Transparency in Public Procurement - Essay Example

Transparency in Public Procurement Transparency is not defined by Transparency International, but is instead offered as a core value of the institution, where id states that it seeks to be open, honest and accountable in its relationships with all, which is the organization’s definition of transparency.1 In global development, there are many problems facing transparency in public procurement, where not a single public project is unaffected, thus the need to ensure openness and look into factors and consequences of transparency in public procurement. Research on public procurement by Tabish indicates that there is not enough transparency in public transparency to ensure that losses do not occur in the pockets of greedy or fraudulent individuals.2 This is cited to be due to corruption, where research has shown that in India, the largest amount of funds lost in public procurement is the result of lack of transparency leaving loopholes for corrupt individuals to stash the cash or even collaborate with procuring agencies to make a kill from public funds. It is because of these lack of transparency in public procurement that corruption has acquired its definition in that it is defined as the use of public office for public gain, where this lack of transparency does not only contribute to the definition as there have been corruption cases in the private sector, as well. As such, the definition of corruption in public procurement has been perceived and surveyed by different agencies to look into the impacts. Transparency International states that bribery is the most common form of corruption emanating from multinational companies that then provide bribe money from the world’s richest nations in an attempt to clinch contracts meant for public procurement. It is this that eliminates the presence of a two-way glass and hoodwinks public officers into fraudulent and corrupt activities of denying qualified corporations and companies an opportunity to make their own much needed revenue through their own effort and in a competitive playing field, where only the best qualified company is picked. In citing corruption in public procurement, Tabish continues to mention he consequence of bribery due to elimination of a competitive process in selection of outsourcing companies. This way, Tabish says that the bribe money that rich corporations pay to receive contracts are usually then factored in the total cost of the contract, which she perceives to mean that the contract or the entire project will cost more than the earlier mentioned price of service and product procurement. She continues to state that the consequence of the lack of transparency is usually more than the bribe received by corrupt individuals seeking to benefit themselves as it all trickles down to the same person that received the bribe. This way, Tabish continues to highlight the price of lack of transparency and how it comes into being discarded by mentioning that cultural norms, ethics and accountability contribute greatly towards transparency or lack of it public procurement.3 As such, it is said that corruption or beach of transparency can be achieved or carried out at any stage in a procurement process meaning that there is not a single phase or project that is safe from corruption. Studies further indicate that lack of transparency was directly related to systems of functions that involve corruption and the ability to look into projects that have both quality and quantity at high levels.4 This was because, transparency to Tabish, is a clear and concise means to achieve a project free of irregularities at all phases, and even exempt it from manifestation. A special report on E-governance portrays a number of practices, as being the best in ensuring transparency in procurement, where turning all systems to digital and internet based is the way to go. The report quotes Korea as an example of promoting transparency in procurement, where certain conditions must be met prior to a contract award to a company in all of its qualifications or lack of them thereof. From this perspective, it cites that all public procurements are handled online without a link to other procurement means other than the online system, where efficiency is the key.5 It further mentions a condition that all companies in the process need to be registered, and can therefore bid in supply of goods or services to any public agency. In spite of the bidding being electronic, not all of it done as so, as there is an 8% window for other means of bidding for public projects. Further mentions by this report cite the possibility of real-time monitoring of procurement processes so that all steps of the procurement procedure can be followed and queries raised at any time. However, there is mention of a need to have a secure system to have the procurement bidding done on to avoid tamper and ensure full efficiency, as well as transparency. In spite of this online system, that beats transparency breaches, Jones talks of Southeast Asia and their means of public procurement, where he mentions limited source bidding and only certain companies that are relevant in their categories are invited to bid for government contracts due to their proven abilities. The limited bidding concept is one that is open to abuse by use of bribes or promises to officials to include certain companies that fail in the qualities required for a bidding process to take part, where suppliers and officials collude to defraud the government.6 Jones’ report on lack of transparency in