By Paul Emanuelli and Bethany Pentesco
In times of emergency, it is within the government’s power to bypass open tendering and use emergency purchasing measures. However, governments must ensure that they are transparent and hold the process accountable to applicable procurement laws. When government entities go outside the rules to award contracts, those decisions become subject to controversy, and in some cases, the contracts can be voided. This wastes time and money in times of crisis, when efficiency and transparency should be key.
For example, on April 7, 2020, in “It is important to disclose information on purchasing respirators during an emergency”, the Serbian Monitor reported that Transparency Serbia is calling on public authorities and health institutions to release key information surrounding the procurements that have taken place since the introduction of the state of emergency. Many procurements are not following normal tendering processes and, in some instances, are being conducted on social media instead of the public procurement website. Transparency Serbia reminds the public that the Public Procurement Law is still in place, even during times of emergencies, and that government agencies are still required to act “in accordance with the principles of law”.
Also, on April 7, 2020, in “DP Demands Transparency on Four Tenders”, the Albanian Daily News reported that the Albanian government secretly awarded four tenders. The opposition Democratic Party asked why these tenders were classified as “state secret”. In a further Albian Daily News article entitled “Opposition Pushes Govt to Reveal Four Tenders’ Files”, reported that the four secret 24-hour tenders were COVID-19-related; however, this did not exempt the contracts from the transparency and value-for-money standards for publicly accountable procurements.
On April 9, 2020, in “PM under pressure to probe medical procurement deal”, My Republica reported that the Ministry of Health and Population of Nepal awarded a Rs 340 million procurement deal that left party leaders and opposition party members questioning the accountability and transparency of the process. The deal was awarded to a company, OMNI Group, without open competition, for three times paid by private hospitals, and without any promise that the company would be able to supply the logistics on time. As reported in on April 2, 2020 in “Govt scraps contract with Omni Group“, The Himilayan Times, the same COVID-19 testing kits also failed to meet the World Health Organisation’s standards. The government ultimately scrapped the deal.
On April 13, 2020, in “White House directed FEMA to grant $96 million no-bid coronavirus contract”, Salon reported that AirBoss “provided an unsolicited offer to the [US] Government which was found to be acceptable.” The US Government then ordered the Federal Emergency Management Agency (FEMA) to award the contract, worth $96 million, to the company, without putting the contract out to tender. The contract award left Americans wondering why the Government would choose a Canadian vendor, when there are similar products made by other American vendors and as this single, no-bid deal made up two-thirds of the money spent on COVID-19 through April 8.
The US continued to make headlines as reported on April 16, 2020 in “The Trump administration awarded a $55 million contract to a bankrupt company with zero employees for N95 masks, which it’s never manufactured” in Business Insider. It was reported that the Federal Emergency Management Agency (FEMA) awarded a contract worth $55 million to a company that had reported bankruptcy in 2019. One of the owners also stated that the company hadn’t had any employees since May of 2018. The company, Panthera Worldwide LLC, specializes in tactical training for the US military, while the contract was awarded for the production of N95 masks. Panthera promised to deliver the masks by May 1, 2020, through a connection they have in the military. FEMA is reportedly paying $5.50 per mask, with competitive companies selling their masks for $0.63 per mask. As the article reported, FEMA confirmed that due diligence was shown and they believe the company will be able to produce the masks within the timeframe, regardless of the background of the company.
As these news articles illustrate, even in times of emergency, governments remain accountable for transparent and compliant procurement practices that are based on due process standards and the expectation of ensuring efficiency and best value-for-money.
