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Corruption Risks in Public Procurement: Understanding the Procurement Cycle

A new report has shed light on the complex web of corruption risks that exist throughout the public procurement process. The report highlights the importance of understanding the procurement cycle, which includes three phases: pre-tender, tender, and post-tender.

Understanding Corruption Risks in Public Procurement

Corruption risks exist in every stage of the procurement cycle, from the initial decision-making process to the final contract award and administration. Experts emphasize that corruption can occur at any point during this process.

The Procurement Cycle

The report notes that understanding the procurement cycle is crucial in preventing and detecting corruption. The three phases of the procurement cycle are:

• Pre-Tender Stage
  • Decision-making process
  • Identifying technical requirements
  • Determining what goods or services will be sought from the private sector

Procurement Procedures

The choice of procurement procedure is crucial in determining the number of stages intervening between the decision to buy and the actual purchase. There are different ways of categorizing procurement procedures, including:

• Open Procedure (Sealed Bidding)
  • Formal single-stage process where any interested company can submit a bid
  • Allows for maximum transparency and competition
• Restricted Procedure
  • Pre-selected qualified companies are allowed to submit a bid
  • May be used when the subject matter of the procurement is available only from a limited number of suppliers

Negotiated Procedures

Negotiated procedures, which involve direct negotiations between the procuring entity and potential bidders, can also be susceptible to corruption.

Measures to Combat Corruption in Public Procurement

The report concludes by emphasizing the need for effective procurement procedures that promote transparency, competition, and accountability. Some measures to combat corruption include:

• Article 8 of UNCAC: codes of conduct and asset declarations for public officials
• Article 10: measures to enhance transparency in public administration
• Article 12: limits on post-government employment for public officials
• Private firms should establish compliance systems, including internal codes of conduct and cooperation with investigations

Conclusion

By understanding the procurement cycle and the corruption risks associated with each stage, we can take steps to prevent and detect corruption in public procurement. Effective procurement procedures that promote transparency, competition, and accountability are essential for combating corruption in public procurement.