By DANIEL FERGUSON

The Procurement Planning and Logistics course at the University of The Bahamas, which I facilitate, is coming to an end soon and we are in the final stages of one of the modules, purchasing and supply management. One of the more interesting subjects we examined in this module was centralized purchasing versus decentralized purchasing. According to Michiel R. Leenders and Harold E. Fearon in their book, ‘Purchasing and Supply Management’, centralized purchasing holds great advantages over the latter. They further list seven advantages, which I have summarized as follows:

1. 1 It is easier to standardize the items bought if purchasing decisions go through one central control point.

2. 2. It cuts down on administrative duplication. Purchasing can enter into an annual contract based on the organization’s total requirements for the entire year.

3. 3. By combining requirements from several different departments, purchasing can place orders large enough to get price reductions.

4. 4. One department, facing a materials shortage, does not have to compete with another department for the available supply as this can drive up the price.

5. 5. Central purchasing should be administratively efficient for suppliers.

6. 6. It provides better control over purchase commitments as a central point is needed to monitor the aggregate commitment amount at any specific point in time.

7. 7. It enables the development of specialization and expertise in purchasing decisions, and is a better use of time.

As you may well know, the Public Procurement Department in The Bahamas has a Central Purchasing Unit, all under the supervision of the Ministry of Finance whose sole responsibility is to procure cleaning, food and office supplies for all of government ministries, agencies and departments.

The Public Procurement Act 2023, in section 8(1) (a) and (b), (2) (a) and (b), states:

a. (a) The Department shall, pursuant to its functions under section seven, organize the central procurement of commonly used goods on behalf of all procuring entities, and in so doing shall prepare and dispatch a consultation document to each procuring entity with a view to identifying the annual aggregated requirements for the centralisation of procurement: and

b. (b) request each procuring entity to provide an indication of the goods, works or services that are required by way of centralised procurement.

2. (2) The Department shall, in determining whether the aggregation of demand is appropriate, take into consideration —

a. (a) which goods are commonly used goods and likely to attract the same potential bidders.

b. (b) when the goods, works or services will be ready for bidding;

On May 8, 2025, an article to the editor of the Nassau Guardian from a writer under the pseudonym ‘The Purchaser’ wrote: “Unfortunately, today there is a lack of proper organizational structure in the Central Purchasing Unit, which allows for unconventional reporting systems, major supplies stock-outs, particularly on essential goods, and a shortage of trained staff in public procurement processes.”

The 15 students on my course were given an assignment, which was to conduct a survey to assess the viability and efficiency of the Central Purchasing Unit (CPU), evaluate its performance in supplying cleaning, office and food supplies, and gather feedback from key government agencies. The survey was to concentrate on the period from July 1, 2025, to August 18, 2025, and it was to be conducted by telephone and.or e-mail. The students were divided into two groups and surveyed ten government agencies, with at least three being essential services.

The questionnaire for this survey consisted of the following questions:

What are the fill rate percentages of the requisitions of the department you have selected, and what products were they?

Are the products of good quality?

Did they receive the right products, the amounts and sizes when requested?

What essential items have been out of stock that can cause a major impact on the agency’s operations and how often?

How is CPU’s delivery service?

How is CPU’s customer service?

Do you agree that the procurement of supplies for the essential services should be decentralised?

The results of the survey are as follows:

All ten respondents stated that the Central Purchasing Unit’s fill rate for stationary supplies was 20 percent. Stock outs, or running out of inventory for these supplies, such as copy paper, pens, log books and a large amount of other items from the inventoried catalogue, are being experienced.

Seven out of ten respondents rated the lowest fill rate of cleaning supplies at 20 percent and the highest at 49 percent. Constant stock outs of essential items such as toilet tissue, garbage bags, bleach and hand towels occur. One agency’s public bathroom facility, known to be used by tourists, was allegedly reusing garbage bags while other agencies resorted to buying the items themselves or had to make other arrangements. This became more evident as reported in The Tribune on Monday, August 25, 2025, where “Arawak Cay vendors say conditions at Fish Fry are driving tourists away”. It further stated: “Operators also highlighted poor restroom facilities, describing them as often unsanitary, out of order or without basic supplies. People have to share dirty hand sanitizer, no tissue when it’s barely working.”

The three respondents for food supplies all were essential services agencies and their responses were mixed.

