Davis, KPMG defend BEC non-disclosure agreement

Wed, Aug 20th 2014, 11:33 AM

In the wake of criticism from the private sector, Deputy Prime Minister Philip Brave Davis has defended the use of a non-disclosure agreement in the Bahamas Electricity Corporation (BEC) reform process, suggesting that without it, the government would be in a weaker negotiating position.
"Each party is attempting to get the best deal they can for their side." said Davis. "It's not good negotiating practice to weaken your hand at the negotiating table. You could weaken your hand by exposing things that the other side could exploit to get a better deal for themselves."
However, Chairman of the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) Robert Myers has stated that the chamber is opposed on principle to non-disclosure agreements (NDAs) in relation to government contracts and deliberations for anything other than matters related to "national security".
His concerns have arisen in particular with respect to the NDA governing bidders involved in the delayed BEC reform process, which has limited the amount of information that has been made available to the public about who is bidding, what they are offering, where government deliberations stand and other key information. Myers said the level of secrecy that has shrouded the process is not in the public's best interest, particularly when it involves such a critical entity as BEC.
"If we can't talk about things openly then clearly there is something wrong, unless it's an issue of national security, and I can think of very few of those," Myers told Guardian Business in July.
In an interview on Tuesday, Davis first stated that NDAs are intended to protect "intellectual property rights and systems of business" that may be made known by parties involved in a negotiation.
Davis said while a company could come forward and state that it is part of the process, it should not discuss the "inner workings of the process".
Bidders in the BEC reform process contacted by Guardian Business in the past have declined to comment, stating that they are under an NDA. The government has never formally announced which companies are bidding in the request for proposal (RFP) process, which began last year, with this information only forthcoming as a result of investigations by the media.
While some have suggested that the lack of transparency engendered by the establishment of the NDA could encourage the striking of deals that are not in the public's best interest, Davis suggested that this is a perception the government cannot help.
"First of all, I don't like to speak to the vagaries of the human mind. Anything is possible and those who are with you and those who are against you and those who just don't have any interest or are indifferent to you, they all have their opinion as to what is happening, even when you are transparent.
"They read into something. At the end of the day, one of the problems we have is that people judge others as they judge themselves, and if you see a boogie man all the time, maybe you should look in the mirror and see whether you are not seeing yourself," he added.
A source close to the BEC bidders said the NDA required that those involved could not discuss the RFP process or anything arising out of it with anyone other than their own team members, financial advisers and consultants.
"While they may defend it by saying 'we are giving you a lot of confidential corporation information that can't get out there', specific data related to generators, litigation, problems, I think not being able to talk about the process is problematic.
"(The bidders) have seen NDAs which talk about confidentiality with respect to data before, but not a prohibition on talking about the process. That's problematic. The public has got a right to know."
Simon Townend, head of advisory with KPMG (Bahamas), who has been advising the government throughout the RFP process for BEC, said that NDAs are "standard in virtually all transactions".
"The primary purpose is to protect the confidential non-public business information and intellectual property of a company, in this case BEC. It also protects against bidders freely going and talking to company personnel or suppliers, at least until a certain stage in the process when an agreement is reached, as this can be disruptive to operations, business relationships and the process itself.
"In a public competitive bidding process, it is also not appropriate for a bidder to be making public statements or publicly/privately lobbying, and the NDA is intended to protect against this," Townend added.
Meanwhile, Davis rebutted suggestions from the BCCEC that the government should seek to engage the private sector more closely in decisions on major contracts, such as in the BEC overhaul. Myers had charged that the government could improve the public procurement system for the benefit of all by including appropriately qualified private sector individuals on selection committees charged with determining who gets contracts.
He said that the government "has involved the private sector" in the BEC contract process, in the form of KPMG, and does not see the need to involve others.
Myers made his comments in the wake of the release of the U.S. Department of State's Investment Climate report, which criticized the government's public procurement process, alleging that some companies had complained to the U.S. Embassy about "undue government interference" in the process.

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