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These new Regulations mark a complete overhaul of every aspect of procurement law and practice, from major strategic changes (new procurement methods, public to public collaboration, replacement of “Part B” with the light touch regime, social and community benefits, etc) to changes to everyday practice (shorter time limits, e-procurement and more flexible procedures).
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More Than Just Buying Stuff: New Procurement Regime
1. 1
“More than just buying stuff”
New Procurement Regime
Cayman Islands Government
Peter Gough JP
2. The Old Way
• Open tendering only
• RFP advertised in the newspaper
• Sealed envelopes delivered
• Open by Central Tenders Committee
• Copies Made
• Technical Advisory Committees formed, provide
recommendation
• Central Tenders Committee recommend award to
Manager 2
3. Introduction
• Procurement of goods, works and services is a major
component of the Governments expenditure it is the
second-largest category of expenditure of $720 million
after human resources.
– Supplies and Consumables - 27% of total
expenditure
– Personnel Costs - 49% of total expenditure
• CIG has 55 HR professionals only 2 Procurement
professional
• New procurement law & regulations 1 May 2018 3
4. Auditor General Observations
Two reports from Office of Auditor
General in 2011 cited:
• Value for Money not realized
• Lack of transparency
• No procurement expertise
• Political interference
• Risk of Fraud and corruption
• Board involvement in procurement
• Lack of corporate procurement
information
• No fundamental principles for
procurement
• No policy for local business
development
• No business cases for procurement
• No code of conduct for persons
involved in procurement
• Only one procurement method (open
tendering)
4
5. Objectives of the new Law
and Regulations
• Improving Governance
• Increasing Transparency
• Improving Reporting
• Limiting political involvement to
the policy level
• Improving Value for money
• Providing different procurement
methods
• Improving procurement
management information
• Developing a Procurement Code of
Conduct
• Developing a Local business
development strategy
5
6. CIG- Definition of Procurement
• Procurement is the whole process of acquisition from
third parties and all covers goods and services
• Spans the whole life cycle from initial concept
through to the end of life of an asset or end of
services contract.
6
7. New Central Procurement Office
Two person Central Procurement Office
• Developing regulations, policy, related documents and
procedures
• Training and guiding all Public Officials
• Ensuring laws, regs, policies & procedures are accessible
• Monitoring compliance
• Advising the Public and the Entity Procurement Committees
• Compiling statistics on government wide procurement
• Move to eProcurement
7
8. Procurement Exceptions
• Procurement between
entities;
• Procurement during
emergency situations;
• Contracting for
employment;
• Acquisition or disposition
of land
• Education, accreditation or
conferences
• Postage and subscriptions
for newspapers, magazines
and periodicals
• Purchases from regulated
utilities
8
9. Role of the Cabinet (Politicians)
• To formulate and implement procurement policy
that promotes the government’s economic and
social objectives.
• No involvement in procurement decisions
9
10. Public Procurement Committee (PPC)
• Governor appoints Chair + three members (Advice of
Premier)
• not be public servants ( one to be attorney at law)
• Leader of the Opposition recommends one member
• not public servant
• Deputy Governor recommends three civil service members
10
11. Role of Public Procurement Committee
Provides external oversight of the public procurement process
• thresholds $250,000 +
• Reviews business case
• Reviews solicitation documents to ensure it represents the business case
• Receives and receipts bid submissions $250,000 +
• Ensures fairness, impartiality and confidentiality in the treatment of bid
submissions in its possession
• Agree sole source procurement
11
12. Role of the Entity Procurement Committee
Chief Officer appoints a chairman and minimum of 2 persons
• Thresholds $100,000 to $250,000
• Reviews business case where required
• Reviews solicitation documents to business case
• Receives and receipts bid submissions $100,000 to $250,000
• Ensures fairness, impartiality and confidentiality in the treatment of bid
submissions in its possession
• Provides technical evaluation to PPC for bids over $250,000
• Agree sole source procurement
12
13. Procurement Code of Conduct
Addresses conflict of interest;
• Governs the conduct of Public Officials involved in procurement
• Governs the conduct of suppliers seeking to do business with
government
• A breach of the code of conduct by a public servant will constitute grounds
for disciplinary action
• A breach of the code of conduct by a supplier will constitute grounds for
sanctions to be applied which may preclude them from future government
bidding opportunities
13
14. Project Appraisal and Business Case Requirement
• Below $100K no formal
business case is required
• Between $100K to <
$250K a written business
case is to be submitted in
the format specified by the
Chief Officer
• $250K or greater a
written business case is
to be submitted in a
specified the format
• $10M + a written
business case, local
impact assessment and
industry consultation is
required and is submitted
for review to the Public
Sector Investment
Committee (PSIC
14
15. Direct Award Process or Sole Source
• A Direct Award process, is where the contract is awarded
without using a competitive process to a pre-identified supplier
• It must be documented and justified
• Approval for commencing the Direct Award process must be
obtained by the PPC or EPC
• Over $100K requires the approval by the PPC or EPC
dependent on threshold
• Must be publicly reported within 30 days
15
16. Direct Award Process
Exceptions to competitive process:
• One-of-a-Kind: goods or service has no competitive
product and is available from one source
• Compatibility and Continuity: goods or service must
match existing brand
• Replacement part/item: replacement part/item for a
specific brand
• Unique design; goods or service only one supplier;
• Public interest; Where goods or services are
confidential and could compromise defense, security, or
public safety 16
17. Cayman Islands Economic Development Preference
• Assess value for money, the
broader socio-economic
impact and benefits
• Solicit bids from Cayman
registered companies, where
adequate local capability
exists
• Informing the local supplier
community of upcoming
procurement projects
• Avoiding use of restrictive
specifications which may
preclude capable suppliers
17
18. Public Notice of Opportunity
All procurements are to be:
Publicly advertised on a website designated by
the CPO
Open for a minimum of 15 days (clock starts at
time of advertisement)
Supplemental advertising locally is an option
18
19. Competitive Procurement Methods
• Open tendering;
• Restricted tendering;
• Request for quotations;
• Request for proposals without negotiation;
• Two-stage tendering;
• Requests for proposals with dialogue;
• Request for proposals with consecutive negotiations;
• Competitive negotiations;
• Electronic reverse auction.
