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Module 13 - Transparent Public Procurement

The document outlines a training agenda over 5 days on transparency, accountability, and ethics in public institutions, with one of the modules focusing on transparent public procurement. The module on public procurement discusses what public procurement is, why it is important, corruption risks in the process, tools for clean procurement, and includes a case study activity. The overall objectives of the module are to learn about the importance of public procurement, risks of corruption, and tools to enable transparency.

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Jordani Mike
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100% found this document useful (1 vote)
128 views63 pages

Module 13 - Transparent Public Procurement

The document outlines a training agenda over 5 days on transparency, accountability, and ethics in public institutions, with one of the modules focusing on transparent public procurement. The module on public procurement discusses what public procurement is, why it is important, corruption risks in the process, tools for clean procurement, and includes a case study activity. The overall objectives of the module are to learn about the importance of public procurement, risks of corruption, and tools to enable transparency.

Uploaded by

Jordani Mike
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Module 13 –

Transparent public procurement  


Toolkit on Transparency, Accountability and Ethics in
Public Institutions
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 

Module 2 - Essentials Module 7 - Social Module 12 - Creating an Module 15 - Assessing


of ethics and public accountability organizational culture of personal vis-à-vis
integrity mechanisms ethics and integrity organizational values

Lunch break

Afternoon Module 3 - Module 8 - Integrity Module 13 - Transparent Module 16 - Behavioral Module 18 - 


Transparency and codes public procurement insights and staff Presentation and
accountability incentives feedback phase

Module 4 - Module 9 - Managing Module 17 - How to


Understanding and conflict of interest promote desired
assessing corruption behavioral change?

Module 5 - Module 10 -
International Whistleblowing
frameworks for
integrity and anti-
corruption

Toolkit on Transparency, Accountability and Ethics in Public Institutions 2


Module 13 – Transparent public procurement

What is public procurement Corruption risks in the public


01 and why is it important?
02 procurement process
Module agenda

03 Tools for clean public 04 Practical examples


procurement

05 Activity: Case study: COVID-


19 and public procurement in
hospitals plus Quiz

UN Photo/Stuart Price

Toolkit on Transparency, Accountability and Ethics in Public Institutions 3


Module 13 – Transparent public procurement

In this module you will learn about :


• The importance of public procurment, sustainable public
procurmeent and how it is nested in public financial management;
• Corruption risks in the public procurement process, including in
emergency situations;
objectives
Learning

• Consequences of corruption in public procurement;


• Tools for enabling transparent public procurement such as integrity
pacts or digital technologies.

Toolkit on Transparency, Accountability and Ethics in Public Institutions 4


Module 13 – Transparent public procurement

What is public procurement Corruption risks in the public


01 and why is it important?
02 procurement process
Module agenda

03 Tools for clean public 04 Practical examples


procurement

05 Activity: Case study: COVID-


19 and public procurement in
hospitals plus Quiz

UN Photo/Stuart Price

Toolkit on Transparency, Accountability and Ethics in Public Institutions 5


Module 13 – Transparent public procurement

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).

Toolkit on Transparency, Accountability and Ethics in Public Institutions 6


Module 13 – Transparent public procurement

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)​.

Toolkit on Transparency, Accountability and Ethics in Public Institutions 7


Module 13 – Transparent public procurement

Why is it essential for the SDGs?


Clean public procurement is a key component for supporting the achievement of the
SDGs. Examples of related SDG targets include:

Target 8.8 Target 3.9


Protect labor rights and Reduce the number of deaths and illnesses
promote safe and secure from hazardous chemicals and air, water and
working environments for soil pollution and contamination​
all workers, including Target 12.7
migrant workers, in Promote public
particular women migrants, procurement practices that
and those in precarious are sustainable in
employment accordance with national
policies and priorities​

Toolkit on Transparency, Accountability and Ethics in Public Institutions 8


Module 13 – Transparent public procurement

Sustainable public procurement (SPP)

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).