One respondent stated that the fill rate for food was extremely poor. The products were of such poor quality, prior to the date this survey was initiated, and that it actually impacted their organization’s ability to undertake its operational mandate. This resulted in the Ministry of Finance agreeing to provide them with Standing Purchase Orders for the various vendors, and the agency now manages its own procurement of food so as to be delivered directly to them.

The second Respondent gave CPU an 80 percent fill rate. However, they sated that the food quality was poor and that their requisitions were being modified by CPU, who would send them food supplies that they did not request. This is highly irregular for a buyer to purchase supplies for an organization, approve its requisition from the warehouse inventory, and then change the requisition without the permission of the requester. Best procurement practices dictate that there should be a separation of duties for each step. If the separation does not exist, it potentially allows a buyer and a vendor to collude together for the purchase of outdated, slow moving or expired supplies to be procured. Then agency requisitions can be changed to accommodate these outdated, slow moving and expired supplies for a financial kickback.

The third Respondent advised that their food requisition fill rate was 80 percent.

With regards to the delivery service of the Central Purchasing Unit, eight out of ten respondents stated that the service is excellent. Two respondents did not participate because they do not use the delivery service.

All ten respondents agreed that customer service at the Central Purchasing Unit needs to be improved. Nine out of ten respondents suggested that decentralised purchasing was in their best interest.

After receiving feedback from the respondents and observations made, the students noted that there is a litany of issues that are negatively impacting the Central Procurement Unit’s operations. These are simultaneously impacting operations at various ministries, agencies and departments, in particular those that provide services to the general public. These issues are the lack of an organizational structure, inexperienced staff, limited training, lack of job descriptions, lack of leadership, alleged constant micro management by the Ministry of Finance, no planning, no demand forecasting, poor customer service, and constant stock outs of essential items.

The students recommended the appointment of a qualified and knowledgeable chief procurement officer with extensive experience in procurement and strong managerial skills to run the Central Purchasing Unit. This individual should be able to ensure that inventory par levels are set, forecast a year’s inventory for each product and enter into a year’s framework agreement with suppliers. This would minimize the level of stock outs that presently exist. The practice of engaging in three-month contractual arrangements, which are presently being offered by the CPU, is counter-productive. Along with these overwhelming issues, there are hardly any savings that the present central purchasing model can realise.

According to the 2025 second quarter CIPS (Chartered Institute of Procurement & Supply) pulse survey, sharp price increases across shipping, fuel and food, and the risk of shortages, are being driven by US tariff uncertainty, growing trade tensions between the US and China, and ongoing instability in the Middle East. Therefore, companies and organisations are using strategies such as continuing supplier diversification, extending contracts, holding more stock and insourcing.

There was also the recommendation that, along with long-term framework agreements, the CPU should consider direct deliveries to the institutions from its vendors who have the financial means and the capacity to house essential items such as food in the case of the hybrid system used by one essential services agency. The Ministry of Finance should provide those other essential services agencies with standing purchase orders for the various vendors, and the agency could manage their procurement of food and other products to be delivered directly to them.

An organizational chart clearly defining proper reporting lines and job descriptions should be implemented urgently, along with the introduction of an operations manual. A product evaluation committee should be established with stakeholders as members to ensure that products purchased are of the highest quality.

Inventory management clerks, buyers and customer service clerks need more training to better understand the needs of their customers, who should not be treated with disdain. It is hoped that this survey’s findings and recommendations will be considered by the Ministry of Finance to bring about some positive change.

A well-known agricultural advocate, speaking on Love 97’s Issues of the Day on September 12, 2025, said: “Agriculture as an entity with agriculture in its name it does not have an agriculturist on its staff.” It is fair for us to say the same about the Public Procurement Department in the Bahamas. The truth is maybe an offence, but it is not a sin.

NB: Daniel Ferguson, FCIPS, is a retired chief petty officer from the Royal Bahamas Defence Force (RBDF), lead investigator on the 2004 Lorequin Commission of Inquiry, a former chief supplies officer of the Ministry of Health, procurement consultant at the

Ministry of Finance, adjunct facilitator on public procurement at the University of the Bahamas, and former component co-ordinator for the IDB-sponsored public financial management reform project, in particular public procurement reform.

He led the drafting team for the development of the Public Procurement Act 2021 and public procurement regulations, and assisted with the creation of the University of the Bahamas professional procurement officers training framework while managing the development of the e-procurement supplier registry. He is a chartered member of the Chartered Institute of Procurement and Supply with more than 25 years’ experience in public procurement. He was the Caribbean’s representative to the International Network of Public Procurement Officers for the years 2019-2021.