Interview: P. Beeharry, Chairman – Central Procurement Board
“The CPB has the statutory obligation to ensure fairness, equity and transparency in public procurement”
“In the MedPoint case, it is good to know that the second evaluation of the property referred to was not undertaken by the CPB”
“We are not aware of any sanction having been taken against Sinohydro nor of any adverse report with regard to its performance”
In the context of information pertaining to certain faulty buses operating for the NTC having come out lately, a spate of accusations has been raised in public the purport of which was to point the finger at public procurement methods. Targeting the Ministry of Infrastructure, allegations have also been made that certain public contracts would have been awarded by public bodies to so-called blacklisted firms which would be having a past record of missing targets pertaining to delivery on agreed-upon contracts. Mauritius Times has gone out this week to thrash out the allegations being made by asking Mr Prem Coomar Beeharry, Chairman of the Central Procurement Board to sift out the wheat from the chaff. The Chairman of the CPB says rules are clearly laid down and it is the job of the CPB to go by them, no more, no less…
Mauritius Times: The stated objective of the Central Procurement Board (CPB) is to “promote economy, efficiency, effectiveness, transparency and prevent any corrupt practice in public procurement and, thus, achieve best value for money in terms of price, quality and delivery according to specifications”. It is said that the wife of Caesar should be above reproach. Can you say with the necessary assurance that this has actually been the case since your board has taken over stewardship of this important job?
Prem Coomar Beeharry: The functions and process of the Board are clearly defined in the Public Procurement Act 2006, as amended.
The Board revisited its mission, which is: “To ensure value for money in Public Procurement and Timely acquisition through a fair and Transparent process”.
Since taking over the stewardship, the Board has been continuously reviewing its monitoring and control procedures for its core activities, such as vetting of bidding documents, public opening of bids, setting up of independent bid evaluation committees and approval of award of contracts. Significant progress has been made towards attaining the set objectives. In other words, we’ve not been sparing any efforts to make the system as efficient as possible.
* Do you feel that the CPB has its say all along public procurement of goods and services or do you think that the point from which it intervenes in the system of public procurement limits its role so that the best outcomes are not always achieved?
There are in fact limits imposed by the law with regard to the role of the CPB in the procurement of goods, works and services in the public sector.
Firstly, there is the point from which the CPB intervenes, and secondly the limits imposed by law with regard to the value of contracts that should be handled by the CPB. The role of the CPB, in relation to ‘major contracts’, starts with the vetting of bidding documents and procurement notices, and ends with the decision relating to award.
As per the provisions of the Act, the responsibility for preparing bidding documents and the execution of a contract once CPB’s approval has been obtained, rests with the public body involved in the bid process. We consider that it has to be so. A public body is better placed than anyone else to identify its requirements and translate same in the bidding documents.
However, the CPB has an important task which is to vet bidding documents to ensure that the document does not contain any clauses or specifications which are restrictive and anything else which does not allow for a transparent and equitable process. The responsibility for the monitoring of contract implementation lies solely on the public body.
As for the limits with regard to value of contracts, the CPB, as you are aware, is concerned with ‘major contracts’ only, i.e. contracts the value of which exceeds the amounts prescribed in the Schedule of the Act. The ‘prescribed amounts’ vary. For example, for Municipalities and District Councils it is Rs15m, for Government Ministries and Departments it is Rs 50m, and for major spending public bodies like the Road Development Authority, the CEB and the CWA, it is Rs 100m. As such, the CPB does not have its say on all procurement undertaken in the public sector. The question as to whether the role of the CPB should be extended to cover procurements of lower values is a policy matter. Actually, the trend has been towards empowering public bodies to have full control on the implementation of their projects by reviewing upward the prescribed amounts. As matters stand, the CPB is satisfied with the limits imposed by law with regard to its role in procurements undertaken in the public sector.
The Ministry of Finance, which is responsible for the monitoring of the execution of programmes, and the Procurement Policy Office (PPO), which monitors procurements undertaken by public bodies, would be in a better position to say whether the role of the CPB should be further increased.
