Topic Guide: Public Procurement

Public procurement law and corruption. Martini, M. Transparency International, 2015. http://www.transparency.org/files/content/corruptionqas/Public_procurement_law_and_corruption_2015.pdf

This Helpdesk answer goes into detail about best practice for public procurement laws, and how this can help to limit corruption in public procurement. Whilst acknowledging that procurement laws should be designed in accordance with each specific country’s context and legal tradition, the paper highlights some general issues that should be covered by all procurement regulations. These include clear and objective rules regarding the procurement methods available and the grounds under which each method should be used, transparent rules on the bidding process, including time limits, tender documents and contractor qualifications, and the evaluation criteria of bids and bidders. Moreover, it finds that procurement laws should include provisions for complaint mechanisms and the protection of whistleblowers, sanctions for non-compliance, measures to ensure the integrity of procurement officials, and provide for effective monitoring of awarded contracts.

Public procurement planning and corruption. Wheatland, B. Transparency International, 2015. http://www.transparency.org/files/content/corruptionqas/Public_procurement_planning_and_corruption_2015.pdf

This answer provides and overview of the corruption risks that are present in the planning stage of public procurement, and outlines the ways by which corruption risks can be reduced. The answer focusses on needs assessments, bidding plans, defining technical specifications of items being procured, and bidding documentation as these areas are most at risk of corruption. Common methods to reduce corruption risk include an adequate legal framework, transparency and public oversight, and adequately trained staff. A directive from the European Union has also recently come into effect, and EU member states must ensure that their national legislation is in line with these regulations which include specific regulations to reduce corruption risk.

The role of technology in reducing corruption in public procurement. Luijken, T., Martini, M., Transparency International, 2014. http://www.transparency.org/files/content/corruptionqas/The_role_of_technology_in_reducing_corruption_in_public_procurement_2014.pdf

This Helpdesk answer provides examples of good practice/case studies from various regions and countries on the role technology and e-procurement can play in reducing corruption in public procurement. The paper provides country examples of successful introduction of e-procurement in Albania, Georgia and South Korea. It concludes that e-procurement has the potential to prevent and reduce the opportunities for corruption at the different stages of public procurement. Nevertheless, the establishment of e-procurement as a standalone reform is unlikely to bring about positive transformational results. Countries have to invest in coherent legal frameworks, training and oversight capacity to ensure that the potential benefits of e-procurement, in terms of reducing corruption, are exploited to their maximum. (This Helpdesk answer is also available in French and Spanish.)

Blacklisting in public procurement. Martini, M., Transparency International, 2013. http://www.transparency.org/files/content/corruptionqas/Blacklisting__in__public__procurement.pdf

Blacklisting, or debarment, typically refers to the procedure that excludes companies and individuals involved in wrongdoings from participating in tendering projects. A blacklisting register is often consolidated in one place, and can either be made available to the wider public or only to contracting authorities. In order to have an efficient and fair system in place, blacklisting should be based on clear rules and on the principles of fairness and accountability, transparency, good judicial practice and uniformity. Many countries and international organisations have introduced blacklisting systems due to corruption, but only a few, such as Bangladesh, Brazil, Pakistan and Uganda, have established a public and central register or database of all companies and individuals that have been debarred. Despite the use of blacklists, there is very limited evidence of the impact of such lists in reducing corruption.

Conflict of interest in public procurement. Martini, M., Transparency International, 2013. http://www.transparency.org/files/content/corruptionqas/Conflict_of_interest_in__public_procurement.pdf

This answer provides an overview of how to prevent and avoid conflict of interest in public procurement. In particular, countries should enact guidelines with a clear definition of conflict of interest, as well as put forth requirements for officials involved in the procurement process to disclose information on their private interests and assets, in addition to excusing themselves from certain decision-making processes and prohibiting them from performing certain functions if the opportunities for conflict of interest exist. In addition, access to information, stakeholder participation in key stages of the procurement cycle and clear review mechanisms are essential to transparency and accountability in public procurement and, therefore, are essential in preventing conflict of interest and other forms of corruption. Moreover, effective implementation and enforcement of the law are key to create a deterrent effect and ensure integrity during the process.

Overview of principles for monitoring and challenging public procurement contracts. Agator, M., Transparency International, 2013. http://www.transparency.org/files/content/corruptionqas/Overview_of_principles_for_monitoring_and_challenging_public_procurement_contracts.pdf

The paper provides an overview of the most widely used instruments and principles related to monitoring public procurement and awarded contracts, including information on sanctions (for example, administrative sanctions and cancellation of contracts) and means to challenge procurement processes and concessions. Common elements include the need for internal controls and external audits, as well as autonomy of oversight units. The strongest instruments also require the involvement of civil society and the systematic blacklisting of companies involved in wrongdoings. In addition, international standards require states to implement effective redress mechanisms to any person having or having had an interest in obtaining a particular public procurement contract.

The benefits of open contracting. Chêne, M., U4/Transparency International, 2012. http://www.u4.no/publications/the-benefits-of-open-contracting/downloadasset/2898

This Helpdesk answer provides an overview of the benefits of open contracting and highlights the evidence base and research gaps in this area. It also provides an overview of open contracting approaches and lessons learned, with a special focus on extractive industries, infrastructure and forestry. The paper found that good practice in this area involves mandated or non-mandated proactive disclosure of contract information in user-friendly formats, from the awarding process to the monitoring and evaluation of contract implementation, with open access to the public, ideally through online platforms. However, more consultation with key stakeholders is needed to ensure maximum levels of transparency

Examples of procurement compliance checklists. Chêne, M., U4/Transparency International, 2010. http://www.transparency.org/files/content/corruptionqas/236_Examples_of_procurement_compliance_checklists.pdf

Procurement compliance checklists constitute an important element of corruption risk management strategies in procurement processes, both in terms of prevention and detection of fraud and corruption. They can guide procurement staff through the process of transparent and effective procurement and help detect and report irregularities. Compliance checklists reflect good practice in procurement processes by providing a set of indicators to assess adherence to the agency’s procurement rules and regulations. They are often structured around the major phases of the procurement cycle and typically cover the various risks associated with each phase of the contracting process, using red flags and “blinking” indicators. The paper also outlines details for successful implementation of such compliance checklists.