This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide.
In its November 2019 report entitled Audit of Fiji Procurement Office and the Construction Implementation Unit, Fiji’s Auditor General found that inadequate staffing and resourcing contributed to long delays in the tendering process, in contract awards, and in contract performance. The Auditor General called for improved procurement planning and staff resourcing, and the implementation of tendering and contracting templates. The Auditor General also recommended the implementation of an annual procurement plan to better assist in procurement planning and avoid procurement delays.
With respect to staffing issues, the Auditor General found high staff vacancies due to high staff turnover and a lack of skilled workers and technical staff:
There are vacancies in the Unit due in part due to the high turnover of staff. Technical specialists in the construction industry are high demand due to a lack of skilled workers and a shortage of experienced technical staff in the country. CIU has recruited technical staff and has implemented mechanisms to retain skilled workers through job evaluation reviews and remuneration packages that is comparable to market.
The Ministry further emphasised that annual budget drives procurement. The number of tenders depends on the annual budget strategy. As a strategy the Ministry through FPO has been focusing on making processes efficient and removing red tape to counter fluctuations in demand for Ministry’s human resources.
To address these issues, the Auditor General recommended that the government undertake a proper assessment of institutional capacity and develop a strategy to strengthen those institutional capacities.
The Auditor General also found that after it was amalgamated with another part of government, Fiji’s Procurement Office (FPO) failed to fulfil its statutory duty to conduct procurement compliance assessments. The report recommended that those assessments be reinitiated to better ensure that government procurement practices complied with regulatory requirements:
Absence of the Compliance Assessment Function of the Fiji Procurement Office
The functions of the Fiji Procurement Office are to regulate and administer the procurement of goods, services and works for the Government of Fiji. These include conducting compliance assessment of procurement functions and activities across the whole of Government.
The Director shall periodically inspect and carry out compliance checks on the procurement procedures in Ministries or Departments and report thereon to the Permanent Secretary of the Ministry or Department concerned and the Permanent Secretary for Economy.
From 01 August 2018, the FPO undertook a restructure that sees the Compliance Unit being absorbed into the Internal Audit & Good Governance (IAGG) Division. Upon audit enquiry, it was noted that only the officers/posts was transferred but no instructions received by the IAGG Division on the function carried out by the Unit. It was also noted that the role and functions of Compliance Unit has been changed, as it no longer carries out the function it was established to perform but taking up the functions of IAGG Division.
The result is that the FPO has been unable to perform its functions under section 5.2 (iv) and 8.1 (e) of the Procurement Regulation 2010 ever since the restructure took place. In addition, activities such as procurement audits, special investigations, development and implementation of sound procurement controls, advice and guidance on all standing offer contracts, monitoring of tender process, advice to Government Tender Board, and compliance checks of the Government Tender Board papers before it is presented to the Board members are no longer carried out by the Office.
The above results indicate that the FPO is unable to comply with the Procurement Regulation 2010. Being the monitoring arm of the FPO, the de-establishment of the Compliance Unit increases the risk of non – compliance to procurement regulation, policies and procedures at whole of government which may result in significant loss of public funds. In addition, it increases the risk of high litigation as there are no checks conducted on the procurement of standing offer contracts, non-compliance to Standing Offer contracts that may result in substantial loss to government when purchasing on higher prices, overcharging by contracted vendors and supplying of inferior products may increase, and no advice and control mechanisms in place on Standing Offer contracts.
The Auditor General also found that the lack of procurement planning at the agency level led to unpredictable work surges that undermined the FPO’s ability to manage projects and avoid procurement bottlenecks:
The lack of procurement planning at agency level heavily affects the operations of the FPO. This has resulted in inconsistent flow of procurement projects flowing through the procurement process during the period under audit. It also puts pressure on the capacity of the FPO at different times and creates bottlenecks along the procurement process at certain times which has resulted in prolonged time taken to process procurements at times.
The Auditor General recommended that the FPO prioritize proper procurement planning through the development and execution of an annual procurement plan, the development of standard tendering templates and contract documents, and the better co-ordination and oversight of evaluation committees. The Auditor General also recommended that the FPO accelerate the finalization of its procurement guidelines to better support the government’s procurement functions.