* When you say that the CPB vets bidding documents submitted by public bodies, what exactly does the vetting consist of? Can you challenge policy decisions taken by public bodies behind those bidding documents such as specifications that do not always make for best outcomes in terms of value for money?
When we vet a draft bidding document received from the public body, we carry out the following checks to ensure, inter alia, that:- the detailed estimated cost worked out for the procurement project is fair and reasonable and reflect the prevailing market prices;
– the procurement method chosen is the appropriate one for the procurement in question and the updated and most appropriate Standard Bidding Document has been used;
– the evaluation criteria and methodology as proposed in the bidding document are clear, unambiguous and not biased;
– the eligibility and qualification criteria and selection methodology are not too restrictive;
– requirements and specifications as laid down in the bidding document will ensure a fair competition among bidders, and
– the proposed delivery schedules are reasonable.
When we vet the specifications proposed in a bidding document, it should not be interpreted as challenging a policy decision. Policy is too strong a word to relate it to specifications. Policy, you will agree, relates to matters of general nature. For example, whether to encourage and promote the use of pollution free vehicles is a policy matter which we cannot question. However, we can question specifications which do not seem to be in line with the official policy; we can also ask questions if they appear to be tailor-made, or are most likely to favour a particular bidder, brand or make.
We should not forget that the CPB has the responsibility under the law to ensure equality of opportunity to all bidders, fairness of treatment to all parties, transparency of process and decisions, and the need to go for value for money.
* Have we got a system of vetting of bidders whereby those having an established track record of failure to deliver according to specifications are eliminated outright and not allowed to proceed further in the bidding process? In other words, will the CPB ensure that we are always dealing with counterparts who are credible and therefore worth each other right from the start?
The public bodies are best placed to do this, given that they are responsible for the implementation of projects. The responsibility of monitoring the performance of suppliers and contractors, therefore, rests with the public bodies. They have the duty under the law to report the poor performers to the PPO, and recommend sanctions against them.
The Public Procurement Act makes provision for the debarment/disqualification of bidders, suppliers or consultants. A public body may submit a request to the Procurement Policy Office for debarment or disqualification of a supplier/potential bidder on grounds as specified in the Regulation, For example, for supplying false information in the process of submitting a bid; collusion between bidders; repeated failure to comply with the terms and conditions of the contract or material breach of contract, etc. A debarred or disqualified bidder cannot take part in any procurement exercise until the expiration of the debarment/disqualification.
Moreover, bidders debarred by known International Agencies such as ADB, World Bank are also debarred from participating in local bidding exercises. The Procurement Policy Office informs all public bodies of such debarment and disqualification and a notice to that effect is posted on the website of the Procurement Policy Office.
Bidding documents also provide for a self-declaration by the bidder to the effect that he is eligible to bid and has never been debarred by any international body, and has not been convicted for corrupt or fraudulent practices. Strictly speaking, a bidder cannot be penalized on hearsay. Very often allegations are made against bidders participating in a procurement exercise, but not substantiated. During evaluation and also prior to approval of award, checks are carried out to ensure that none of the bidders concerned has been debarred or disqualified by the PPO or by any international organization like the World Bank, AfDB, AFD or the EU.
* Bidding documents specify the specific weights to be allocated to ‘technical’ and ‘financial’ merits of bid proposals. Does the CPB have the power to give greater weight to, say, technical strength of a bidder even though its financial proposal may be lower than that of a competing bidder with better technical ability to deliver on the contract? In other words, who decides between being ‘penny wise but pound foolish’?
Standard Bidding Documents prescribed by the Procurement Policy Office for certain type of procurement make provision for specific weights to be allocated to technical and financial merits of the proposals. Some examples of such procurement are: Consultancy Services, Design and Build projects, Cleaning and Security Services, Generators for CEB, etc. The weightage to be given depends on whether we want Quality and cost; Quality only or Least cost and acceptable quality.
