I don’t know which issue is more topical than the other; COCOBOD CEO approving dangerous chemicals for use on cocoa farm which will in the long run cause damage to cocoa trees, or the 1 in 11 contracts that made its way into Rams Kitchen, or the uniBank takeover of ADB before the subsequent takeover of uniBank? Which one?
The CEO of the National Lottery Authority (NLA) has been accused of awarding contracts to his sister-in-law, raising questions of conflict of interest. According to reports, the CEO, Kofi Osei Ameyaw, late last year awarded 11 contracts, on the same day, for the same purpose, to the same company, which happened to be Rams Kitchen, a company owned by his sister-in-law.
I’m not a lawyer, but my understanding of conflict of interest is not necessarily when someone is a relation to the giver of the contract, or if the parties involved have direct link to themselves, but questions of conflict of interest will arise if the processes leading to the decision of the contracts are not separated from the beneficiaries of the contract, directly or indirectly, or when the beneficiaries of the contract are linked to the decision on who gets the said contract.
I am a member of the Board of an organization based in America. That organization recently won a grant of $25million to be awarded to NGOs around the world. The work that money seeks to do is exactly in line with what Challenging Heights does in Ghana. The board of the organization is the body that takes decisions on who gets to be awarded what part of the money. The fact that I am a member of the awarding board does not necessarily prevent me from bidding for a portion of that money.
How I am able to avoid a conflict of interest situation, in my above situation, is explained in my position with my role on Family for Every Child Board. I am the Chairman of the Board of Family for Every Child, a global organization based in London. The board meets four times in a year. At the beginning of each meeting, I, as the chair, will have to ask each member to declare any potential conflict of interest he/she is aware of.
At the beginning of each year the UK Charity Commission requires each of the Board Members to declare any related party interest to the organization. This involves filling out forms that disclose any other organization or company that you as a Board Member is related to. This is to ensure that if there are any contracts that any of your related companies have interest in, you as a member of the board shall not participate in any aspect of the decision making processes.
So you see, you could be my son, you could be my wife, you could be my brother, but the institution I lead could still be able to award a contract to you, directly, without such a transaction necessarily becoming a subject of conflict of interest, depending on, whether or not, during the decision-making processes, I had exercised utmost good faith, in addition to a full disclosure of that potential conflict, and whether, during the decision-making process, I had excluded myself from the processes, without pulling strings behind the scenes.
In the same vein, I could award a contract to someone who has no relation with me, and yet that contract rather constitute a conflict of interest. For instance if I have my own private company that supplies cement to a particular contractor who is bidding for a construction contract from a public institution that I am the head, although I have no relations with the bidding company, the fact that I am privately a supplier to the bidding entity, I have a conflict of interest situation in my hand, as well as a conflict of loyalty, and this I will have to disclose, upfront, before the decision making processes begin, and I will have to exclude myself from the processes of arriving at the decision.
So does Ram’s Kitchen’s 11 contracts constitute a conflict of interest? I don’t know. The woman is related to Kofi Osei Ameyaw, who is the CEO of NLA, so there was definitely a POTENTIAL conflict of interest upfront. In this case, much is dependent on the circumstances leading to the award of that contract.
My reading in the ensuing case is that the threshold for the NLA CEO’s sole approval of any contract is GHC100,000. The total contract sum that was on the table was GHC500,000 to be used for a single purpose procurement – purchase of gift food items. Which meant that the contract should have been opened for public competitive bidding.
I am told there were two other companies that bid for the contract, and that while Rams Kitchen quoted GHC583,000 for the contract, the two others quoted GHC613,000 and GHC619,000 respectively. Knowing what Ghana has become, of our penchant to find smart ways of stealing from ourselves, and the nearness of the amounts quoted, I am tempted to think that all the three companies that presented the bidding were either directly or indirectly related, and that the whole process of arriving at the three quotations are an arranged charade.
The Public Procurement Act (2003), Act 663, section 21(6) states “A procurement entity shall not divide a procurement order into parts or lower the value of a procurement order to avoid the application of the procedures for public procurement under this Act”.
Let us assume, that, all the three companies presented quotations independently. What was the reason for splitting that one single procurement activity into 11 contracts, for the same dates for the same one person? Rama Kitchen’s contract totals 11, with some of the contracts amounting to GHC99,470. Obviously the fragmentation of the contract was done to evade the involvement of a tender committee, so that the CEO could award the contract alone, not so?
The Procurement Act prescribes some basic pre-qualifications for all companies interested in participating in public procurement processes. The company should have been registered, with the Registrar General’s Department, the company should have been registered with SSNIT, it should have obtained a Tax Clearance Certificate, as well as having an evidence of a capacity to undertake the task being advertised.
Did Rams Kitchen meet all of the above requirements? Has Rams Kitchen been operating in Ghana long enough to have had the track record of showing evidence of its capacity to execute a contract of such amount, for it to have been able to obtain a tax clearance certificate based on the discharge of its tax obligations? If so, how did it happen, as my information goes, that Rams Kitchen collapsed three months after the ensuing contract was executed?
I have heard several arguments to the effect that the award of the contract to Rams Kitchen saved us money. I am not sure what that means, that, we should be able to break the law if there is a contractor who is offering us a lower price for a particular contract; that, systems, quality considerations, rule of law, should no longer matter to us? We should just look at the face value of what a contractor is giving us, and without any sense of order, give out the contract?
That is exactly the point, of building governance systems, and ensuring that there are rules of engagement, that holds society together. Part of these governance systems is the procurement processes put in place to forestall corrupt practices. It does not behold on you to try to help the system, if the system cannot help itself. If the systems are not working, you fix them, or you change the rules, you don’t break them.
Yes, we need to work towards saving money, in all we do. But saving us money does not have to take precedence over fair processes. It does not have to repudiate the very rules we have set for ourselves, and open ourselves up for vulnerability.
Clearly, the NLA deliberately fragmented the GHC500,000 into 11 contracts in order to violate the provisions of the law, for there is no reason, in this world, that will make it possible for any individual or company, to secure 1,2,3,4 up to 11 contracts, for the procurement of the same goods, the same date, with the same entity, and still believe that there is nothing wrong with such a transaction.
You cannot change the name of this transaction by spinning our emotions. What do you take us for? Unintelligent? That you de-feather the bird, and present it to your father to tell its name? My sister, the transaction is shameful, it is devilish, and it must be condemned. No amount of spinning, no amount of padding, must rid such a rot of its shame.