Financial Analyst Joel Bhagwandin, representing his financial firm, SphereX Professional Services, has put forth a series of compelling recommendations on possible amendments to the 2021 Local Content Act.
Bhagwandin’s proposals stem from concerns regarding transparency and fairness within the procurement process which he expressed in a letter to the Minister of Natural Resources, Vickram Bharrat. In his letter he said, “..our firm participated in the procurement process for the provision of data analysis service but was unsuccessful. Having been involved in the procurement process, we are of the respectful view that the procurement process of EEPGL is not fully transparent in the manner that the Local Content Act contemplated.”
Expressing disappointment in the lack of transparency surrounding the procurement process conducted by EEPGL (ExxonMobil Exploration and Production Guyana Limited), Bhagwandin emphasized the need for a more equitable and transparent system that upholds the fundamental principles enshrined in the Act. He drew attention to the Act’s requirement for a “fair and transparent” process throughout the procurement of goods and services, pointing out the apparent divergence from these principles in the current practices of EEPGL.
One significant issue raised by Bhagwandin was the lack of engagement and feedback provided to unsuccessful bidders, despite assurances from EEPGL. He argued that comprehensive and constructive feedback is essential for unsuccessful bidders to understand the areas in which they fell short.
He then called for greater transparency in the post-contract award stage, advocating for the disclosure of essential information to all participating bidders. This information includes the number and names of firms involved, the ownership structure of those firms, the awarded contract details, and the quoted prices of all shortlisted firms. By providing such information, he believes the procurement process would align more closely with the national procurement procedure and fulfill the spirit of the Local Content Act.
Bhagwandin also highlighted concerns about the prevailing practices that disadvantage 100% small and medium-sized Guyanese-owned firms in favor of larger local firms engaged in joint ventures with foreign entities. He emphasized the importance of prioritizing capable and qualified Guyanese firms in accordance with the objectives set out in the Local Content Act. Moreover, he expressed his firm belief that such practices contravene the spirit of the Act, which aims to foster local participation and development.
Further, raising questions about the distribution of local content spending, Bhagwandin pointed to the current composition of companies registered with the Local Content Secretariat. He suggested that a disproportionate share of local content spending is being directed towards joint ventures with foreign ownership, while the majority of 100% Guyanese-owned firms receive a significantly smaller portion. As such, he called for a comprehensive analysis and reporting system that accurately reflects the percentage and value of contracts awarded to 100% Guyanese-owned firms compared to others.
In light of these concerns, Bhagwandin put forward several key recommendations to amend the Local Content Act. These include mandating contractors, subcontractors, and licensees to provide detailed information to suppliers as part of a transparent procurement process. He also advocated for the development of regulations that support the administration of the Act, the adoption of a prescriptive Bid Evaluation Guideline prioritizing 100% Guyanese-owned firms with the required capabilities, and the provision of detailed procurement reports to the Local Content Secretariat.
Bhagwandin also called for regular reports from the Local Content Secretariat, providing analysis on the percentage and value of contracts and local content spending awarded to 100% Guyanese-owned firms relative to others.