Usually in the Standard Bidding Documents, guidance is given by the Procurement Policy Office on the marking system. The weightage is fine-tuned by the Central Procurement Board during vetting of bidding documents in consultation with the public body concerned.
Thus, there are cases where marks are only allocated to “Technical” merit. In such cases, a required pass mark should be achieved following which the least cost bid is selected for award. Also, there are cases where no weight is given to price and award is made based solely on technical merit. It all depends on specific cases.
* Comments published in the media in relation with the procurement of 65 buses by the National Corporation of Transport (NTC) would suggest that the Central Procurement Board (CPB) would have acted illegally (by making pronouncements on tender specifications and by causing amendments to be brought thereto once the tender had been floated), and that it was amenable to ministerial interference. The CPB has denied these allegations, but there is still the persistent allegation about the CPB trying to influence policy matters in lieu of the concerned “Purchaser”, that is the NTC. Isn’t it the job of the NTC and of the Ministry of Public Infrastructure to “decide on policy issues” with respect to the “possibility of procuring fully built buses from overseas” and “difficulties that could arise during evaluation of bids”?
I’m happy that you have put this question as it gives the CPB the opportunity to set the records straight.
To pretend that the CPB cannot pronounce on tender specifications or to suggest amendments thereto once a tender has been floated, demonstrates a clear ignorance of our public procurement rules. As it has been stated in a recent communiqué issued by the CPB following certain remarks made in the press, the CPB has the statutory duty to vet bidding documents before the Invitation for Bids is launched. You will agree that vetting does not mean rubber-stamping specifications even though they may to all evidence appear to be tailor-made! When vetting, the CPB has to ensure that the specifications/requirements contained in a Bidding Document are not restrictive or tailor-made. The CPB has the statutory obligation to ensure fairness, equity and transparency in public procurement.
With reference to the allegations about the CPB trying to influence policy matters, it is a fact that discussions were held with the representatives of the NTC and the Ministry of Public Infrastructure in the context of examination of the bidding document submitted recently for the procurement of 65 buses through the Open Advertised Bidding Method. The discussions centered mainly on the best approach applicable and the most appropriate procurement method in the specific circumstances that prevailed. At no time during the meeting did any one express any reservation regarding the matters discussed. Everybody participated fully in the discussions and there was a consensus on the conclusions reached.
I should point out that it is well within the mandate of the CPB to discuss about the proposed procurement method as well as the Standard Bidding Document used for the procurement in question. In the present case, it was left to the “Purchaser” to decide on the course of action that would best suit the situation that prevails. The records prove that at no time did the CPB propose or recommend any particular course of action. The NTC was requested to decide on the various options available and inform the CPB on the course of action it intended to follow.
* The media comments and those of the NTC chairman give the impression that the Ministry of Public Infrastructure and the board of the NTC – or at the very least its chairman – have not been on the same wavelength as regards the best procurement option for the bus company. We would not want to surmise as to which horse either might be flogging, but tell us: is it within the mandate of the CPB to cause both parties to follow a line of action which is in the best public interest? Or is it safer to choose to stay away from harm’s way in such situations?
You are right. There is also the impression that the Board of the NTC – or at least its Chairman — and the Management of the Corporation too are not on the same wavelength. This is explained by the fact that certain matters discussed and agreed upon by representatives of the NTC during discussions at the CPB, are not endorsed by the Chairman or his Board.
So far there has been no major divergence of views between the CPB, and the Ministry of Public Infrastructure and the Management of NTC with regard to procurement of buses. There has always been consensus on almost all matters discussed. The CPB, as a matter of fact, does not deal with Boards of Directors or Ministers when discussing matters relating to any procurement. We deal only with Management. Now, if there is a problem between a Board of Directors or the Chairman of the Board and Management, the CPB cannot do much.
* Who recommended that the proposed purchase be made as “emergency procurement” rather than going through the normal route of inviting bids through a public procurement process? Does the CPB have a mandate to make such a recommendation, if at all?
