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michaelfalzon
Michael Falzon

A necessary evil

Reports of Public Procurement regulations being breached or even ignored are not uncommon. Such situations are an indication of bad governance, of course but it is obvious that these regulations are a 'necessary evil'

michaelfalzon
Michael Falzon
10 October 2017, 7:30am
Without entering into the merits of any particular case, it is obvious that these regulations are a necessary evil. They are there to ensure that the procedures used for the award of works contracts and for purchases of goods or services made with public money are clear, just, transparent and reflect accountability. 

The Public Procurement regulations govern the award of any contract by a state entity – including any entity where the state has a majority of shares – otherwise known as a public contract. This is defined by law as ‘any contract for pecuniary interest concluded in writing between one or morwe economic operators and one or more contracting authorities and having as their object the execution of works, the supply of products or the provision of services’.

The most glaring innate problem with them is that observing them – as one should – does not necessarily lead to the optimum the state entity could have obtained. Even worse is the length of time that observing the regulations must necessarily lead to. Moreover bidders who do not win a contract have a right to appeal against the decision – a process that continues to lengthen the time until the final award is made.

In spite of the rules, controversies about contracts awarded by state entities are always with us. 

Instances of disagreement between government entities and the Department of Contracts that has a final say in contracts valued above an established threshold – now raised to €250,000 – abound. This does not make the process any more efficient, of course.

One problem is that the regulations do not allow for negotiations and one could argue that direct negotiation with bidders could lead to a conclusion that is more advantageous to the state entity doing the purchasing. But bargaining behind closed doors – or even oral haggling – of the sort that is very common in deals between private entities is everything but transparent and is undoubtedly open to abuse.

Deciding which offer is to be accepted is not always an easy matter, either. It is not just an issue of price – although the Contracts Department traditionally always opts for the lowest bid. Sometimes there are complicated technical issues with different offers not leading to an easy comparison between apples and apples. For example, one can buy cheap equipment that uses a lot of electricity and is expensive to maintain while an apparently more expensive offer turns out to be cheaper in the long run. Different technical methods used to compare such bids could lead to different answers. Should those who are requested to work out the real comparison be trusted blindly? Arguments about technical reports are therefore also the order of the day. No wonder conspiracy theories about the award of tenders are never in short supply.

The regulations are there to avoid abuse. This does not mean that people have not found ways how to abuse while apparently observing them. Laws written by humans can never be one hundred per cent fool proof. As the Roman adage went: ‘Facta lex, inventa fraus’ – as soon as a law is enacted, human beings invent how to defraud it. Moreover there are people who observe a Pharisaic obedience to the letter of the law when in fact the law is being fundamentally breached, at least in spirit. Yet ignoring the law can never be justified because it leads to worse situations, in which transparency and accountability are completely discarded.

Laws are necessary in spite of the fact they are often broken. 

Ensuring transparency and avoiding abuse is the paramount aim of the regulations. In truth there is no way how to take quick, good decisions in procurement that would be also transparent and clearly just. Instead, the country has to, willy-nilly, adopt processes that take a long time and incur more expenses.

Where public money is involved, doing things above board in a transparent way is more important than getting the best bargain. 

That is the price that the country must pay to ensure transparency and accountability. 

 

Is the dust settling?

The news that all new PN officials will be elected by 23 November, rather than by the end of the year, is welcome. The quicker the dust settles in the PN ‘battlefield’, the better it is for everybody. 

Malta needs urgently to become a fully-fledged Parliamentary democracy again. The results of the election in June were interpreted by some observers as the death knell of the Nationalist Party, with some predicting that the country is moving towards a one-party state. This is utter nonsense, of course.

I do not think this will ever happen for various reasons, including the gut-feelings of the Maltese people and their litigious nature, to say nothing of the country’s traditions. In spite of the constant war of words between our two main political parties, they realise that both of them have an important role to play in the democratic process. 

"Public procurement rules are there to avoid abuse. This does not mean that people have not found ways how to abuse while apparently observing them"
Prime Minister Joseph Muscat has just celebrated the first 100 days of his second administration –100 days that people will long remember more for the internal strife within the PN brought about by a ferocious campaign (including ‘foreign’ interference) for the election of a new party leader than by whatever the Muscat administration achieved in the period.

This is also a sign of the democratic credentials of the Maltese people. There are, of course, fanatics on both sides of the political chasm that see things as being only in black or white; where one side is always right and the other is always wrong.

Fortunately many Maltese are not so blinkered. And they realise that the country has benefited immensely from the alternation of power between the two main parties. 

People also realise that parties in government always arrive at a point where they become a spent force and must do a spell in the opposition to recharge their batteries.

I have always had faith in the collective wisdom of the Maltese people and I do not see anything that makes me change my mind.

michaelfalzon
Michael Falzon is a former government minister who served under several Nationalist admini...
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