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Cayman Islands Government

New Procurement Bill Tabled

The Procurement Bill 2016 is being tabled in the Legislative Assembly next month.

If enacted later this year, the proposed legislation and regulations will initiate a comprehensive overhaul and harmonisation of the government’s procurement process; making it more accountable, streamlined and cost effective.

Public procurement, in terms of expenditure, is one of the biggest government costs after human resources. Presently, such procurement represents 27 per cent of the government’s current annual budget, covering the purchase of goods and services across departments, between government and the private sector, and by statutory bodies.

Broader in scope than simple purchasing, procurement requires long-term strategic thinking to assure citizens that public money is well spent. Procurement includes establishing clear rationales for business purchases on a case-by-case basis, the management of risk, market analysis, transparency and, most crucially, insisting on value for money.

The proposed regime will impact all public spending initiatives by government chief officers, heads of department and suppliers to government. It is anticipated that once enacted it will yield returns through greater efficiency and reduce expenditure across the entire process.

At the core of the government’s business plan and strategic thinking, the proposed law suggests several mechanisms to limit unilateral tendering and enhance regulatory compliance.

The bill, stemming from two reports by the Office of the Auditor General in 2011 that were critical of procurement practices, seeks to address such deficiencies.

Among the deficiencies of the present system, the reports found: wasteful practices, a lack of transparency, no procurement expertise, corruption, political interference and the risk of fraud.

The new bill seeks, among a raft of proposals, to redress such shortcomings and strengthen the integrity of public service procurement by providing quantifiable mechanisms and provisions to:

▪Improve expertise and professionalism of procurement by employing procurement professionals to supervise and monitor, encouraging increased oversight, consistency, value for money, fair-dealing and accountability

▪Limit political involvement at policy level by restricting procurement decisions to public officials

▪ Provide a range of procurement methods to suit varying types/levels of purchase;

▪ Improving procurement management information; and

▪ Establish a local business development strategy to promote ongoing economic growth, which means is giving preference to Caymanian owned local companies whilst still striving for value for money.

At the heart of the proposed law and regulations is the setting up of a Central Procurement Office in the Ministry of Finance. Led by the newly appointed Director of Procurement, the office will be staffed by procurement specialists.

The office’s remit will include the training of public procurement purchasers and centralising/streamlining and supervision of the procurement system to ensure best practice.

Crucial to the proposed law’s implementation and improved governance is the establishment of a Public Procurement Committee to provide oversight.

Appointees to the eight-person body, chosen by the Governor in concert with the Premier, the Leader of the Opposition and the Deputy Governor, will include private sector representation.

The bill provides for a written code of conduct for suppliers and public officials to adhere to, as well as defining the role of Cabinet, chief officers and committee members in the revised process. A supplier that provides false information offers an inducement or gratuity to public officials or enters into lobbying will be disqualified from participating in public procurement for a period of time or permanently.

Deputy Governor, Franz Manderson, stated that it was a joint project with his office and the Ministry of Finance. He said, “Although the law is important to underpin this function, the success of the new regime will depend on improving the procurement expertise across the public service. I am pleased that the Ministry of Finance will have trained more than 100 civil servants by the end of 2016 in the provisions of the new law.”

Minister for Finance, Marco Archer stated, “The strengthening of the procurement regime that operates in central Government and in the wider public sector will increase the likelihood of cost-savings and other improvements; for these reasons, the Bill is supported by Government and should be welcomed by the country.”

It is anticipated that these principles, and those further outlined in the draft legislation and regulations, will increase the efficiencies and integrity of the procurement process.

For further details, contact Strategic Advisor to the Deputy Governor, Peter Gough, on 244-2439.

For further information contact: Suzette Ebanks