At the outset I would like to make it clear that there has never been any recommendation or proposal to the NTC to go for “Emergency Procurement”. As a matter of fact, the NTC submitted bidding documents for the procurement of 65 buses on 17 June 2013 for vetting. In the meantime, as we all know, there was a strike by workers of the Corporation, principally, contesting the decision to relinquish certain routes served by the NTC on ground of lack of roadworthy buses to serve on those routes.
At a meeting held on 27 June 2013, the procurement of 65 fully built buses was discussed with the representatives of the NTC and the Ministry, with the recent strike in the background. Taking into account the urgent need of buses by the Corporation, discussions were held regarding the possibility of (i) procuring part of the number of buses required fully built from overseas, especially given that, if the NTC were to procure buses mounted locally, the delivery of the 65 buses would have taken more than a year, at the rate of 5 buses per month (ii) having recourse to “Emergency Procurement” if ever the situation warrants and if the conditions laid down in the Act for resorting to such method of procurement are met.
At no time was any decision taken nor any recommendation or proposal made regarding the course of action to be followed. It was left to the public body to decide thereon. As a matter of fact, in the minutes of the meeting it is clearly recorded that “it was agreed that the following options could be explored in respect of this procurement…”
En passant, it is good to know that “Emergency Procurement” is a procurement method provided for in section 21 of the Public Procurement Act. It was clear at the meeting that, should the public body decide to have recourse to “Emergency Procurement”, it will have to satisfy the conditions laid down in section 21(3) of the Act. It was also brought out that in case the conditions for “Emergency Procurement” are met and it is decided to procure using that method, a Restricted Bidding exercise could be undertaken, inviting bids from a few known and reliable suppliers, and the Cabinet be informed accordingly.
* If there is some truth in the proposal that the Ministry of Infrastructure would have recommended that part of this procurement of 65 buses be made locally and part from outside Mauritius, in view of an element of urgency, does this amount to the Ministry bypassing following efficient procurement procedures as laid down in the Public Procurement Act?
We have learnt through the debates in the National Assembly on Tuesday last of such recommendation having been made to the NTC. We are not in a position to comment as to whether that would be tantamount to bypassing procurement procedures as laid down in the Act. We consider this to be more a policy matter to be decided upon by Government and the Corporation in the light of prevailing circumstances.
* In the MedPoint case, a second evaluation of the property was made to the disadvantage of the purchaser, i.e. the government. Is there a risk that interference (in the work of the CPB) by ministries can lead to identical ambiguous situations in the case of public contracts going through the CPB?
The CPB acts independently, without interference from any quarter, and assumes fully the responsibility of its decisions. The CPB has in place a transparent system for evaluation of bids. The Board never interferes in the works of Bid Evaluation Committees.
Section 37(12), as a matter of fact, provides that “In the exercise of its function, the BEC shall act without fear or favour and shall not be subject to the direction or control of any other person or authority.”
The CPB scrupulously ensures that the provisions of the law are observed. So far, there has been no attempt by any party to interfere in the work of the CPB or the BEC. We have always maintained our independence in the decision making process. You may wish to know that, according to section 58 of the Act any person who directly or indirectly influences or attempts to influence the Board in the performance of its duties under the act shall commit an offence.
In the MedPoint case, it is good to know that the second evaluation of the property referred to was not undertaken by the CPB.
* It would appear that an increasing number of cases are being referred to the Independent Review Panel by unsuccessful bidders. Would that suggest that all is not going round in the bid evaluation process? Or is there an abuse being made of this course of action by unsuccessful bidders?
I would rather say that there is an abuse of the system by unsuccessful bidders just to delay the award of contracts, especially where the unsuccessful bidder is the current contractor for the provision of services like cleaning, security, scavenging, etc. It is good to note that the Independent Review Panel has found no merit in the majority of cases referred to it by ‘aggrieved’ bidders.
* There are allegations in part of the media and on the side of the Opposition that a Chinese firm, Sinohydro, would have used clever tactics to outbid competing bidders and would have failed to deliver on its undertakings. Would you say that these are cock-and-bull stories mounted by rival bidders who failed to secure bids in the first place to cast aspersion on the successful bidder? If there are failings at all, does the public body awarding the contracts have recourse to reasonable remedies in order to get the needful done by the firm?