Toolkit on Transparency, Accountability and Ethics in Public Institutions 9


Module 13 – Transparent public procurement

What is public procurement Corruption risks in the public


01 and why is it important?
02 procurement process
Module agenda

03 Tools for clean public 04 Practical examples


procurement

05 Activity: Case study: COVID-


19 and public procurement in
hospitals plus Quiz

UN Photo/Stuart Price

Toolkit on Transparency, Accountability and Ethics in Public Institutions 10


Module 13 – Transparent public procurement

Types of corruption in public procurement


Bribery / kickback

Conflict of interest

Patronage / nepotism

Extortion

Fraud

Collusion

Embezzlement
Heggstad & Frøystad 2011: 7-12

Toolkit on Transparency, Accountability and Ethics in Public Institutions 11


Module 13 – Transparent public procurement

Occurrence of bribery by service

OECD 2016: 6

Toolkit on Transparency, Accountability and Ethics in Public Institutions 12


Module 13 – Transparent public procurement

Frequency of bribery in
procurement

OECD 2017: 9; Statistics from


Daniel Kaufmann, The World
Bank (2006), based on Executive
Opinion Survey 2005 of
the World Economic Forum
covering 117 countries. Question
posed to the firms was: „In your
industry, how commonly firms
make undocumented extra
payments or bribes connected
with permits /
utilities / taxation /
awarding of public contracts /
judiciary?“

Toolkit on Transparency, Accountability and Ethics in Public Institutions 13


Module 13 – Transparent public procurement

Impacts of corruption in procurement


1. Waste of public
resources  2. Poor quality of
goods or works​
Through increased costs of
purchases, investments,
services or diminished income 3. Slowed down
from licenses, permits and development​
concessions​

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

Toolkit on Transparency, Accountability and Ethics in Public Institutions 14


Module 13 – Transparent public procurement

UNCAC and public procurement


• UNCAC requires states to criminalize
and sanction a range of corrupt activities,
including bribery of national
public servants, embezzlement, trading
in influence and illicit enrichment;
• Article 9 stipulates to “take the necessary
steps to establish appropriate systems
of procurement, based on
transparency, competition and objective
criteria in decision-making, that are
effective, inter alia, in preventing
corruption.”
Toolkit on Transparency, Accountability and Ethics in Public Institutions 15
Module 13 – Transparent public procurement

Public financial management


Public procurement is an essential part of the annual
budget cycle which aims to ensure that public expenditure
is well planned, executed, accounted for, and scrutinized.
It typically centers around the following key phases:
• Budget formulation: The budget is prepared with due
regard to government fiscal policies, strategic plans,
and adequate macroeconomic and fiscal projections.
• Budget execution: The budget is executed within a
system of effective standards, processes, and internal
controls, ensuring that resources are obtained and used
as intended.
• Accounting and reporting: Accurate and reliable
records are maintained, and information is produced
and disseminated at appropriate times to meet
decision-making, management, and reporting needs.
• External security and audit: Public finances are Public
independently reviewed, and there is external follow-up procurement
on whether the executive has implemented the Kromann Kristensen et al. /
recommendations for improvement. The World Bank Group 2019:
1-3

Toolkit on Transparency, Accountability and Ethics in Public Institutions 16


Module 13 – Transparent public procurement

Public procurement process

Planning stage Tendering stage Post-award stage


• Needs assessment; • Opening, dissemination and • Contract implementation and
• Initial market research; management of the call for administration;
• Budget allocation; tenders procedure; • Review and control of quality
• Initiating purchase requisition; • Receipt and evaluation of bids; and timeliness of deliverables;
• Preparation of the call for • Contract negotiation and • Invoice approvals and
tenders. award. processing of payments.
Heggstad & Frøystad 2011: 3-4; OECD 2009

Toolkit on Transparency, Accountability and Ethics in Public Institutions 17


Module 13 – Transparent public procurement

Corruption risks at the planning stage


• Needs assessments is manipulated, inflated
or artificially induced;
• Identification of projects serving interests
of particular bidders or the private interests of
procurement staff; ​
• Specifications may be tailored to capacity of
only one company;
• Companies are pre-qualified due to illegal
payments or favoritism​;
• Goods and services to be procured are not in
line with the overall investment plan of the
government​;
• Selection and award criteria are not
established in advance (Transparency
International 2014. 2-3).