19
22. 22
• Orbidder drafts solicitation document
using series of carefully designed
questions
• Orbidder creates a customized RFP for
each project.
• Orbidder instantly assembles the final
tendering document
23. 23
• Online vendor portal to solicit and receive
submissions.
• Evaluation tools and workflows to engage
stakeholders.
• Contract and performance management to
centralize contract documents
• Portal for all procurement information
24. Acceptance of Bids
Authority to award contracts:
• <$100K the approval of the Head of Department
responsible and their Chief Officer is required
• At $100K to < $250K the Chief Officer may approve on the
advice of the Entity Procurement Committee
• At $250K or greater the Chief Officer may approve on the
advice of the Public Procurement Committee.
24
25. Debriefing Bidders
• Unsuccessful suppliers can request debriefing within 30
days of the supplier’s request,
• Focus on how the supplier was evaluated against the
evaluation criteria and not other bids
• Not an appeal of negotiation
• Purpose is to assist suppliers to bid more competitively
in the future
25
26. Publication of Contract Award
Publication within 30 days of award of contract must be
published on the website.
Information includes:
• the name of entity;
• a description of the goods or services being procured;
• the name of the successful bidder;
• the total contract value.
Below $10K a notice of award will be published within 1
year of the award. 26
27. 27
=1062 Reams saved
=106 boxes of saved
Saved 531,382 Sheets of Paper
=35 Trees saved
Environmental Impact of eProcurement
on Government in 18 months
Environmental Impact of eProcurement on
suppliers
= 100 Trees saved
There was a lack of procurement expertise in the Cayman Islands Government
Contracts were being awarded secretly, no one new who was getting what
Expediency was more important than competitive supply or value for money
Politicians interfering in procurement, major scandal
Board members influencing procurement decisions
No bulk purchasing, office supplies every section going to the shop to buy a pen
Purchasing from overseas to save money had impact on the islands economy
Increasing Transparency
All purchases that CIG make have to be published on the web site
Over $10,000 within 30 days of contract signed
Under $10,000 every financial year
Limiting political involvement to the policy level
Politicians excluded
Board Members excluded
Improving Value for money
Business cases mandatory before procurement
Competitive supply for all purchases, sole source an exception and justification has to be published
Providing different procurement methods
Reverse auctions
Improving procurement management information, we did not know what we were buying as an organisation , no leverage for bulk discounts
More holistic approach to procurement
Changed the culture from just buying stuff to professional procurement, staring with the business case asking the question why monitoring through to the end of the contract
Changed the culture of the organisation
Politicians are not allowed to get involved in operational decisions with regard to procurement.
Agree budget, agree business case
Public Authorities , Board Members are the same, left to the Chief Executive
Transperancy
Community Oversight
Doctor, Retired Architect , Law Lecturer, Real Estate Developer
5 Private Sector 3 Civil Servants
Committee members to have:
skills, knowledge, (procurement, legal & financial) integrity and politically neutral manner; and
no financial or other interest likely to affect prejudicially the exercise of his functions as a committee member
An approved business case :-:
Demonstrate the economic need for the project
Fully costed, risk and impact assessment
Recommend the procurement method to be utilized
Specify the benefits the project is designed to deliver
Consider options to promote positive economic development of the Cayman Islands
Ensure that an informed decision can be made on whether or not to proceed to the procurement stage.
Budget for project
Exceptional circumstance
Encourage local businesses, balance value for money and economic development
Some examples
Reverse e bay, can last 3 minutes or 5 days
Don’t know who they are bidding against
Price only bidding
Specification of which drugs are already agreed
Anti-viral $30 now $1.50
We have gone fully automated using orbidder and Bonfire
Facility for small companies without computer access
Financial savings on paper and printing costs, storage of documents more convient for overseas suppliers to bid, don’t need fedex any more