Every jurisdiction has a public procurement policy. In its simplest form, the policy consists of only seven words: we promote fair, open and transparent procurement. In higher levels of government, the policy can be lengthy, embracing principles and goals that are then expanded into rules and regulations.
Simply stated, many of these policies are deficient as they address only part of the process and neglect certain strategic issues. The deficiencies are generated by an incomplete policy framework, the “set of principles and long-term goals that form the basis of making rules and guidelines, and give overall direction to planning and development of the organization.”
Most procurement policies deal quite well with the bidding process and elements of transparency. But they are often deficient in other areas, such as corruption resistance, accountability and control.
In 2007, the OECD produced an excellent report describing the key elements which should be addressed by any policy framework for public procurement.
The report, in the form of a checklist and explanatory text, provides guidance for governments in developing and implementing an adequate policy framework for promoting integrity in public procurement. This report is divided into two parts. The first focuses on developing an effective framework for public procurement based on four elements: transparency, management, corruption resistance and accountability. The second provides guidance for implementing this policy framework at each stage of the procurement cycle.
Here is their 10-point checklist. Each element is discussed in depth in the report.
DEVELOPING THE POLICY FRAMEWORK
Elements of transparency
1. Ensuring an adequate degree of transparency to promote fair and equitable treatment throughout the whole procurement cycle.
2. Taking precautionary measures in “grey areas” to enhance integrity where competitive bidding is not required by procurement regulations.
Elements of management
3. Ensuring that public funds are used in procurement according to the purposes intended.
4. Professionalizing public procurement through a common body of knowledge, skills and ethical standards.
Elements of corruption resistance
5. Building organizational resistance to corruption in public procurement.
6. Working closely with the private sector, in particular contractors, to maintain high standards of integrity and quality.
7. Providing adequate mechanisms for the monitoring, detection, investigation and prosecution of corruption in procurement.
Elements of accountability and control
8. Establishing a clear chain of responsibility together with effective control mechanisms.
9. Enabling the resolution of bidders’ complaints in a fair and timely manner.
10. Enabling stakeholders and the wider public to scrutinize public procurement.
IMPLEMENTING THE POLICY FRAMEWORK
This part provides practical guidance for enhancing integrity at each stage of the public procurement cycle, from needs assessment to contract management and payment. The procurement cycle has three main phases.
First, there is the pre-bidding phase, including needs assessment, planning and budgeting, definition of requirements and choice of procedures. Then there is the bidding phase, including the invitation to bid and award, followed by the post-bidding phase involving the contract management, order and payment.
For each stage of the procurement cycle, the OECD provides practical guidance on the common risks to integrity and precautionary measures to prevent them.
The complete report is 36 pages long and provides lots of discussion and specific examples that materially assist an agency in its review of its policy framework.
Use this draft checklist to evaluate your organization’s policy framework, its policy and the resulting procedures. It can help you identify shortcomings and develop a more robust, comprehensive policy, which will reduce the risks to the integrity of your procurement efforts.
For more information, see Organisation for Economic Co-operation and Development, Draft Checklist for Enhancing Integrity in Public Procurement: www.oecd.org/dataoecd/18/15/38944200.pdf