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BoG defends using sole sourcing to purchase $504,000 gold watches for workers

BoG defends using sole sourcing to purchase $504,000 gold watches for workers
Source: Ghana | | Austin Brakopowers | Email:
Date: 05-10-2016 Time: 06:10:36:pm
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Ghana’s Central Bank says it has done no wrong in seeking to use sole sourcing in the purchase of gold watches for its staff as an end of year benefit.

Communications Director of the Bank, Bernard Otabil says the bank was duly authorized by the Public Procurement Authority (PPA) to use the system in the purchase of the watches estimated at $504,000.

Speaking to Evans Mensah, host of Joy FM’s Top Story programme Wednesday, he said, “You cannot on your own say you are going to use sole sourcing. That is why the PPA has been established and if they agree to your reason then you can go on.”

He says the bank resorted to sole sourcing because it does not want a repeat of a disappointment it faced in 2010 when the supplier that won the bid to supply the items failed to deliver them on time.

Related Article: Sole-sourcing killing local companies; Minority MPs move for a review

“If you are going to use sole sourcing you have to look at the quality of the thing you are in need of, look at the capacity and the value for money before making that recommendation to the board [PPA],” he said.

The Bank of Ghana (BoG) was reported by the New Statesman newspaper of seeking approval of the PPA to single source the procurement of ladies and gents gold watches valued at EUR 450,000 to Messrs ‘A’ Swiss Watch Company Limited.

A document chanced on by the newspaper dated July 22 says the bank wants to buy an 18 karat of ladies gold watches that is 25 units and 18 karat of gents gold watches which is 48 units.

The BoG document detailing the decision to use single sourcing

“BoG intends to use its 2016 budgetary allocation to fund the procurement activity,” the document read.

The Bank explained the reason for spending half a million dollars on 72 pieces of watches was to “award deserving members of staff who had served with the Bank for 30 years or more and are due to retire compulsorily from the service of the Bank in the years 2016 and 2017.”

Checks by on an online watch market, revealed a Chronograph Leather Strap gold watch could range from $1,595 to $10,000 depending on one’s preferences.

Related Article: Sole sourcing is an exception; it cannot be elevated to become the norm – Expert

The use of single sourcing in the award of government contracts has been blamed for the collapse of many local firms.

Minority leader Osei Kyei Mensah-Bonsu had lamented on the floor of Parliament in February that since the Act came into force, close to about 80 percent of government contracts have been awarded under the system. He said the repeated use of single-sourcing has restricted the competitive space making it impossible for small firms to compete with big firms.

Former Chief Executive Officer of the PPA, Agyenim Boateng Adjei had told Kojo Yankson, host of Joy FM's Super Morning Show on February 17 that the use of sole-sourcing in public procurement cannot be made the norm in place of competitive tendering process, a default position of the law.

The Public Procurement Act, 2003 (Act 663) has clarified circumstances under which sole-sourcing or single-sourcing should be permissible.

Section 40 (1) of the Act reads: "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 entity;

(iii) the limited size of the proposed procurement in relation to the original procurement provides justification;

(iv) where the procurement entity seeks to enter into a contract with the supplier or contractor for research, experiment, study or development, except where the contract includes the production of goods in quantities to establish commercial viability or recover research and development costs; or

(v) Where the procurement entity applies this Act for procurement that concerns national security and determines that single-source procurement is the most appropriate method of procurement."

Although the Central Bank's decision to use sole sourcing in the circumstance explained by its Communications Director flies in the face of the law, it says it had the full backing of the body vested with the power to sanction such a system.

"No procurement rules were breached in presenting sole sourcing justification to the Public Procurement Authority (PPA) for approval," a statement released by the bank read.

On the decision to spend half a million to reward workers, Mr Otabil said their package system is not different from the one’s implemented in other firms in the country.

“We shouldn’t devalue the importance of service,” he said, adding this will help boost the morale of workers and to show appreciation of the bank.

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