditor General, had to be cancelled because of the absence of a quorum. It will be recalled that the Standing Orders of the National Assembly were amended in April 2022 to increase the quorum for the convening of the nine-member Committee from any three persons, inclusive of the Chairperson, to five persons: two from the Government’s side, two from the Opposition and the Chairperson.

The Minister of Governance and Parliamentary Affairs had asserted that the change was necessary to ensure an ‘efficient and accurate scrutinisation of the use of public funds’. She went on to state:

The issue of the quorum being amended is not harmful. It will in fact make sure both sides always have two on each side, you do not have to have everybody but you have to have two on each side to ensure make sure the work goes forward… This will enhance the way in which we operate in the Parliament. It is not harmful to anyone.

This is not an issue of this government being afraid of being scrutinised, you cannot say that because we are not at this government’s expenditure from October 2020 forward. But what it attempts to do is ensure in the [PAC] there is recognition on both sides, that the government side has an interest to make sure that when expenditure comes up and examined that it is there to see it and participate in it just as it is the right of the opposition to be there, and to do what they have to do.

The PAC Chairman, on the other hand, while bemoaning the fact that matter was not discussed at the level of the Committee, argued that the non-attendance of members from the Government’s side will stymie the work of the PAC, ‘rendering it impotent and nonfunctional’. He stated that:

This [change] will impact negatively on the Committee’s ability to ensure accountability and transparency in the expenditures. Since the 12th Parliament, the PAC has been carrying out its mandate and meeting on every statutory date, and our work has been executed in very efficient manner. We see this as another attempt to slow down the work of the PAC … to ensure that fewer meetings are held, and on occasions if they do not want certain agencies examined, they can now prevent that by simply not attending PAC.

We call on the Speaker to act and the people of Guyana to speak out against this deliberate act to prevent scrutiny, hinder the proper examination of national expenditures and to limit the PAC’s work to hold government and accounting officers accountable.

The last report of the PAC was in respect of the fiscal year 2015. That report was laid in the National Assembly on 8 August 2018. The Committee is therefore six years in arrears in reporting on how funds appropriated through the budget process to meet expenditure on the Government’s programmes and activities have been expended.

Our comments on the contract that was recently awarded for the production of electronic ID cards provoked quite a reaction from various stakeholders. Two Sundays ago, Stabroek News sought our views on whether there has been a breach of the Procurement Act in relation to the US$34 million contract with Veridos Identity Solutions, a German-based company. Having examined the detailed requirements of the Act, we concluded that since the Authorities did not follow the open tender approach, a breach of the Act has occurred.

In today’s article, we examine the issue in some greater detail.

Requirements of the Procurement Act

Sections 25-29 of the Act set out five methods of procurement: open tender; restricted tender; requests for quotation; sole source procurement; and procurement through community participation. Public tendering is mandatory, and for such tendering an invitation to tender or to prequalify is required. On the other hand, Section 26 allows for restricted tendering where the goods or services by reason of their highly complex or specialized nature, are available only from a limited number of suppliers or contractors, in which case all such suppliers or contractors must be invited to submit tenders.

Additionally, Section 28 permits single source procurement where, among others,

(a) The goods or services are available only from a particular supplier or contractor, or a particular supplier or contractor has exclusive rights with respect to such goods or services, and no reasonable alternative or substitute exists;

(b) The services, by reason of their highly complex or specialized nature, are available from only one source; and

(c) The goods or services relate to national defence

or national security.

Matters of national security

The Act does not define “national security”. We therefore need to apply the ordinary meaning of the term which is about ‘the safety of a nation against threats such as terrorism, war or espionage’. It is concerned with foreign relations and protection from internal subversion, foreign aggression or terrorism. Considering the above, it is indeed hard to argue a case that: the production of ID cards, whether electronic or hard copies, relates to national security, as the Authorities contend; and the application of the opening tender approach will have an adverse impact on national security. In fact, it could be argued that the production of such cards without the prior consultation with citizens could result in an invasion of personal privacy.

Has there been a breach of the Procurement Act?

The President had stated the company was selected from two recommended by Sheik Ahmed Dalmook Al Maktoum of the United Arab Emirates, whose assistance was sought in October 2021. It will be recalled that the Government had procured more than G$2 billion worth of Russian-made Sputnik V vaccine from a company owned by the Sheik at more than double the World Health Organisation recommended price. Concern had been expressed as to why the vaccine was not sourced directly from the authorities in Russia rather than from the Sheik who in November 2020 had paid a visit to Guyana and who was allegedly closely associated with two persons being investigated in Norway for fraud and money laundering.

