This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide.
In its July 2020 decision in Gorstew Limited v. The Contractor-General, the Supreme Court of Jamaica ruled that the Contractor-General (OCG) did not have the jurisdiction to investigate government land sales or land purchases since those contracts fell outside of Jamaica’s procurement statute and outside of OCG’s procurement review powers. The dispute dealt with the OCG’s review of certain government land deals. A private party involved in one of those deals brought a legal action challenging the OCG’s jurisdiction. The issue turned on the meaning of “government contract” in the Contractor-General Act, which, as the Court noted, did not define those contracts to expressly include “a sale or divestment”. After a detailed interpretive analysis, the Court ultimately determined that the purchase and sale of land by government institutions fell outside the scope of the Act:
If the Act had been held to cover all contracts entered into by the government then of necessity “award” would have to be understood in the broader context as suggested by counsel for the defendant. However as I have agreed with Wolfe J that “government contract” as used in the Act was restricted in its scope and limited by the words, “for the carrying out of building or other works or for the supply of any goods or services”, then the narrower technical meaning of award is indicated. In this instance the meaning of the word does not assist to define the scope of the Act. Rather it is a definition of the scope of the Act, the entire Act having been considered, including the way in which the word award is used and the need for internal consistency in the legislation, that yields the true meaning to be ascribed to “award.”
I therefore agree with the submissions made by counsel for the claimants that the contracts about which the Act is concerned are those that flow from a tender and award process; which was not the process engaged in this instance. This therefore provides an additional basis for the finding that the Contractor-General is not empowered to investigate the sale.
The Court determined that the OCG therefore lacked the jurisdiction to investigate the land sale in question.
As this case illustrates, in certain jurisdictions, the scope of procurement oversight is limited to government spending on contracts for goods, services, and construction. Contracts for the purchase and sale of assets including land, as well as other revenue-generating concession contracts, often fall outside the scope of procurement oversight rules and, in the absence of a parallel regulatory system, can fall into a grey zone of ad hoc governance. Public institutions that operate in jurisdictions where the purchase and sale of government assets and the award of concession contracts is not regulated under procurement rules or parallel regulations should establish their own open tendering procedures for those contracts to better ensure that these transactions are administered in a defensible and transparent manner.
