‘chop, chop’ in multiple deals: 452 sole-sourcing contracts awarded in 2014

Nation-wrecking act of overpricing by Smarttys Management and Productions Limited; and Ministry of Transport in the bus re-branding saga is said to be giving credence that Ghanaian taxpayers are losing millions of Ghana cedis in contracts awarded to cronies through sole-sourcing.
The infamous and scandalous GH¢3.6 million branding contract for 116 Metro Mass Transit (MMT) buses was awarded through sole-sourcing to Smarttys owned by Selassie Ibrahim, an activist of the ruling National Democratic Congress (NDC) and wife of the governing party’s guru, Ibrahim Adam.
Details have now emerged that about 500 contracts in the mode of Smarttys were awarded to companies and individuals hand-picked by Ministries, Departments and Government Agencies in just one year.
The 2014 annual report of the Public Procurement Authority (PPA) has revealed that 452 contracts were awarded through sole-sourcing between February 2014 and May 2015.
By extrapolation, over 3,000 contracts would have been awarded through sole-sourcing in the last seven years under the governing NDC.
It is only an anti-graft investigation into such contracts like the Smarttys’ deal that will uncover the gargantuan amount poor taxpayers are losing through unbridled sole-sourcing under the Mahama administration.
Among the procurement entities that engaged in sole-sourcing were the Public Procurement Authority; Metropolitan, Municipal and District Assemblies (MMDAs); Controller & Accountant General’s Department, Ghana Airports Company Limited; Ministries of Education, Health, Defence, Local Government & Rural Development as Ghana Cocoa Board.
Dr. Stephen Opuni’s Cocoa Board leads the pack with over 27 sole-sourcing contracts within the period under review.
Lack of competitive bidding for such deals, according to anti-graft crusaders like Critical Thinkers International, has the high potential of increasing cost of contracts as well as breeding bribery and corruption.

Public Procurement Authority
The PPA was established by the Public Procurement Act, 2003 (Act 663) as a body corporate, charged with the responsibility to harmonise the process of procurement in the public service to secure judicious, economic and efficient use of public funds, and to ensure that public procurement is carried out in a fair, transparent and non-discriminatory manner.
Single-source procurement
Section 40 (1) of the Public Procurement Act states in part that “A procurement entity may engage in single-source procurement under section 41 with the approval of the Board,
(a) where goods, works or services are only available from a particular supplier or contractor, or if a particular supplier or contractor has exclusive rights in respect of the goods, works or services, and no reasonable alternative or substitute exists;
(b) where there is an urgent need for the goods, works or services and engaging in tender proceedings or any other method of procurement is impractical due to unforeseeable circumstances giving rise to the urgency which is not the result of dilatory conduct on the part of the procurement entity;
(c) where owing to a catastrophic event, there is an urgent need for the goods, works or technical services, making it impractical to use other methods of procurement because of the time involved in using those methods;
(d) where a procurement entity which has procured goods, equipment, technology or services from a supplier or contractor, determines that
(i) additional supplies need to be procured from that supplier or contractor because of standardisation;
(ii) there is a need for compatibility with existing goods, equipment, technology or services, taking into account the effectiveness of the original procurement in meeting the needs of the procurement.
The Mahama administration is said to be abusing this window of opportunity under the Public Procurement Act.
The contract awarded to Smarttys Management and Productions Limited was initially said to have been inflated by a whooping GH¢1.9 million and the company was expected to refund same to the state.
However, the money was reduced by over GH¢400,000 after the amount was reportedly reviewed by government.
Attorney-General Marrietta Brew Oppong, had confirmed that the total amount to be refunded by the Smarttys had been reviewed from the initial GH¢1.9 million to GH¢1,548,608.04.

Branded bus
According to a statement released by the Flagstaff house, the review was because of the revised Value Added Tax position, revised Withholding Tax position and a set-off of GH¢27,173.74 being over deduction of withholding tax on the original payment.
Consequently, Smarttys was said to have reached an agreement with the Attorney-General to pay the full amount by the end of March this year.
Government’s decision to spend GH¢3.6 million of Ghana’s oil revenue on re-branding the 116 Metro Mass buses was widely criticized by many Ghanaians.
The scandal compelled the Transport Minister, Dzifa Attivor to resign after a massive public uproar. Following mounting pressure on the Mahama administration by the Minority New Patriotic Party (NPP) in Parliament and some anti-corruption groups to probe the use of poor taxpayers’ money to brand the buses at such a ridiculous cost, it was disclosed that the contract was inflated by over GH¢1.5 million.
Chief of Staff Julius Debrah subsequently directed the Attorney-General to investigate the matter after which Smarttys was ordered to refund the excess payments made.

Source: THE Custodian

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