Module 13 - Transparent Public Procurement
Module 13 - Transparent Public Procurement
                         Time           Day 1: Fundamentals        Day 2: Ethics and public   Day 3: Organizational       Day 4: Individual ethical   Day 5: Developing a
                                        of ethics and public       integrity at the           change for enhanced         behavior                    strategy, roadmap and
                                        integrity                  institutional and policy   ethics and integrity                                    action plan for
Training agenda
                                                                   level                                                                              enhanced ethics and
                                                                                                                                                      public integrity
                         Morning        Module 1 - How             Module 6 -                 Module 11 - Staff           Module 14 - Ethical         Module 18 - Preparation
                                        would a world without      Accountability             management and              leadership                  phase
                                        corruption look?           institutions               developing capacities
                                                                                              for integrity 
Lunch break
                                        Module 5 -                 Module 10 -
                                        International              Whistleblowing
                                        frameworks for
                                        integrity and anti-
                                        corruption
UN Photo/Stuart Price
UN Photo/Stuart Price
What is public
procurement?
• “The acquisition through purchase or
  lease of real property, goods or other
  products (including intellectual property),
  works or services” (United Nations 2012);
• Public procurement ranges from small
  scale acquisitions (e.g. office materials
  and textbooks for schools) to large-scale
  construction works (e.g. roads, bridges
  and airports);
• Taxpayers’ money is spent requiring
  “value for money” (UNODC 2013).
Why is public
procurement important?
•   Worldwide, public procurement spending
    averages between 13 per cent and 20 per
    cent of gross domestic product (OECD
    2013a);
•   Every year an estimated average of US$9.5
    trillion of public money is spent by
    governments through public procurement
    (Spruill 2013);
•   Money drained through corruption amounts
    to between 20 per cent and 25 per cent of
    the procurement budget, that is around US$2
    trillion annually (OECD 2013b: 22).
Challenge:
• The capacity to manage SPP processes is a major challenge in many countries, calling for skills development,
   resources and a change in attitudes. 
• Enhancement of skill sets could be provided through targeted training with a view to ensuring that procurers are fully
   aware of the SPP methods and tools available to them (United Nations Department of Economic and Social Affairs
   2020).
UN Photo/Stuart Price
Conflict of interest
Patronage / nepotism
Extortion
Fraud
Collusion
  Embezzlement
                                                                               Heggstad & Frøystad 2011: 7-12
OECD 2016: 6
Frequency of bribery in
procurement
                                                                                                             6. Erosion of public
                                                                              5. Impact on health            confidence in the
                                                                              and human safety               integrity of public
                                4. Environmental                              E.g. through sub-standard      servants and
                                impacts                                       medication
                                                                                                             institutions (Deyong et
                                E.g. illegal use of natural                                                  al. 2018)
                                resources
                                                                                                             Unprecedented government
                                                                                                                     spending
Illustration inspired by Council of Europe / Group of States against Corruption 2020 
                                                         06                                                  04
 05. Exploitation of socioeconomic                                                                                             04. Fraudulent marketing of
 support schemes due to “pay now,                                                                                              counterfeit or and substandard
              check later” approach                                                05                                          medical supplies
                                              Council of Europe / Group of States against Corruption 2020; UNODC 2020a 
UN Photo/Stuart Price
                                           Civil society
                                                                               E-procur             Transparency /
                                           engagement                                   emen
                                                                                  systems t            access to
                                                                                                 procurement-related
                                                                                                      information
                                                                                Standardized
                                                                                                 Risk management
                                                                                mechanisms
                                                                               Comprehensive        Control
                                                                              and unambiguous    mechanisms and
                                                                               legal framework     sanctions
Procurement laws
• Provision of clear and objective rules                                          Model Law on Public Procurement developed by
  regarding the available procurement                                             the UN Commission on International Trade Law
  methods and how they should be used;                                               (UNCITRAL) and last published in 2014
Government of Western Australia – Department of Finance 2016
Staff management
                                                                                          Conflict of interest management
              Adequate remunerations
OECD 2009
                                                                                       Civil society-led
Civil society procurement                                Social witness            procurement (Simone &
        monitoring                                 programs / integrity pacts   Shah 2012; Transparency
                                                                                     International 2015)
Open contracting
                                                              • Open contracting is a cornerstone of civil society
                                                                involvement, since it enables access to
                                                                information related to the formation, award,
                                                                execution, performance and completion of
                                                                public contracts;
                                                              • Good practice recommends that open
                                                                procurement is established as the default method
                                                                of procurement;
                                                              • Increased disclosure and participation in public
                                                                contracting is expected to make contracting more
                                                                competitive and fair, improving contract
                                                                performance and enabling public consultation
                                                                and monitoring of public contracting(Open
                                                                Contracting Partnership n. y.).
Blacklisting or debarment
• Measures exclude companies and individuals involved in wrongdoings
  from participating in tendering procedures;
• A blacklisting register is often consolidated in one place, and can
  either be made available to the wider public or only to contracting
  authorities;
• Blacklisting should be based on clear rules and on the principles of
  fairness and accountability, transparency, good judicial practice and
  uniformity;
• Best practice would require such lists to be binding on
  public procurement decisions within the respective jurisdiction
  (Jennet 2006; Transparency International 2006).