It is true that there have been allegations against Sinohydro to the effect that the firm has been banned/blacklisted in certain countries and that it is not able to deliver its contracts in a timely manner. It should be pointed out here that Sinohydro is a firm registered in Mauritius just like any other foreign firm operating in Mauritius. It has, as a matter of fact, outbid other firms in obtaining quite a few contracts in the recent past. As you may be aware, bids are evaluated on the basis of requirements and criteria set out in the bidding documents. It is not in order to take into account any hearsay and penalize unduly a bidder on this basis.
A bidder can be penalized only if it is proved that it has been debarred by the PPO or any other recognized international institutions like, the World Bank, AfDB or the ADB or if it has been reported for poor performance. Once a contract is awarded, it becomes the duty of the implementing agency to ensure that the clauses of the contract are being fully complied with, and to apply appropriate sanctions whenever the situation warrants. Our bidding documents do provide for liquidated damages and sanctions in case of delays in the execution of contracts. It should be pointed out that delays in the execution of contracts is a quite common phenomenon and is not restricted to any particular contractor.
In the case of Sinohydro we are not aware of any sanction having been taken against the firm nor of any adverse report with regard to its performance.
* Do public contracts make provisions for elements like ‘force majeure’ coming in the way of successful performance on contracts awarded and penalise successful bidders only if they default on their obligations due to blatant bad faith, rather than due to factors outside their control?
Yes. It is an international practice to cater for “Force Majeure” in the bidding documents. Federation Internationale des Ingenieurs – Conseils (FIDIC), which is the authority for Civil Engineering works contracts, does take into consideration “Force Majeure”.
According to FIDIC, “Force Majeure” means an exceptional event or circumstance which is beyond a Party’s control, or which such Party could not reasonably have provided for before entering into a Contract, or which, having arisen, such Party could not reasonably have avoided or overcome, or which is not substantially attributable to the other Party.
“Force Majeure” may also include, but not limited to, exceptional events or circumstances like, war, riot, strike, natural calamities, so long as the above mentioned conditions are satisfied:
If a contractor is prevented from performing its substantial obligations under a contract by “Force Majeure”, then it shall give notice to the public body of the event or circumstances constituting the “Force Majeure” and shall specify the obligations, the performance of which will be prevented. The Contractor shall be excused performance of its obligations for so long as such “Force Majeure” prevents it from performing them. If a contractor is prevented from performing its obligations under a contract by “Force Majeure”, he shall be entitled to an extension of time for any such delay, if completion is delayed.
* What, in your opinion, explains the absence of public bidding for large contracts by the private sector and yet no one seeking to know why the same transparent and accountable procedures as in the public sector are not adopted over there as well?
Unlike in Government where there is need to ensure transparency in the use of public funds, in the Private Sector there is no such need. The emphasis is more on outcome, results and profitability, and less on transparency.
* Is private selection of contractors in the case of the private sector by way of private preferences not a denial to share the economic space with all those inside and outside the country having a potential to bid for contracts? For example, the IPPs provide privately generated electricity to the public through the CEB but, as far as we are aware, they never made any public call to bid for their mechanical, technical and other component supplies publicly. Is not the bias for accountability and transparency weighed too heavily therefore largely on the public sector?
Again this is a policy matter for the Government to decide. Just like at a certain time, Government decided to introduce the Equal Opportunity Act to ensure equal opportunity for all, be it in the private sector or the public sector. Similarly, it is for the Government to decide whether there is need for a legislation to ensure a fair competition in the award of contracts in the private sector.
With regard to the arrangements in place for IPPs to provide privately generated electricity to the Central Electricity Board, the CPB is not concerned with same as it does not fall under the purview of the Public Procurement Act. It relates more to a Government policy in the energy sector, on which we cannot comment.
* Published in print edition on 12 July 2013