If you think you might have got away with that shady government contract, or that you managed to abscond with government funds through corrupt means, think again. The Office of Procurement Regulations will be coming to investigate questionable matters, even if they happened after the office’s formal inauguration.
In a conversation with Business Day, chairman Moonilal Lalchan said as soon as it is empowered by the complete passing of the Public Procurement Regulations Act of 2015, the office can and will go back in time and look at suspicious activities involving public procurement over the past five years.
“We are waiting to test the first case that may be retroactive to 2015 (when the act was pronounced). We have senior counsel advice that we can go backwards so everything that happened in the past four and a half to five years,” Lalchan said.
The matters would be investigated according to the laws in place at the time of the infringement. That would include the Central Tenders Board Act and policies put in place then for public procurement.
That means, as soon as the act governing the Office of the Procurement Regulator is completely accepted as legislation, the regulator could investigate matters of misappropriation even if the matter had been investigated by another body.
If the matters are investigated and people are found in breach of any laws, including bid rigging, or any attempts to influence the result of a tender, a file will be presented to the Director of Public Prosecutions, who will take over the case. From there, people could face the possibility of years in prison and millions of dollars in fines.
The Office of Procurement Legislation Act, under which the Office of the Procurement Regulator operates, is in its final stages of being declared law and would cover and protect the government from fraud and corruption as it pertains to procurement. It would allow the regulator to oversee and audit the processes used to procure all items for the government – from million-dollar equipment used for building and reconstructing infrastructure and government buildings, to portugals for school-feeding box lunches. Not only will they be in charge of monitoring the procurement of goods and services for the government, they are also in charge of how these things are disposed of.
The only thing standing in the way of the act becoming legislation is an opportunity for regulations to be vetted in Parliament. At present, the regulations are in the hands of the Minister of Finance, the line minister. They were submitted to him on September 2 last year. At a post-Cabinet media briefing last Thursday, Finance Minister Colm Imbert said the regulations would be presented to the Parliament in February.
A study done by the Organisation for Economic Cooperation and Development done in 2014 suggested that governments could lose between ten and 30 per cent of the money spent on public procurement to corrupt acts.
“We did a back-of-the-envelope estimation. Our national budget for the year is about $52 billion on average, $26 billion of which is used for public procurement. If we are even able to save about halfway between the ten and 30 per cent, so let’s say about 20 per cent, we could save about $5.2 billion a year. That means every ten years we could run the country for free,” Lalchan said.
As soon as regulations are laid in and approved by Parliament, the Office of Procurement Regulations will replace the Central Tenders Board as the organisation that oversees and audits contracts awarded by government for the procurement of tools, goods and services.
For people who had infringed on any laws concerning public procurement, those found guilty of a criminal offence in these sections could face fines that start at $100,000.
Lalchan said that conviction on crimes such as bid rigging could land someone in jail for ten years and cost them $5 million in fines. Any conduct deemed to be that which could influence a public officer, whether through bribery, conflict of interest, or corrupt collusive, coercive or obstructive means, could be jailed for five years and would have to pay $1 million in fines.
“In addition to that, if someone were to report bad behaviour and as a result, is victimised and intimidated, whoever is responsible for victimisation can face a fine of $500,000 and one year in prison. Failure to report collusion is $500,000 and one year.
“You are also required to keep your procurement information secure. It is no longer an excuse that you had it in the car and lost it, or your house flooded out or your computer crashed. You are required to keep back up files and to keep the information secure. Failure to do that will be a fine of $5 million and ten years in prison. Because it is easy to say your file is lost and investigators lose the trail, and no one is brought to justice for their crimes.”
But the Office of Procurement Regulation is not limited to “big stick” measures to ensure that no wastage through corruption occurs. Lalchan told Business Day of several measures where people who were in breach of the law can even get a second chance to operate fairly. He added the system in place for awarding contracts under the law “evens the playing field” so that small contractors would have equal opportunity to apply for contracts as larger companies and even government owned companies like Udecott.
“We have a database of pre-approved contractors, which is still in the testing phase. What that means is that you are able to come onto our pre-approved list and put in your information. Once that is complete it gets routed to one of the public bodies, then they do their due diligence and you would be on the system. No longer would people have to depend on a public body to do their registration and pre-qualification. There will be one list that all public bodies will have to go to in order to select their contractors.
“We have recommended a change to a part of the act that states that if you are convicted of professional misconduct as it relates to procurement then you should be debarred for a minimum of three years after serving your sentence. That would allow people even convicted of a criminal offence to come into the system. And that is only fair if you are trying to restore people. It would not encourage people to come out of crime.”
Ultimately, the Office of Procurement Regulations is not about enforcing the law and putting people in jail for it. In fact, Lalchan said the office would measure its success, not by how many people are arrested in accordance with the law, but how many people comply.
“When you bring charges against people for non-compliance it is state money going down the drain again to defend cases in court and so on. Then you will not have the real effect of savings and so on. The more people you have to go after because of breaches would mean the more time and money wasted. But we will go after them.”