    Toolkit on Transparency, Accountability and Ethics in Public Institutions   33
                          Module 13 – Transparent public procurement
Integrity pacts
                                                         Bidding companies and procurement staff sign a pact to commit
                                                         abstaining from bribery.
E-Procurement (1)
E-Procurement refers to internet-based inter-
organizational information systems that automate
and integrate any parts of the procurement process
for the purpose of:
• Reduction of costs of information provision;
• Ensuring easy access to information; 
• Standardization of information gathering, reporting
   and filing;
• Minimizing personal interaction between the
   procuring agency and bidders ;
• Automating practices prone to corruption (e.g.
   system-based electronic submission of bids);
• Facilitating contract oversight;
• Improving control and audit capabilities;
• Improves quality of bids (e.g. legibility)
   (Transparency International 2014).
E-Procurement (2)
• In line with the SDG 16 principles of greater
  transparency and accountability, more
  governments are using online platforms for
  public procurement and for the recruitment of
  public servants.
• 30 per cent increase in the number of
  countries publishing government vacancies
  online between 2018-2020, with 80 per cent of
  Member States now offering this feature.
• Trend towards one-stop shops enabled via
  specialized e-portals where people and
  companies can access information, collect
  data, request documents, engage in
  transactional services, perform legal
  obligations and be involved in more
  participatory governance (UNDESA 2020).
E-Procurement (3)
UN Photo/Stuart Price
                                                                                   Georgia:
                                                                                   E-
                                                                                              t
                                                                                   Procuremen
                                                                                                                 an:
                                                                                                           Pakist Pacts
                                                                                                                 ity
                                                                                            United Arab    Integr
examples
Practical
                                                                                            Emirates: E-
                                                                                            Procurement
                                                                                            System
                                       Chile:
                                                   nt
                                       Procureme
                                                   ce
                                       Performan
                                        Indicators
                             Canada reported that it launched a COVID-19 contract information web page to provide
                             updates on the procurement of essential medical supplies and equipment in response to
                             the pandemic. The page contains information on suppliers, the type of item purchased and
                             the total contract value.
                             In Mexico, central audit authorities modified their workplans to review acquisitions related
                             to COVID-19. As of mid-August 2020, authorities had monitored nearly 7,000 procurement
                             procedures for goods and/or services to ensure that the emergency is not used as a
                             pretext to cover up embezzlement.                                               UNODC 2020b: 23-25
UN Photo/Stuart Price
Activity
UN Photo/Mark Garten
                                                                               Resources
   Time
                                                                               The case study and guiding questions are presented on the
   Overall, ca. 30 minutes can be dedicated to the completion
                                                                               following slides and can be handed out to particpants
   of this activity.
                                                                               separately.
Freepik / freepik
Freepik / freepik
    Did Theodore act ethically? Why/why not? What should he have done?
    Did George act ethically? Why/why not? What should he have done?
Freepik / freepik
Quiz (1)
1. How much money is lost annually to corruption worldwide annually through public
procurement?  
A.    Approximately USD 1 billion.
B.    Approximately USD 10 billion.
C.    Approximately USD 1 trillion.
D.    Approximately USD 2 trillion.
2. Types of corruption in public procurement include (choose all that apply): 
E.    Bribery.
F.    Nepotism.
G.    Fraud.
H.    Collusion.
Quiz (2)
3. Impact of corruption in public procurement includes (choose all that apply): 
A.    Poor quality of goods.
B.    Can speed up development.
C.    Illegal use of natural resources.
D.    Impact on health and human safety, e.g. through sub-standard medication.
E.    Erosion of trust.
4. Some of the tools of clean public procurement include (choose all that apply): 
F.    E-procurement.
G.    Blacklisting.
H.    Blackmailing.
I.    Open contracting.
Quiz (3)
5. Are promoting clean procurement practices included in the 2030 Agenda for Sustainable
Development? 
A.    Yes.
B.    No.
                                                Caucasus Research Resource Centers (February 2017). The state procurement system in Georgia. Companies‘ views (Part 2). Retrieved from
                                                         http://crrc-caucasus.blogspot.com/2017/02/the-state-procurement-system-in-georgia.html (last accessed on April 20, 2020).
                                                Council of Europe / Group of States against Corruption (April 2020). Corruption Risks and Useful Legal References in the context of COVID-19. Retrieved from
                                                           https://rm.coe.int/corruption-risks-and-useful-legal-references-in-the-context-of-covid-1/16809e33e1 (last accessed on October 1, 2020).
                                                De Simone, F. & Shah, S. (2012). Civil Society Procurement Monitoring: Challenges and Opportunities. In Bohorquez, E. & Devrim, D. (Eds.). A New Role for Citizens in
                                                         public Procurement. Mexico City: Transparencia Mexicana.
                                                Deyong, M., Ferguson, G., Halma, E. & Bildfell, C. (2018). Corruption and Public Procurement. In Ferguson, G. (Ed.). Global corruption: Law, theory & practice, Ch. 11
                                                         (pp. 941-1005). University of Victoria (Canada). Retrieved from
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