Toolkit on Transparency, Accountability and Ethics in Public Institutions 18


Module 13 – Transparent public procurement

Corruption risks at the tendering stage


• Distorting competition and
favoring particular bidders, e.g.
unfair advantage through
exclusive access to information​;
• Bribes or kickbacks in exchange
for a contract award​;
• Bidders conspire to fix the
outcome of a bid and inflate
contract prices which are then
shared between bidders
(Transparency International 2014:
2-3).
Toolkit on Transparency, Accountability and Ethics in Public Institutions 19
Module 13 – Transparent public procurement

Corruption risks at the post-award


stage
• False invoicing​;
• Overbilling​;
• Underperformance and
failure to meet
standards specified
(Transparency
International 2014: 2-
3).
Toolkit on Transparency, Accountability and Ethics in Public Institutions 20
Module 13 – Transparent public procurement

High-risk areas in public procurement


  Urgent purchases Large contracts

Complex technology Emergency responses

Sector vulnerability Links to funding schemes

Transparency International 2014: 18-21

Toolkit on Transparency, Accountability and Ethics in Public Institutions 21


Module 13 – Transparent public procurement

Example: Corruption risks in public procurement


during the COVID-19 crisis (1)
Problem driver Possible consequences
Rule by decrees, executive
orders, ordinances etc. with
limited parliamentary oversight

Interference with standard rules


Concentration and procedures
(COVID-19) State of of power at
crisis emergency the level of the
executive Fast-track procedures forced by
tight deadlines

Unprecedented government
spending
Illustration inspired by Council of Europe / Group of States against Corruption 2020 

Toolkit on Transparency, Accountability and Ethics in Public Institutions 22


Module 13 – Transparent public procurement

Example: Corruption risks in public procurement


during the COVID-19 crisis (2)
08. … 01 01. Simplified public procurement
Can you think of other rules for COVID-19-related products
integrity problems and services
that occurred during 08 02
the (COVID-19) crisis?
07. … 02. Bribery by patients for the
provision of medical services when
the capacity of hospitals is
stretched
07 03
06. Compromised cybersecurity due 03. Lobbying and conflicts of
to reliance on digital platforms interests of for example
pharmaceutical companies related
to research and development

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 

Toolkit on Transparency, Accountability and Ethics in Public Institutions 23


Module 13 – Transparent public procurement

What is public procurement Corruption risks in the public


01 and why is it important?
02 procurement process
Module agenda

03 Tools for clean public 04 Practical examples


procurement

05 Activity: Case study: COVID-


19 and public procurement in
hospitals plus Quiz

UN Photo/Stuart Price

Toolkit on Transparency, Accountability and Ethics in Public Institutions 24


Module 13 – Transparent public procurement

Requirements for clean public procurement

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

Toolkit on Transparency, Accountability and Ethics in Public Institutions 25


Module 13 – Transparent public procurement

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

• Rules on the bidding process, incl. time


limits, tender documents, contractor
qualifications, evaluation criteria of bids and
bidders, complaint and redress mechanisms
and sanctions for non-compliance​;
• Provisions for the effective monitoring of
awarded contracts through proactive
disclosure and civil society organizations
acting as watchdog​s;
• Measures to ensure the integrity of
procurement staff in public administrations
(Transparency International 2011).

Toolkit on Transparency, Accountability and Ethics in Public Institutions 26


Module 13 – Transparent public procurement

Red flag assessment


Stage in the public Examples of red flags
procurement process
Planning • Series of procurements of similar goods or services in amounts below the
threshold for open competitive bidding.
Tendering • Exclusion of experienced bidders on minor technicalities;
• Bids submitted and accepted after the submission deadline;
• Failure to answer requests for clarification in good time or giving evasive
answers.
Evaluation of bids • Evaluation criteria are amended after receipt of bids;
• Political figures on the evaluation committee;
Post-award / contract • Staff involved in contract award decisions is involved in contract supervision;
Implementation • Unreasonable delays in negotiating and executing the contract;
• Cost overruns are inadequately explained or justified.
OECD 2017; Transparency International 2014: 21-25

Toolkit on Transparency, Accountability and Ethics in Public Institutions 27


Module 13 – Transparent public procurement

Defining brackets and ceilings


Brackets and ceilings provide a simple and
powerful tool for risk management.

