Ghana loses $2bn in sole-sourced contracts – Danquah Institute - Ghana loses $2bn in sole-sourced contracts – Danquah Institute

Even in the more developed world where corruption is not as rife; money not as scarce a resource; and debt not at the level that it currently is in Ghana, extra precaution is taken to avoid awarding single or sole sourcing contracts unless it is absolutely necessary to do so, due to the lack of options or alternatives. Governments in the more developed world have always taken great care to ensure that no charge of corruption can be levied against either party to a state contract. It is indeed for this very reason that many governments insist on competitive tendering and the removal of any monopolistic tendencies.

Contracts awarded under the NDC government indicates a blatant and total disregard to the plight of Ghanaians and the state of our economy and the insensitivity of the government by its failure to recognise the importance of value for money, the need to protect the public purse and the integrity of the tax system. Majority of the contracts awarded and approved by the Board of Public Procurement Authority in 2016 alone were done on a sole sourcing basis, with the rest being awarded on a restricted tendering basis and the justification for the government’s decision is not apparent. The contention is that the choice of awarding contracts on a sole sourcing basis cannot be justified.

The value of the contracts awarded for various projects during the past 8 years by the NDC government have been excessive to put it mildly without much tangible evidence of what these funds were used for. The question that immediately comes to mind when one sees the figures is why? Why this figure? Why this company? Why couldn’t any other company do the job?

A case in point is the authorisation of the contract for the supply of 3,000 cartons of A.T. pesticide for GH₵15,480,000.00 (fifteen million four hundred and eighty thousand Ghana Cedis) to ABP Ltd by Quality Control Company Limited (Cocobod). This was awarded on a sole sourcing basis. One might ask, were there no other agrochemical and pesticides companies in Ghana that could execute this contract? Why did this not go through a more competitive tendering process to ensure that Ghanaians were getting value for money? Our checks show that this could have been competitively done at GH¢150.00 a carton instead of the GH¢516.00 ABP is being paid through sole sourcing.  This means that our farmers could have received three and a half times more pesticides if the procurement was subjected to competitive tender. 

Again in April 2016 a contract was awarded by Ghana Cocoa Board to the value of GH₵134,000,000 (One Hundred and Thirty Four Million Ghana Cedis), equivalent to US$33 million, for the procurement of 64,000 bales of jute bags. Needless to say, this contract was awarded on a sole sourcing basis. This breaks down into GH¢2,093.75 per bale. On the market, this could have been competitively purchased at GH¢500.00 per bale and the nation could have received four times more in terms of value for money. There is absolutely no justification for this especially where the procurement of jute bags does not require any specialist skill or knowledge once the relevant specifications have been provided.

Another example is the award of five separate contracts totalling GH₵222,305,115.00 (Two Hundred and Twenty Two Million Three Hundred and Five Thousand One Hundred and Fifteen Thousand Ghana Cedis) in March 2016 alone by the Ministry of Power for the supply of LED street lights in Accra and Kumasi, (light emitting diode lamps) , and other lightning accessories. Do we need to bother stating what type of contract this was? You guessed right, sole sourcing! GH₵222,305,115.00 (Two Hundred and Twenty Two Million Three Hundred and Five Thousand One Hundred and Fifteen Thousand Ghana Cedis) on street lights, lambs and other related lighting accessories and we continue to drive and walk in darkness? A look into the details of that contract also shows that others were prepared to supply at a third of the price above.

Indeed at a meeting on the 22nd of June 2016, the Board of Public Procurement Authority noted with concern the use of the single or sole source method for the provision of certain services or supply of certain goods including the LED lights, conductors and accessories for street lightning. Yet, sole sourcing continues to be the order of the day.

The NDC government’s attitude towards procurement only seeks to encourage collusive arrangements and excludes citizen participation and participation by private entities from the procurement process.