Independent procurement committee
Independent observers and social witnesses on the procurement committee review the organization’s compliance with procurement regulation.
(Semi-)Public water utilities as well as public institutions are bound to public procurement legislation that sets rules and procedures for procurement processes. In some countries these laws mandate the participation of civil society observers in procurement processes. Even if this is not the case, an independent procurement committee can be established.1 The committee consists of independent observers (e.g. international organizations) and social witnesses such as representatives of the local CSOs and/or citizens. This is an additional control mechanism in public procurement, complementary to already existing internal tools, such as Procurement guidelines or Compliance management.
PURPOSE & LINK TO INTEGRITY
Independent procurement committees are part of an efficient and effective management of public resources. The purpose of these committees is, among other things, to review an organization’s procurement policies and practices and to ensure that these are in line with relevant laws as well as recognized good practices.1 Through reducing the risk of illicit practices, market competition is enhanced and prices paid by the project owner are at a competitive level. This has a direct impact on public expenditures and therefore on taxpayers’ resources.2
- Does your organization have clarity on who it is accountable to and who will be granted access to the procurement committee?
- Does your organization have clear procurement rules that are implemented and known by staff? (See also the tool Procurement guidelines)
The procurement committee could be composed of:
- An official delegated by the head of the procuring entity or the accounting officer (chairperson of the committee)
- The finance officer or an officer carrying out related functions
- Three other members appointed by the head, such as independent observers and representatives of the civil society.
Clear rules and regulations should be drafted to define the responsibilities and procedures of the procurement committee. They may have the following principal recurring functions in carrying out their responsibilities:1
- Review the organization’s procurement practices and assess their accordance with the national public procurement regulations.
- Ensure that the operating policies and procedures relating to procurement are recognized as ‘best practice’.
- Ensure that all tenders are conducted in a fair and ethical manner.
- Ensure that no conflict of interest exists with any director or executive connected to the procurement process.
- Declare the procurement process flawed if it subsequently discovers any undeclared conflict of interest, and then ensure that the process is repeated in a fair and ethical manner.
- Ensure that all bidders have the financial and operating capability to deliver under the terms of the tender or contract.
- Periodically review the Limits of Authority that govern the financial limits under which management can commit the company without the further approval of (a) the chairperson, (b) the committee, and (c) the board.
- Liaise with the internal audit department and the independent auditors in the event that the committee suspects or discovers evidence that there has been wrongdoing in any procurement process.
National laws and regulations may limit the mandate of an independent procurement committee.
KEY GUIDING DOCUMENTS
Starcomms PLC , 2007, Tendering and Procurement Committee Charter, Starcomms PLC, UK
OECD, 2008, Enhancing Integrity in Public Procurement. A Checklist, Organisation for Economic Cooperation and Development (OECD), France
KACC, PPOA, 2009, Corruption prevention guidelines in public procurement, Kenya Anti-Corruption Commission (KACC) and Public Procurement Oversight Authority (PPOA), Kenya
OECD, 2009, OECD Principles for Integrity in Public Procurement, Organisation for Economic Cooperation and Development (OECD), France
Ministry of Finance, no year, Directorate of Public Procurement, Ministry of Finance,
http://www.treasury.go.ke/index.php/departments/directorate-of-public-procurement , accessed April 2013
TI, 2006, Curbing corruption in public procurement, Transparency International (TI), Germany
TI, 2010, Corruption and public procurement, Transparency International (TI), Germany
UNOPS, 2012, Transparency and public procurement, 2012, United Nations Office for Project Services (UNOPS), USA
- Starcomms PLC , 2007, Tendering and Procurement Committee Charter, Starcomms PLC, UK
- OECD, 2008, Enhancing Integrity in Public Procurement. A Checklist, Organisation for Economic Cooperation and Development (OECD), France