Government of Western Australia – Department of Finance 2016 

Toolkit on Transparency, Accountability and Ethics in Public Institutions 28


Module 13 – Transparent public procurement

Staff management
Conflict of interest management​
Adequate remunerations​

Merit-based recruitment​ Post-employment regulations​

Regular training for high


standards of professionalism​ Gifts and gratitude policy​

Dedicated code of conduct for Reporting channels for


procurement staff​ wrongdoings

OECD 2009

Toolkit on Transparency, Accountability and Ethics in Public Institutions 29


Module 13 – Transparent public procurement

Leveraging behavioral insights


• Reduce barriers for ethical
behavior through standardized
approaches to information gathering
(e.g. forms, checklists), reporting and
filing​;
• Enhance professionalism by treating
procurement as a specific career path
with adequate payment and certification​;
• Conduct dedicated integrity trainings to
raise awareness on corruption risks and
suitable responses​;
• Nudging through, e.g. default setting,
moral reminders, renewed commitment,
“thank you” notes, forms etc. (Hayman
2017).
Toolkit on Transparency, Accountability and Ethics in Public Institutions 30
Module 13 – Transparent public procurement

Monitoring, oversight, stakeholder engagement


External oversight by civil
society and media
Well-resourced and Consultation of external enabled
independent audit bodies​ technical experts through maximum
transparency of the
procurement process​

Civil society-led
Civil society procurement Social witness procurement (Simone &
monitoring​ programs / integrity pacts​ Shah 2012; Transparency
International 2015)

Toolkit on Transparency, Accountability and Ethics in Public Institutions 31


Module 13 – Transparent public procurement

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.).

Toolkit on Transparency, Accountability and Ethics in Public Institutions 32


Module 13 – Transparent public procurement

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​.

Integrity pacts set out rights and obligations to the effect


that neither side will pay, offer, demand or accept bribes; nor
will bidders collude with competitors to obtain the contract, or bribe
representatives of the authority while carrying it out.​

Independent watchdogs oversee the implementation and ensure all


parties uphold their commitments (Transparency International
2013).

Toolkit on Transparency, Accountability and Ethics in Public Institutions 34


Module 13 – Transparent public procurement

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).

Toolkit on Transparency, Accountability and Ethics in Public Institutions 35


Module 13 – Transparent public procurement

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).

Toolkit on Transparency, Accountability and Ethics in Public Institutions 36


Module 13 – Transparent public procurement

E-Procurement (3)

OSI = Online Services Index UNDESA 2020: 32

Toolkit on Transparency, Accountability and Ethics in Public Institutions 37


Module 13 – Transparent public procurement

Prioritizing clean public procurement measures


when resources and capacities are limited
Prevention Detection
Measures are easy to put in place, Measures are cheap to put in
but their impact is hard to place.
measure.
Prevention is proactive, changing Detection is reactive and focussed
attitudes and structures for long- on the person detected.
term change.
Research has repeatedly proven that the most effective prevention and
detection is the perception of being caught. Whistleblowing is an
effective tool for detection (UNODC 2013).
Toolkit on Transparency, Accountability and Ethics in Public Institutions 38
Module 13 – Transparent public procurement

What is public procurement Corruption risks in the public


01 and why is it important?
02 procurement process
Module agenda

03 Tools for clean public 04 Practical examples


procurement

05 Activity: Case study: COVID-


19 and public procurement in
hospitals plus Quiz

UN Photo/Stuart Price

Toolkit on Transparency, Accountability and Ethics in Public Institutions 39


Module 13 – Transparent public procurement

Georgia:
E-
t
Procuremen
an:
Pakist Pacts
ity
United Arab Integr
examples
Practical

Emirates: E-
Procurement
System

Chile:
nt
Procureme
ce
Performan
Indicators

Toolkit on Transparency, Accountability and Ethics in Public Institutions 40


Module 13 – Transparent public procurement

Chile: Procurement Performance Indicators


• Supported by political will, Chile defined clean procurement as a key objective of the country-
wide Public Management Improvement Program;
• The Program specifies key performance indicators for employees in procurement, such as:
• Rate of acquisitions made as an emergency purchase process;
• Amount of the acquisition’s budget executed via public bids;
• Difference between annual plan and actual acquisitions​;
• Dedicated agency to facilitate clean procurement by fixing goals and evaluating improvements​
;
• It establishes rewards at individual and organizational levels​(e.g. salary increases are tied to
good performance and it gives recognition to the procurement function through adequate
salaries);
• Dedicated training of procurement employees;​
• Results: Nearly all agencies achieved a higher quality level in the procurement function;
• Winner of the 2019 UN Public Service Award.
OECD 2017: 64

