This article is an excerpt from the 2023 edition of The Art of Tendering: A Global Due Diligence Guide.
In its March 2022 Report of Investigation Concerning Allegations of Fraud in relation to the Registration and Issuance of a Notification of an “Approved Supplier of Goods and Services to the Government of Jamaica” Letter to Elegant Weddings, Event Planning and Catering Limited, Jamaica’s Integrity Commission raised concerns over the administration of the government’s contractor registry system. The report recommended that the government update its procedures to avoid the risk of fraud and arbitrary decision-making. This case study serves as a useful reminder to all public institutions that supplier prequalification procedures remain subject to due process standards.
The Commission determined that the registration process under review was improperly administered since the supplier in question was improperly granted “conditional approval” but was then summarily removed from the registry without further notice. After noting that supplier registry applicants are entitled to natural justice, the Commission determined that the conditional approval — and the subsequent removal — failed to follow proper procedures. With respect to the improvised conditional approval, the Commission warned that “the apparent introduction of this ‘conditional approval’ has the potential to undermine the integrity of the Contractor Registration process thus rendering it susceptible to the perception of bias, arbitrary decision making and corruption.” Further, with respect to the subsequent summary removal of the supplier, the Commission found that the arbitrary removal was unfair and offensive to the principles of natural justice. The Commission recommended that the government cease the practice of granting conditional approvals until it has established an administrative framework to manage those approvals. The Commission also recommended that the government improve its security procedures to control against fraudulent certifications.
As this case study illustrates, public institutions should ensure that their supplier prequalification procedures meet due process standards since those procedures may be subject to audit review or potential legal challenge.