public procurement highlights the possibility of misappropriations of government resources and already procured materials for personal use by government officials. As such, he cites officials’ procuring their own items together with the government’s in order to get a lower price or deal in acquiring personal assets under the wing of government agencies. Another form in which transparency is identified to be breached is through bribery, which is similar to that mentioned earlier, only that in this case, bribery only occurs between and amongst corporations vying for contracts. This form of collusions involves only suppliers of services and products where they pay off one another so that they do not bid for public procurement contracts. Jones says that this breach in transparency involves providing an excessively high price in a tender so that other companies can withdraw from bidding, whilst the same is done by paying other companies to quote high prices in the tenders.7 This just shows how many ways can be used to violate transparency in public procurement without necessarily involving government agencies and their officials, but only amongst the competitors for government projects. In order to counter such events other researches and studies such as one by Gilman Stuart suggests a full disclosure system that is real and that the investor gets to have all the information there is to know about a company.8 Applying this to public procurement requires effective knowledge of facts that are made known to government agencies under full public disclosure, and be done in every form of communication to ensure that there is enough access to the information. It is this recommendation that brings us back to the concept applied in E-governance in Korea, where all companies must be registered and offer their information. This way, there is no room for corruption as there is public oversight into some of the challenges facing public procurement. However, Gilman continues to say that transparency, even if achieved, it is not an end in itself, but rather a means to end of corruption, and that can be used maintain integrity in government agencies. Other reports also cite transparency as tool to accountability as seen in the case of India, where tendering has been made more transparent, but not entirely online, though it borrows some of Koreas principles in procurement by improving efficiency and accountability of public funds.9 In almost every method of overcoming transparency breaches and promoting transparency in public procurement, there is extensive mention and use of technology to open up procurement processes for public scrutiny. As such, “Transparency in government” looks at how information technology can be applied in ensuring that government systems of information communicate data to those that need it and those that scrutinize it. The research portrays the benefits of transparency in public procurement as stability and confidence in governing systems, where it cites the need for a central hub to disseminate government information to potential bidders that require the information for business. This way, he states that transparency is increased and extended thus facilitating request for information and supply of it, as well as its utilization. Other than that, "10 WAYS EVERY STATE Can Optimize Procurement” states that centralization of contract management oversights can be used to ensure transparency through efficiency in contracting support, as well as eliminating redundancies, where every institution bids for its own supplies ("10 WAYS EVERY STATE Can Optimize Procurement." 16). This cuts a niche for transparency to thrive by avoiding replication of tenders and bids, which are difficult to track, and are open to abuse through public integrity systems. Consequently, transparency can be fostered with compulsory standard forms as stated by “Public Procurement”, where all contract notices must be published in a central place such as EU’s Official Journal.10 Altogether, transparency becomes a huge deal in public procurement due to all the technicalities and challenges faced by public procurement such as bribery and corruption however, there are mention of distinct ways through which challenges can be overcome and transparency promoted, while at the same time looking at the consequences of low transparency and its presence. References Tabish, S. Z. S. and Kumar Neeraj Jha. "Analyses And Evaluation Of Irregularities In Public Procurement In India." Construction Management & Economics 29.3 (2011): 261-274. "Korea E-Government Best Practices." Journal Of E-Governance 34.4 (2011): 187-190. Jones, David S. "Curbing Corruption In Government Procurement In Southeast Asia: Challenges And Constraints." Asian Journal Of Political Science 17.2 (2009): 145-172. Gilman, Stuart C. "THE ILLUSION OF TRANSPARENCY: The Use And Abuse Of Government Integrity Systems." PA Times 36.1 (2013): 25-30. Singh, Nirvikar. "Expenditure Governance And IT: Assessing Indias Situation And Potential." India Review 9.2 (2010): 107-139. "Transparency In Government." Government Procurement 18.4 (2010): 12-13. "10 WAYS EVERY STATE Can Optimize Procurement." Government Procurement 13.3 (2005): 16-17. "Public Procurement." Business Europe 41.19 (2001): 10. Kaspar, Lee and Puddephatt, Andrew. “Public Procurement for SMEs”. Global Partners and Associates. 2012. < http://www.global-partners.co.uk/wp-content/uploads/Benefits-of-transparency-in-PP-for-SMEs.pdf> accessed 25 May 2013 “Our Organisation”. Transparency International. 2012. accessed 25 May 2013 Read More