Toolkit on Transparency, Accountability and Ethics in Public Institutions 41


Module 13 – Transparent public procurement

Georgia: E-Procurement (1)

World Bank 2015

Toolkit on Transparency, Accountability and Ethics in Public Institutions 42


Module 13 – Transparent public procurement

Georgia: E-Procurement (2)

Caucasus Research Resource Centers 2017

Toolkit on Transparency, Accountability and Ethics in Public Institutions 43


Module 13 – Transparent public procurement

Georgia: E-Procurement (3)

Caucasus Research Resource Centers 2017

Toolkit on Transparency, Accountability and Ethics in Public Institutions 44


Module 13 – Transparent public procurement

United Arab Emirates: E-Procurement System


• Integrated e-procurement system
initiated by the government (
https://esupply.dubai.gov.ae/web/l
ogin.html
);
• Profit-driven online marketplace
that enables budgeting, purchasing
and payment processes combined
in one platform​;
• Reduced duplication of
procurement functions and offices
through a unified and user-friendly
OECD 2017: 59
procurement system.​
Toolkit on Transparency, Accountability and Ethics in Public Institutions 45
Module 13 – Transparent public procurement

Pakistan: Integrity Pacts


What? Benefits
• Integrity pacts initiated in cooperation with • TI Pakistan estimated the net savings
Transparency International Pakistan for the  at PKR 837 million​;
“K–III Greater Karachi Water Supply Scheme“​;
• 2-phase program: (1) selection of • Increased transparency of the
consultants for the design and supervision; procurement process​;
and (2) the selection the of contractors;
• Consideration of both technical quality
• Review of the letter of invitation to tender by and price of submitted bids​;
Transparency International Pakistan
regarding objective evaluation criteria • Definition of objective criteria for
and successive evaluation of technical and evaluating bids (Transparency
financial proposals (two-envelope system International Pakistan n. y.).
used in the bids submission)​.

Toolkit on Transparency, Accountability and Ethics in Public Institutions 46


Module 13 – Transparent public procurement

Monitoring mechanisms for procurement during crises


and in the context of COVID-19
Countries implemented monitoring mechanisms to ensure integrity in procurement in
the context of COVID-19, including through the use of existing or newly designated
entities or task forces, online platforms and portals, and reporting mechanisms:
The United Kingdom reported that its counter fraud function is working to identify new
opportunities to prevent fraud, including through the use of data and analytics and wider
legislative reviews via a new COVID-19 Fraud Ministerial Board.

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

Toolkit on Transparency, Accountability and Ethics in Public Institutions 47


Module 13 – Transparent public procurement

What is public procurement Corruption risks in the public


01 and why is it important?
02 procurement process
Module agenda

03 Tools for clean public 04 Practical examples


procurement

05 Activity: Case study: COVID-


19 and public procurement in
hospitals plus Quiz

UN Photo/Stuart Price

Toolkit on Transparency, Accountability and Ethics in Public Institutions 48


Module 13 – Transparent public procurement

Activity

UN Photo/Mark Garten

Toolkit on Transparency, Accountability and Ethics in Public Institutions 49


Module 13 – Transparent public procurement

Case study: COVID-19 and public procurement in


hospitals (1)
What?
- Participants should form a small group. Each group
Why?
should select a note-taker and rapporteur.
The purpose of this activity is for the participants to - Each group has 15 minutes to discuss the case.
discuss in small groups an ethical dilemma faced by many - Then, the rapporteur of each group is asked to present
public hospitals around the world due to the need for
rapidly procuring sufficient medical equipment and the group’s findings and ethical reasoning to others in a
supplies to treat COVID-19 patients. 3-minute presentation.
- The presentations are followed by a 5-minute
discussion with the whole forum.

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.

Toolkit on Transparency, Accountability and Ethics in Public Institutions 50


Module 13 – Transparent public procurement

Case study: COVID-19 and public procurement in


hospitals (2)

Theodore, Director of Procurement in a


large public hospital in a large city in the
grips of the COVID-19 pandemic, is
responsible for ensuring that the hospital
has sufficient equipment and supplies to
treat the large surge of patients needing
medical care due to COVID-19.
Freepik / freepik

Toolkit on Transparency, Accountability and Ethics in Public Institutions 51


Module 13 – Transparent public procurement

Case study: COVID-19 and public procurement in


hospitals (3)
The situation is dire and urgent, as
the hospital does not currently
have the sufficient equipment and
supplies to treat people coming in
with COVID-19 symptoms. Also,
doctors and nurses feel
vulnerable, as they do not have
sufficient personal protective
equipment and many of them are
falling ill, creating staff shortage.

