$Billion$ in breaches! - Contractor General's annual report finds public entities wanting
published: Tuesday | June 12, 2007

Edmond Campbell and Tyrone Reid, Staff Reporters

In another no-holds-bar approach, Contractor General Greg Christie has highlighted billions of dollars worth of breaches in the awarding of government contracts, chief among them, the procurement of health services for members of the public service, at an estimated cost of $2 billion, without the contract being put to tender.

The Government's procurement procedures were flouted with impunity last year, and according to Mr. Christie evidence of the breaches has reached alarming proportions.

The contract for the Government Employees' Administrative Services Only (GEASO) health scheme, as at December 2005, had not since 1995 been tendered by the Ministry of Finance and Planning.

According to the annual report of the Contractor General, a copy of which The Gleaner obtained from highly-placed sources, the contract has been repeatedly renewed each year on February 1, on an uncompetitive basis, and on each occasion, the award was made to Blue Cross of Jamaica Limited.

Protect taxpayers' interest

Efforts to get a comment from the Contractor General were denied, as he explained that he could not speak on the issues contained in the report until it was tabled in Parliament.

The Contractor General's 20th Annual Report called for Cabinet and the Legislature to move decisively to protect the interest of taxpayers.

The caustic and comprehensive report revealed that under the GEASO health scheme, Blue Cross received the contract for providing the health benefits valued at approximately $1.68 billion for the 2005/2006 financial year.

Mr. Christie explained that the contract was renewed every year, in the 397-page document, which should be tabled in the House of Representatives today. He contended that because the contract was not subjected to the scrutiny and rigour of competition in the open marketplace, there remained an open question, which was of vital importance.

An adamant Christie has sternly cautioned the Cabinet to ensure that there is no recurrence in the future. "The question is whether the Jamaican taxpayer and the public sector employee, whose contributions together compose the contract costs, have received and are receiving value for money," Mr. Christie added.

He charged that none of the annual contracts were either evaluated or endorsed by the National Contracts Commission (NCC), prior to their award, since the NCC commenced its contract endorsement operations in June 2000.

"The Cabinet must insist upon strict conformance, by Public Bodies and Public Officers at all times, with the Government's procurement guidelines. This must be moreso particularly in the case of major 'high dollar value' Government contract awards. Another GEASO should never be allowed to take place," he said.

Mr. Christie added: "It is the respectful but considered opinion of the OC-G that the Cabinet must act decisively to ensure that fairness, integrity and public confidence in the procurement process is maintained".

According to the report, during the period 2003 - 2005, a number of written representations were made directly to the Ministry of Finance and Planning, by another insurance carrier, for the GEASO Health Scheme to be put to competitive tender. "The representations, which were copied to the office of the Contractor General as at December 2005, had for the most part, borne no fruit from the Ministry of Finance and Planning," the report said.

After the intervention of the OC-G, which included several letters and a face-to-face meeting with officials from the MOFP the contract was put to tender on December 19, 2006.

At the same time, $3.8 billion worth of contracts, each valued under $4 million for the period May 1, to December 31, 2006, contravened the government's procurement procedures.

Mr. Christie said the State must be perceived to be leading and supporting the fight to bring probity, transparency and accountability to the public sector procurement process, and to root out corruption from its midst.

"In its analysis of the QCA (Quarterly Contract Awards) data which it has so far received, the OC-G has determined that morethan 6,100 contracts, in the $250,000 to $3,999,999.99 range, valuing approximately $5.7 billion, were awarded by 174 procuring public bodies during the period May 1 to December 31, 2006," the report said.

However, the report stated that of the 6,172 contracts which were reviewed, over 3,100 or approximately 51 per cent of the total, valuing more than $2.7 billion, were reportedly awarded to contractors who were not registered with the NCC, "put bluntly, were not qualified to receive government contracts".

Further, "roughly 23 per cent or just over 1,400 of the contracts, valuing more than $1.1 billion, were reportedly awarded without any evaluation by, or the approval of, the procurement committees of the awarding public bodies - all in flagrant breach of the relevant rules".