IB 2020/21 Circumventing the Tender Process: Why PNG Should Be Cautious with the Administration of Coronavirus (COVID-19) Funds
Under normal circumstances, the Public Finance Management Act 1995 (PFMA) in Papua New Guinea (PNG) mandates rigorous tendering processes to safeguard the proper use of public monies. To deal with the COVID-19 pandemic, the government’s declared state of emergency (SOE) from 22 March to 16 June 2020 allowed for the suspension of regular tendering processes, and on 12 June the National Pandemic Act 2020 (NPA) was passed.
In the absence of the usual tendering processes during the SOE, Certificates of Inexpediency (COIs) — a provision under PMFA intended to circumvent the tendering process — were used. Additionally, the new NPA provides for the suspension of the PMFA if a pandemic is declared. Both COIs and the NPA bypass the tender processes that were set up to ensure transparency, and aggregate power to fewer individuals. This In Brief presents two cases where the use of a COI was found to be illegal because it did not occur during an SOE. Such examples of the past abuse of COIs can be applied to the provisions under the NPA, as the new legislation sets up similar methods to circumvent regular public procurement procedures.