 Current procurement framework and CTC’s role in the procurement process  Why the current framework is inadequate and a summary of change initiatives underway  Areas of concern arising from CTC’s oversight process

How do we define public procurement ? “ Procurement is the whole process of acquisition from third parties and in-house providers and covers goods, services and works. The process spans the whole lifecycle from initial concept and definition of business need to the effective management or markets, through to the end of the useful life of an asset or end of service contract.” Source: National Procurement Strategy for Local Government Crown Copyright 2003

Cabinet Chief Officers Financial Secretary Governor Public Sector Investment Committee Minister of Finance Central Tenders Committee Commission for Standards in Public Life Departmental Tenders Committees (Evaluation) Direct Executive Advisory Oversight

o Public Sector Investment Committee (PSIC) o Chief Officers and DTC’s o CTC o Commission for Standards in Public Life

Chairman Nick Freeland Deputy Chairman Lee Ramoon Wanda Ebanks Edward Howard Jerry Wood Richard Harris John Thompson Secretary Shanna Saunders-Best Former, Senior Partner PWC Manager, Operations & Infrastructure, HSA Business Owner, Private Sector Acting Managing Director, NRA Partner, Maples & Calder Director, Revenue Unit,

Oversee the public tendering for goods and services by the Cayman Islands Public Sector to ensure impartiality, transparency and value for money Ensure compliance with statutory and regulatory requirements as well as applicable CTC guidance notes Overriding requirement – Value for Money and that price and quality is no greater than overseas procurement

Open Tendering- “Prescribed Tendering Process” must be followed for all contract values over $50k Restricted Tendering - “pre-qualification” tender process permitted for contracts with a value over $250k. Requires approval of CTC to commence the process Sole Source Supplier - only one supplier can provide the supplies, services or assets

o Reports of Auditor General, Commission for Standards in Public Life and Keith Luck all talked about inadequacies and recommended changes o Feedback from Chief Officers and others involved in the procurement process

2 Parallel initiatives: o CTC advancement of its own policies, procedures and guidance documentation; and o Work of the Sub-committee of the Procurement Working Group

TABLE OF CONTENTS Governance framework 1.1Central tenders committee terms of reference 1.2Extract from the Financial Regulations (2010 Revision) 1.3Appointment of members of the Central Tenders Committee 1.4Register of interest and resolving conflicts of interest 1.5Confidentiality 2.Policies and procedures 2.1Selecting the appropriate tender methodology 2.2Open tender process 2.3Restricted tenders 2.4Competitive dialogue tenders 2.5Single source supplier 2.6Disposal of assets 2.7Bid opening outside of scheduled meetings 3.Guidance documents 3.01 Principles governing public procurement 3.02Conforming to legal requirements 3.03Use of alternative procurement methods 3.04Use of the single source procurement method 4.Exposure drafts 4.01 Developing the business case and procurement plan 4.02 Competitive dialogue procedures (alternative procurement method) 4.03Post implementation reviews 4.04Application of weighting methodologies 5.Glossary

Accountability Competitive Supply: procurement should be carried out by competition unless there are convincing reasons to the contrary Consistency Effectiveness Value for Money: the procurement processes should be carried out to achieve the most advantageous combination of cost, quality and sustainability over the life cycle of the project Fair-dealing 12 Principles Integration Integrity Informed decision-making Legality Responsiveness Transparency

One of the core Policy Principles is : “ Putting value for money considerations at the heart of the decision making process” One of the core Policy Principles is : “ Putting value for money considerations at the heart of the decision making process” FFR identifies 5 key stages in the planning, development and execution of a project: FFR identifies 5 key stages in the planning, development and execution of a project: Appraisal and business case Appraisal and business case Procurement Procurement Contract Management Contract Management Delivery Delivery Evaluation Evaluation

1.Circumvention of CTC oversight by keeping tender thresholds below $250k 2.Business cases that are non-existent, poorly prepared or inconclusive 2.Business cases, that are non-existent, poorly prepared or inconclusive 3.Inadequate funding of projects. Projects are started without securing all budgetary funding to complete the project in a single period. 4.Absence of policy direction at the Cabinet and Ministry levels