A report in this paper the other day made some disturbing disclosures about the lack of transparency and violations of procurement rules in various government departments and corporations. As the report recalled, the government had set up the Public Procurement Regulatory Authority (PPRA) back in 2002 with a view to improving governance, management, transparency, accountability and quality in the procurement of goods and services.
In consultation with various stakeholders last year, PPRA framed Public Procurement Rules, 2004, which were circulated among all concerned and also posted on the Authority's web site. Yet, in most cases, these rules are not being observed.
What is even worse is that when, a few weeks ago, the PPRA brought the issue to the notice of the Cabinet Committee on Regulatory Bodies (CCRB), it received a response that makes little sense. The Public Procurement Rules, it was told, should not be made applicable to the companies that are registered under the companies law, since they have their own set of rules for procurement. It was further told that these rules do not apply to public sector corporations either whose shares are traded in the stock market.
The CCRB seems to be oblivious of the fact that the public is resentful of such exemptions for the simple but important reason that they negate transparency and, consequently, accountability also. Already a substantial body of public opinion is opposed to the existing blanket exemption accorded to defence procurements. Not all defence procurements fall within the description of sensitive military equipment that may deserve a certain level of secrecy.
Moreover, aside from their own administrative machinery, there are a number of areas within the purview of the defence establishment, such as the national airline, that have nothing to do with the acquisition of sensitive defence materials.
Hence, it is commonly argued that these need to be placed before Parliament's public accounts committee for scrutiny. So far as the CCRB's argument that public sector corporations have their own laws is concerned, it too does not hold water. The company law does not cover sales and purchases.
PPRA also told CCRB, that among the Public Procurement Rules that were being violated by public sector corporations was the one that called for transparency in making bid evaluation reports public. The heads of all ministries and directors of companies, it rightly demanded, should be obligated to follow the rules and send compliance reports to it. And further the existing provisions and practice pertaining to uncritical acceptance of the lowest bid, absence of strict pre-qualification, and failure to post all these details on PPRA designated web site need to be taken care of.
Unfortunately, CCRB's answer to these eminently reasonable suggestions, again, was that public listed companies as well as public sector corporations whose shares are traded in the country's stock markets remain exempt from these rules. A telling example of how such exemptions can lead to undesirable practices has just surfaced.
Another Recorder Report disclosed that during the last two weeks alone the OGDC, whose shares are traded in the stock market, issued tenders worth 25 million dollars on the basis of limited or single source inquiries, thereby foreclosing the possibility of a healthy competition.
This is questionable on grounds of propriety and business sagacity, as also for depriving some sound potential bidders the opportunity to participate in OGDC's various exploratory projects. The placing of tender notices on the Internet would have ensured transparency to the mutual benefit of the corporation and the bidders.
The case highlights the need for Prime Minister Shaukat Aziz to sort out the ambiguity about the Public Procurement Rules that has been caused by PPRA's and CCRB's differing interpretations of these rules' applicability.
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