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Pati request details value-for-money rules waived almost 70 times

Waived off: the Bermudian tender heading to the US for a refit last September. The Office of Project Management and Procurement approved a waiver for the $4.5 million job (Photograph by Mark Bean)

A set of good governance rules was ushered in by former premier Paula Cox more than a decade ago to ensure tighter control of the public purse strings and root out bias in the awarding of government contracts. The Royal Gazette looks at some of the activities last year of the public body tasked with enforcing the Code of Practice for Project Management and Procurement

Government rules to ensure best value for money for taxpayers were waived 69 times in the last financial year for contracts and services worth almost $37 million.

A record released by the Office for Project Management and Procurement shows that it received requests for waivers from 21 public authorities between April 1 last year and March 31 this year.

The waivers enable the civil servants who control Bermuda’s purse strings to bypass rules that require them to ensure that “all procurements … follow the principles of open and fair competition to obtain the best value for money”.

In exceptional or emergency circumstances, the OPMP’s director can be asked to waive certain requirements, such as the need to get three quotes for contracts worth $100,000 or more.

Big-ticket items for which waivers were approved by the OPMP in 2022-23 included $5.8 million for 40 electric buses from China and a $4.5 million contract for a mechanical overhaul of the Bermudian ferry.

The office also granted a waiver to the public works department to purchase two BMW hybrid vehicles from Bermuda Motors, costing $300,000 in total, for the Governor and the Premier.

However, a decision was made to buy much cheaper cars — two Kia Seltos that cost $25,000 each — so the waiver was not needed.

A public works spokesman said: “Waivers were sought for the purchase of the vehicles in anticipation of the desperately needed replacement of both official cars.

“However, a more fiscally prudent option was pursued and the waivers were not required. The vehicles were never purchased and there is no plan to purchase them as the official vehicles.”

In that instance, the OPMP noted that Bermuda Motors had exclusive rights for the BMW brand on the island.

The record does not show, in the majority of cases, the reasons that public officers gave for needing to depart from the Code of Practice for Project Management and Procurement rules.

The OPMP’s information officer, who disclosed the record in response to a public access to information request, told The Royal Gazette: “For the avoidance of doubt, we retain the right to provide information on a discretionary basis; therefore, names of public officers requesting waivers along with specific departmental comments are intentionally omitted.”

He added: “The code is very clear in Section 6, whereby ‘exceptional’ and ‘emergency’ procedures are defined … most of the waiver requests are for ‘exceptional circumstances’.

“Seldom do we receive a request in an ‘emergency’ situation unless there is imminent danger to persons and/or pending natural catastrophe.”

Big-ticket purchases

$5,792,000 Department of Public Transportation to procure 40 electric buses from Xiamen Golden Dragon

$4,500,000 Department of Marine and Ports to pay Gladding Hearn Shipbuilding to replace all mechanical systems and equipment on the Bermudian ferry

$4,250,000 Department of Works and Engineering to replace two existing cranes and associated equipment and controls from Konecranes America

$2,777,000 Bermuda Fire and Rescue Service to pay Pro-Tec Fire Services and Fire Emergency Services Training Institute to extend the contract of the “existing ten overseas firefighters, to provide 25 additional firefighters and to provide training and certification”

$2,000,000 Ministry of Finance HQ to procure investment bank services from HSBC and Goldman Sachs. Reason: “Government plans to refinance upcoming maturities, [permission sought] to waive advertising this opportunity.”

$1,740,000 Department of Customs to procure maintenance services in relation to specific, supplied products for three years from Nuctech Company

$1,337,524 Works and Engineering to procure services for the proposed turbine overhaul project from Siemens Energy

$510,960 Fire and Rescue Service for accommodation for six months for 30 firefighters at the St George’s Club

The Auditor-General, Heather Thomas, recently found multiple violations of the Government’s rules on contracts worth $100,000 or more in relation to the Covid-19 travel authorisation programme.

In a damning report, she wrote: “The Code of Practice provides provision for waivers and emergency procedures for the acquisition of goods and services … these waivers and procedures were not sought with respect to the acquisition and/or implementation of the Government’s Travel Authorisation Portal.”

The record released by the OPMP, in response to a public access to information request from the Gazette, shows that for the 12-month period in question it approved 69 waiver requests, rejected three requests and found a waiver was not needed in four cases.

The Bermuda Police Service submitted the most waiver requests (16), followed by the Department of Public Transportation (10).

All three rejections involved the Department of Education, which asked for waivers in January and February this year in relation to internet and information technology services from Digicel and LinkBermuda, as well as the renewal of a licence with a company called PowerSchool Group.

The OPMP noted that it was unable to grant waivers on a retroactive basis.

If the director of the OPMP finds that any requirements of the code have been waived by an accounting officer without following the proper procedures, they report the breach to the Cabinet Secretary, “who must decide whether disciplinary action or report to another agency may be appropriate”.

However, it is not clear how enforceable the code is.

The office’s information officer told the Gazette that the OPMP provided “advice and guidance to public officers and private sector organisations and persons in the interest of fairness and transparency …”.

Section 33 of the Public Treasury (Administration and Payments) Act 1969 says the Minister of Finance will “make regulations … containing the Code of Practice for Project Management and Procurement …” using the negative resolution process.

However, in a recent civil court case brought against the Post Office by Mailboxes United, lawyer Eugene Johnston, representing the Government, described procurement regulations as null and void because the Government failed to have them officially gazetted.

The Gazette asked the Cabinet Office if Mr Johnston was correct but there was no answer to the question by press time.

In response to questions about the waivers approved by the OPMP in 2022-23, a government spokeswoman said: “It should be noted that a minister has no role in granting waivers.

“The procurement code is clear — waivers are requested based on exceptional or emergency circumstances, as defined in the code.

“These are approved by the OPMP department in accordance with the Code of Practice.”

She added: “Given the range of public sector services, exceptional circumstances will inevitably vary from one department to another.

“The OPMP supports accounting officers in ensuring compliance with the rules as set out in the code.”

The spokeswoman said the OPMP’s 2022 annual report had been prepared and would be tabled in the House of Assembly once reviewed.

Waivers: the numbers

There were 76 requests for waivers made by 21 public authorities between April 1, 2022 and March 31, 2023.

The value of the purchases involved totalled $36.9 million.

The Office for Project Management and Procurement approved 69 requests, rejected 3 from the Department of Education because they were late, and found that waivers were not needed in 4 cases.

The record released by the OPMP does not show if purchases or contracts went ahead, only whether a waiver was approved or not.

The Bermuda Police Service requested 16 waivers, the most of any public authority, followed by the Department of Public Transportation, which asked for 10.

Month: Value of purchases

April 2022: $2,301,153

May 2022: $357,713

June 2022: $8,149,414

July 2022: $3,610,450

August 2022: $8,598,437

September 2022: $1,062,082

October 2022: $1,399,269

November 2022: $2,402,554

December 2022: $1,167,895

January 2023: $1,306,001

February 2023: $5,228,613

March 2023: $1,357,796

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Published May 29, 2023 at 7:56 am (Updated May 29, 2023 at 8:11 am)

Pati request details value-for-money rules waived almost 70 times

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