Freepik / freepik

Toolkit on Transparency, Accountability and Ethics in Public Institutions 52


Module 13 – Transparent public procurement

Case study: COVID-19 and public procurement in


hospitals (4)
Theodore is under pressure and feels
relieved when he remembers his old
friend George owns a medical equipment
and supplies company named WellCare.
Theodore calls George and at the end of
the call they have an agreement that
Theodore’s order for equipment and
supplies will gets utmost priority in WellCare, LLC
WellCare’s manufacturing orders, putting
other smaller hospitals behind this order.
George also agreed that, as the order that
Theodore would be placing is so large, he
would get a 10 per cent discount on it.

Freepik / freepik

Toolkit on Transparency, Accountability and Ethics in Public Institutions 53


Module 13 – Transparent public procurement

Case study: COVID-19 and public procurement in


hospitals (5)

Theodore is very happy, as he has managed to ensure that


the hospital will have the equipment and supplies needed
on time and that he managed to save much needed funds
for the hospital. However, in order to proceed with the deal
with WellCare, Theodore decides to bypass the hospital’s
public procurement review board, as this would slow down
the process by two weeks a critical period during which
patients would die and doctors and nurses would remain
Freepik / freepik vulnerable to the virus.
Toolkit on Transparency, Accountability and Ethics in Public Institutions 54
Module 13 – Transparent public procurement

Case study: COVID-19 and public procurement in


hospitals (6)

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

Toolkit on Transparency, Accountability and Ethics in Public Institutions 55


Module 13 – Transparent public procurement

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.

Toolkit on Transparency, Accountability and Ethics in Public Institutions 56


Module 13 – Transparent public procurement

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.

Toolkit on Transparency, Accountability and Ethics in Public Institutions 57


Module 13 – Transparent public procurement

Quiz (3)
5. Are promoting clean procurement practices included in the 2030 Agenda for Sustainable
Development? 
A. Yes.
B. No.

Toolkit on Transparency, Accountability and Ethics in Public Institutions 58


Module 13 – Transparent public procurement

In this module you have learned that:


 Corruption in public procurement undermines development and public
integrity as a whole​;
 Risks occur throughout the procurement cycle and need to be adequate
detected and addressed​;
 Ensuring clean procurement requires a holistic approach, including
outcomes
Learning

prevention, detection and sanctioning​;


 Changing staff’s mindset is a prerequisite for clean public procurement​;
 E-Procurement can support existing public procurement efforts but is not a
silver bullet.

Toolkit on Transparency, Accountability and Ethics in Public Institutions 59


Module 13 – Transparent public procurement

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).
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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
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Deyong, M., Ferguson, G., Halma, E. & Bildfell, C. (2018). Corruption and Public Procurement. In Ferguson, G. (Ed.). Global corruption: Law, theory & practice, Ch. 11
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accessed on April 7, 2020).

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Module 13 – Transparent public procurement

OECD (2017). Integrity in Public Procurement. Good Practice from A to Z. Retrieved from https://www.oecd.org/development/effectiveness/38588964.pdf (last
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Open Contracting Partnership (n. y.). Open Contracting Global Principles. Retrieved from
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Transparency International (August 2014). The role of technology in reducing corruption in public procurement. Anti-corruption helpdesk. Providing on-demand
research to help fight corruption. Retrieved from
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Transparency International (February 2013). Blacklisting in public procurement. Anti-corruption helpdesk. Providing on-demand research to help fight corruption.
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Transparency International (July 2014). Curbing Corruption in Public Procurement: A Practical Guide. Retrieved from
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Transparency International (June 2015). Public Procurement Law and Corruption. Anti-corruption helpdesk. Providing on-demand research to help fight corruption.
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Module 13 – Transparent public procurement

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Credits for visuals:


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September 30, 2020).

Toolkit on Transparency, Accountability and Ethics in Public Institutions 62


Thank you.

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