The dark side of Petty Contracts

EDITORIAL

Petty contracts have become a rather controversial subject in recent years, and when you realise that over $14 million was spent in 2001 on this type of contracts it becomes apparent that they are anything but "petty". Initially, all contracts exceeding $10,000 were supposed to be examined by a tender committee, but at some point the Executive Council decided to increase the amount to $60,000. In recent years a new pattern has developed whereby "large projects with cost estimated to exceed the petty contract ceiling were divided into several parts in order to circumvent the tendering requirement."

Chief Auditor Sonia Webster in her 2001 Report points out that "no attempt has been made to regularise this practice or to amend the rules as they relate to contracts. The splitting of projects to facilitate petty contracts remain a violation of established government procedures and a threat to the attainment of value for money on government projects."

On the other hand, in 1999 the Ministry of Finance prepared draft guidelines for the administration of petty contracts but these were never advanced for implementation. "In 2001 the Ministry of Finance became involved in execution of projects through petty contracts. Sixty petty contracts totalling $1,783,537.00 were issued by this Ministry for projects which previously would have been administered by the Public Works Department. Many of these displayed circumvention of the public tendering requirement," Mrs. Webster said.  Additionally, instances were seen where the Ministry of Finance after dividing a project, issued all petty contracts to the same contractor, and according to the Chief Auditor, this trend escalated in 2002.
Some of Mrs. Webster's findings are rather disquieting, take for example the fact that much of the work performed through petty contracts was managed in a piecemeal fashion, and no comprehensive project files are maintained for the works performed. Furthermore, there appeared not to be any assessment of the project as a whole, only of the small sections that each petty contract represented.

And what would be our reaction when we are told that some contractors did not have trade licences, some were awarded contracts for works which were not covered by their trade licence, and many of the petty contracts were issued in the contractor's name rather than the name of the company to which the trade licence was issued?

Originally the petty contract system was adopted to secure accountability and economy on small projects. Unfortunately, it is now being used on large projects without adequate regulations and proper monitoring. Indeed this situation has opened the door to a number of ills and more strict regulations must be put in place to prevent a whole series of abuses. It is a very sad story that raises an endless number of questions and it would help if a thorough investigation would be conducted on the matter.