GOVERNMENT SPENDS a lot of money purchasing goods and services.
Based on the Estimates of Expenditure and Revenue 2016-2017, debated and approved by the House of Assembly in March, spending on goods and services will reach $459.9 million by the time the financial year ends on March 31 next year.
That figure alone shows how much of the national budget such purchases use. For many years Barbados has had a Central Purchasing Department, but a new regime that focuses on state procurement in a comprehensive way is pending.
This is being done with the Inter-American Development Bank’s (IDB) support. The IDB said the “specific goal is to improve the effectiveness of public procurement, saving time and money through competitive prices and reduced process time, while ensuring the transparency and integrity of the system”.
“The main benefits of this project through the implementation of best international practices in public procurement will be maximisation in the use of public resources and promotion of greater agility and transparency in their utilisation,” the bank added.
“Beneficiaries will include government ministries, departments and statutory bodies as well as suppliers to the public sector and the Barbadian population, in general.”
This suggests that Barbados is moving to a system that does not simply deal with the purchase of items and services, but one that seeks to achieve financial viability, overall efficiency, and one that is free from corruption.
This is not an issue that is peculiar to Barbados. It is an issue that other Caribbean countries have confronted or will have to face in the future.
In a paper on Public Procurement In The Caribbean: Confronting The Challenges And Opportunities, Dr. Sandra Schrouder, assistant professor of public administration at Barry University in Miami Shores, Florida, pointed to a World Bank estimate that expenditure on public procurement is likely to account for approximately 15 to 20 per cent of the GDP in developing countries.
“It has become abundantly clear that public procurement is an important aspect of management within the public sector. In fact, the impact of procurement activities on national businesses and the economies of developing countries is often extremely significant and ought not to be taken lightly,” Schrouder said.
“Several developing countries are now cognisant of the importance of procurement and recognise that it is an area that is often vulnerable to mismanagement and corruption, many of these countries have therefore instituted programmes and policies aimed at streamlining procurement efforts alongside government goals.”
The challenge for small countries like Barbados, the paper said, was that given their small size in comparison to large nations, “procurement budgets for Caribbean territories further pose a real challenge for these economies”. They were “not in a position to negotiate huge trade discounts or even purchase supplies in bulk at a cheaper rate, especially when they are trading on the world market”.
“The procurement process in the Caribbean faces other major challenges of buying on the international market, including limited foreign currency reserves and a fixed exchange rate system that often drives up the price of their imports overnight,” the researcher said.
Based on her recommendations on how the Caribbean could improve its procurement, the plans that Barbados have outlined for improvements suggests it is on the right.
Schrouder recommended: an executive agency to centralise the process, a focus more on productivity, improvement in data collection, and a modernisation and skill upgrade.
These and other steps are important considering the findings of a previous CARICOM study on procurement in the region.
The findings included: competitive public procurement regimes that were in disarray and dysfunctional; outdated legislation; “extremely weak” procurement capacity; “inadequate” internal and external procurement controls; and the “major problem” of procurement-related corruption.
CARICOM has taken a number of steps since this report was released in 2003.
This started in 2005 when the first draft of the Community Policy on Public Procurement was developed and disseminated to member states for review.
Last year CARICOM issued a framework on public procurement. Its primary objective was “the full integration of the national procurement markets in member states into a single, unified and open area”.
Work has continued on this and related efforts.
