Non-compliant operators should be 'blacklisted', Chamber of Commerce says

Non-compliant operators should be blacklisted from public procurement, the Chamber of Commerce is proposing in a newly released document

Chamber President David Xuereb said the document builds on the report published last year on ethical business, which provided a manifesto for good governance as the political turmoil in 2019 came to close
Chamber President David Xuereb said the document builds on the report published last year on ethical business, which provided a manifesto for good governance as the political turmoil in 2019 came to close
SHARE

Non-compliant operators should be blacklisted from public procurement, the Chamber of Commerce is proposing in a newly released document.

The proposal is one of 36 recommendations made in the report Public Procurement Reform that was published yesterday.

The document touches on market research, performance of public contracts, and the use of direct orders in public procurement. However, the over-arching principle is that better transparency and complaince is needed in all steps of the procurement process.

Chamber President David Xuereb said the document builds on the report published last year on ethical business, which provided a manifesto for good governance as the political turmoil in 2019 came to close.

“The document serves as valuable guidance for the necessary reforms that are needed in order to ensure that economic operators are on a level playing field when tendering for government purchasing opportunities,” Xuereb said.

Clement Mifsud-Bonnici, who was appointed as technical advisor on the report, emphasised the need for a stronger culture of compliance, and in turn the blacklisting of any economic operators that have breached the law.

"Compliance with the law comes at a cost. It's not right that certain economic operators remain compliant while others don't," he said.

Mifsud-Bonnici argued that there is scope for public authorities, including the Department of Contracts and the Inland Revenue Department, to create systems of seamless integration to prevent economic operators from submitting any bids if they have pending social security or tax dues, and if there is no settlement agreement in place.

“Companies should submit audited financial statements with the Malta Business Registry in the timeframe as required by law. If not done, the contracting authorities should be allowed to blacklist that bidder,” he explained.

The Chamber highlighted that direct orders can be a useful tool in public procurement, but it recommended that any directly-awarded public contracts should be justified and published through a contract register, and should be subject to public scrutiny with interested parties given the opportunity to challenge them.

As things stand, interest parties who wish to challenge a direct order can declare a contract ineffective. The major difficulty associated with this is that it does not apply to direct orders below the financial thresholds set by EU Directives, and one can only declare it ineffective within six months from when the public contract is signed.

The Chamber recommended that the monitoring of public contracts should be a burden shared between the public and private sector, with any variations to the tender published in a register.

The register would be designed to show any historic modifications to public contracts, and would act as a record showing all necessary approvals that have been obtained and a summary of the justification for the public contract.

According to the Chamber, such a register would help keep tabs on the status of a public contract, whether any payments were made, whether specific milestones have been reached by the contractor and whether any disputes have been submitted to judicial resolution or arbitration.

The Chamber called for more thorough market research before drafting a tender. They suggested the use of preliminary market consultations to ensure that contracting authorities are aware of the market and the services or products available to them.

During the press conference Dr Mifsud-Bonnici had remarked that at least 60% of members felt that the research done by the contracting authority was inaccurate. In light of this, the Chamber recommends that government utilise a panel of experts across different industries that can be consulted when drafting tenders.

If this is not possible, the Chamber said that the technical expertise ought to be outsourced.

The document has since been presented to Prime Minister Robert Abela and Finance Minister Clyde Caruana. It was further forwarded to the Principal Permanent Secretary, the Department of Contracts, and the Permanent Secretary within the Ministry of Finance.

Xuereb said the Chamber will be meeting with every contracting authority to clarify the proposals put forward in the report.

More in Business