The contract for the production of electronic ID cards falls within the realm of restricted tendering involving only two companies based only on the recommendation of the Sheik rather than through comprehensive research from the competent agency of the Government. A Google search has revealed that there are at least 30 leading companies that specialise in the production of electronic ID cards, thereby not only rendering the restricted tender approach inapplicable but also supporting the application of open tendering.

In view of the above, we conclude the award of the contract between the Government of Guyana and a German-based company is a breach of Section 25 of the Procurement Act.

Apparent lack of transparency

The second question asked of us was in relation to the transparency of the award. We responded by stating that the Act provides for the regulation of the procurement of goods, services and the execution of works, to promote competition among suppliers and contractors and to promote fairness and transparency in the procurement process. The Act makes it clear that the objectives are: (a) To maximizing economy and efficiency in

procurement;

(b) To fostering and encourage participation in procurement proceedings by suppliers and contractors, especially participation by suppliers and contractors regardless of nationality, there by promoting international trade;

(c) (d) (e) (f)

To promote competition among suppliers and contractors for the supply of goods, services, or construction to be procured;

To provide for the fair and equitable treatment of all suppliers and contractors;

To promote the integrity of, and fairness and public confidence in, the procurement process; and

To achieve transparency in the procedures relating to procurement.

The main plank of the Procurement Act relates to open tendering, except in certain defined circumstances. Since there was no competitive bidding in relation to the award of the contract to Veridos Identity Solutions, we were unable to determine whether the above stated objectives were met, especially as regards (a), (e) and (f).

Stabroek News carried a response from an unnamed source from the National Procurement and Tender Administration Board (NPTAB) arguing that the contract was based on a bilateral agreement; the matter is one of national security; the NDMA sought and obtained the approval of the NPTAB; and the matter was referred to the Cabinet for its offer of no objection. However, at the press conference hosted by the President on 10 March 2023, there was no mention of the involvement of the Board. All that was stated was that the two companies submitted prototypes which were assessed by technical teams from NDMA and the Information and Communications Technology (ICT) Advisor from the Office of the National ICT. We have also searched the NPTAB website and found no evidence of its involvement. It is therefore left on the Board to provide the evidence of its involvement.

A legitimate question that may be asked is: how independent is the NPTAB when it has a reporting relationship to the Minister of Finance? Section 16 of the Act provides for the Board to comprise seven persons appointed by the Minister – not more five from the Public Service, and not more than three from the private sector after consultation with respective organisations. Two persons are to function on a full-time with the Minister appointing the Chairperson from one of the two full-time members. The quorum for meetings is four members, including the Chairperson who has a casting vote. In September 2020, new members of Board were appointed, and therefore their tenure of office expired some six months ago. It is not publicly known whether new members have been appointed or whether the tenure of office of these members has been renewed. If there has been no new appointment or renewal of appointment, then all decisions taken by NPTAB during the last six months would lack legitimacy.

When the appointment of members of NPTAB was made in September 2020, the Minister of Public Works

had publicly stated that the appointment of a senior official of the Ministry of Finance (responsible for the monitoring of the execution of the Government’s public investment programme) as the Chairperson of the Board, would have been a temporary one. This did not turn out to be the case, as the person is still functioning in the position, which as noted above is a full-time one. Apart from issues of apparent conflict of interest, the official is holding two full-time positions at the same time!

Finally, on the question of bilateral agreements, one must note that such agreements are between two countries. There can be no bilateral agreements between two individuals, or a country and an individual, and it is not publicly known if there is a bilateral agreement between the Government of Guyana and the UAE and what are the terms and conditions of such agreement. Most bilateral agreements are in the nature of the grant loans, grants and other forms of assistance, as in the case of India and China, and there are usually conditionalities. For example, for loans for infrastructure development, only Chinese firms are eligible to bid for contracts. Even then, the Authorities have to go to open tender to select the lowest evaluated bid. The contention that the contract for the production of electronic ID cards is based on a bilateral agreement is therefore irrelevant to the issue at hand.

Conclusion

We support the call for a suspension of the contract for the production of electronic ID cards until such time that wide public consultations are held to discuss, among others, issues of personal privacy; the apparent overlapping of responsibilities among State agencies; which agency has the legal authority for issuing such cards; and the status of the existing national ID cards. After the views of citizens are taken into account, the proposal should be reformulated, tabled in the Assembly and referred to a Special select Committee for detailed consideration.