Making foreigners rich at our expense - JMA head blasts government procurement officers for buying overseas what they can source locally
Ahead of the 2016 staging of the region's most high-profile export show, Expo Jamaica, members of the local manufacturing sector have expressed displeasure at what they claim is the 'foreign-mind' approach of public-sector procurement personnel who buy products from overseas which they could get locally.
President of the Jamaica Manufacturers' Association (JMA), Metry Seaga, used a Gleaner Editors' Forum last week to charge that the focus of government procurement officers on overseas products rather than high-quality local ones is enriching foreigners at the expense of the Jamaica's manufacturers.
With the Government being the largest purchaser of goods and services, Seaga suggested that local entities would get a boost if state agencies started buying more products made in Jamaica.
"Let me be clear. I am not suggesting that we buy something in Jamaica for $100 when we can buy it in China for $1," said Seaga.
"All too often, you pay for what you get and attention must be paid to when prices are close. If I were a (Cabinet) minister in Jamaica, there is not one thing could be in my ministry unless it was bought in Jamaica, unless there is a good reason why it wasn't ... sometimes that is what smaller companies need," added Seaga.
He said this expo provides an opportunity for the change to begin.
"I am hoping that we will see a lot of the government procurement officers coming to expo with an eye to say what is that I am buying with taxpayers' money from overseas that I could buy locally," said Seaga.
"I am also hoping that this expo will be unique in that respect - that we have the thousands of procurement officers who are spending our taxpayers' dollars overseas."
He argued that by buying so many products overseas the procurement officers of state agencies were making other countries rich by putting money in the pockets of foreigners.
"I hope they will come out to the expo and give their support by buying locally," he said.
Seaga scoffed at the Government's policy where 15 per cent of public sector contracts are to be set aside of for local small- and medium-sized enterprises (SMEs) under the public procurement law.
"It doesn't work," declared Seaga as he complained that aspects of the Government's procurement policy relevant to local manufacturers are not functional.
"There is a line in the procurement that states that if you are a local company you get preferential treatment in your costing. (But) in my 30 years of business, I have never seen a procurement document that doesn't have the words 'local bid preference' not being applicable," asserted Seaga.
"They may have the policy but they also have the ability to write it out," he added. Seaga said that the upcoming expo is critical because it will serve as a vehicle to allow local companies to build and grow.
The JMA head noted that several different sectors are to be featured at the expo, which starts on Thursday at the National Indoor Sports Centre and the National Arena.
According to Seaga, by assisting small companies to grow to medium size, and medium-sized companies to grow large, "you help to build their capacity and you help to build their prices down".
Asked what is being contemplated to ensure that government procurement officers are present and engaged in the expo, Seaga said a "sit down" with these state actors is being organised.
"We are planning a day or a week when we put the manufacturing community and procurement officers together with JAMPRO and the industry ministry on a more direct basis," said Seaga.
He expressed hope that getting procurement personnel in the local manufacturing space could change mindsets from import to local.
"That import substitution is where we could save a lot of money," said Seaga.
UTech to house Caribbean Regional Procurement Centre
After a rigorous and competitive process, the University of Technology, Jamaica (UTech) has been selected to house a Caribbean Regional Procurement Centre, which aims to improve procurement practices across the Caribbean.
The centre, which was announced last year by the Caribbean Development Bank and the World Bank, is expected to be operational by late this year.
It will provide high-quality training services, accredited by the Chartered Institute of Procurement and Supply (CIPS), initially focusing on training for public procurement professionals in the Caribbean.
Public procurement is the process that governments go through to purchase work, supplies or services from companies.
A significant portion of a country's financial resources can be devoted to government procurement agreements, with a 2011 Asian Development Bank report noting that 15 to 22 per cent of a country's gross domestic product can pass through its public procurement system.
An efficient public procurement system can stimulate private sector growth, sustainable development, and allow for transparency and accountability, where citizens can monitor how their tax revenues are used. However, on the opposite side, a poor system can result in inefficiencies, corruption, and the loss of billions of dollars.
With many Caribbean countries facing weak growth and substantive debt after the recent global economic downturn, public procurement offers an opportunity to more effectively deploy scarce public funds and to stimulate sustainable investment.
As the selected entity, UTech will host and run the regional Procurement Centre on a sustainable basis.
It will develop a curriculum and training materials jointly with BIP Solutions Limited, a consultancy firm specialising in procurement, and CIPS, one of the global leaders in providing procurement learning solutions and qualifications.