Tool

Procurement guidelines

Setup of internal guidelines and adherence to public procurement regulations.

DESCRIPTION

Provisions of international anti-corruption conventions, like the United Nations Convention against Corruption, regional agreements and the OECD Anti-Bribery Convention, together with other international guidelines based on best practices, set the general parameters for shaping national legislation on procurement.1 National legislation then sets the rules, standards and procedures for the public procurement process of acquiring goods and services to which public water utilities and public institutions are bound.2,3 If there is no national public procurement regulation in place, utilities and public institutions should set up their own procurement guidelines.

PURPOSE & LINK TO INTEGRITY

Procurement processes are particularly vulnerable to unethical conduct. Procurement departments have to make decisions on large sums of money, which invites bribery, fraud, facilitation payments, collusion, and general mismanagement of public funds.1,3,4 Setting up and complying with clear and transparent procurement policies not only ensures healthy competition between bidders, it also forces bidders to comply to the set standards if they want to be awarded.5,6,7

KEY REQUIREMENTS

  • Do your organization’s procurement activities fall under any procurement legislation?
  • Is your staff aware of and trained on these regulations? (See also the tool Procurement training)
  • Do you have compliance management structures and processes in place? (See also the tool Compliance management)

HOW TO

If your organization is bound to existing legislation on procurement, and this legislation sufficiently covers integrity risks in procurement, you should check the tool Compliance management. This will give you guidance on how to comply with laws and regulations, including public procurement legislation. If no such legislation is in place or it is insufficiently formulated, you should set up your own procurement guidelines. The following paragraphs provide guidance.

According to the Business Anti-Corruption Portal, transparent and effective procurement processes can be characterized by three major underlying principles:

  • Fairness: All competent bidders should have equal chances to participate.
  • Transparency: All procedural steps are based on open, predictable, known, and written procedures, including the process and criteria used for awarding the contract, to ensure that all participating bidders are treated on equal terms.
  • Recourse possibilities: A transparent procurement process should also allow for an open and independent contestation mechanism.

According to the U4 thematic page on procurement, there is broad agreement about the major features of a competitive process that should be covered to some extent by any compliance checklist. These include:8

  • Public notification of bidding opportunities
  • Documentation of the needs for goods and services, specifications, technical requirements, etc.
  • Documents clearly outlining the contracting process, terms and conditions, and criteria for awarding the contract
  • Submission of secret sealed bids that are publicly opened at a specified date, time, and place
  • Impartial evaluation and comparison of bids by competent evaluators without interference by bidders or other parties
  • Award of the contract to the bidder complying with all requirements and offering the best value for money, as defined by the published selection criteria
  • Documentation of the contract award decision and notification of the unsuccessful bidders with the grounds for decisions and relevant information about the tender
  • Effective supervision of contract implementation.

You might also consider getting ISO certification. The International Organization for Standardization (ISO) is a worldwide federation of national standards bodies. The following ISO standard is applicable for this tool:

ISO 10845-1:2010 Construction procurement — Part 1: Processes, methods and procedures (http://www.iso.org/iso/home/store/catalogue_tc/catalogue_detail.htm?csnumber=46190): ISO 10845-1:2010 describes processes, methods, and procedures for the establishment within an organization of a procurement system that is fair, equitable, transparent, competitive, and cost-effective.

KEY GUIDING DOCUMENTS

TI, 2010, Corruption and public procurement, Transparency International (TI), Germany

UNOPS, 2012, Transparency and public procurement, United Nations Office for Project Services (UNOPS), USA

Chêne, M., 2010, Examples of procurement compliance checklists, U4 Expert Answer, U4 Anti-Corruption Resource Centre, http://www.transparency.org/files/content/corruptionqas/236_Examples_of_procurement_compliance_checklists.pdf, accessed 26.10.2015

TARGETED EXAMPLES

The Public Procurement and Disposal Act (PPDA) 2005 in Kenya5

Target group: Utilities, Public institutions

Location: Kenya

The regulations provided by PPDA 2005 relate to the following points:5

  • The bodies involved in the regulation of public procurement
  • The internal organization of public entities relating to procurement
  • General procurement rules
  • Open tendering
  • Alternative procurement procedures
  • The administrative review of procurement proceedings
  • Authority powers to ensure compliance
  • The debarment from participating in procurement proceedings
  • The disposal of stores and equipment.

FURTHER  READINGS

WiseGEEK , 2012, What is procurement policy?, WiseGEEK, http://www.wisegeek.com/what-is-procurement-policy.htm, accessed 19.11.2015

Nordmann, D., Peters, P., and Werchota, R., 2013, Good Governance in the Kenyan Water Sector, Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, Germany

National Council for Law Reporting, 2010, The Public Procurement and Disposal Act, Chapter 412C, National Council for Law Reporting, Kenya

Government of the Republic of Sierra Leone, 2006, Public procurement manual, Government of the Republic of Sierra Leone

WASREB, 2010, Service Provision Agreement, Water Services Regulatory Board (WASREB), Kenya

U4, 2009, Good practice in addressing corruption in water resource management projects, U4 Anti-Corruption Resource Centre (U4), Norway

KACC, PPOA, 2009, Corruption prevention guidelines in public procurement, Kenya Anti-Corruption Commission (KACC) and Public Procurement Oversight Authority (PPOA), Kenya

Minister for Finance, 2006, The Public Procurement and Disposal Act, 2005 Legislative Supplement No. 53, Minister for Finance, Kenya

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,

OECD, 2008, Enhancing Integrity in Public Procurement. A Checklist, Organisation for Economic Cooperation and Development (OECD), France

Ochieng, J. and Muehle, M., no year, Development and reform of the Kenyan public procurement system, Kenya

FULL REFERENCES

  1. TI, 2010, Corruption and public procurement, Transparency International (TI), Germany
  2. UNOPS, 2012, Transparency and public procurement, United Nations Office for Project Services (UNOPS), USA
  3. WiseGEEK , 2012, What is procurement policy?, WiseGEEK, http://www.wisegeek.com/what-is-procurement-policy.htm, accessed 19.11.2015
  4. Nordmann, D., Peters, P., and Werchota, R., 2013, Good Governance in the Kenyan Water Sector, Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, Germany
  5. National Council for Law Reporting, 2010, The Public Procurement and Disposal Act, Chapter 412C, National Council for Law Reporting, Kenya
  6. Government of the Republic of Sierra Leone, 2006, Public procurement manual, Government of the Republic of Sierra Leone
  7. WASREB, 2010, Service Provision Agreement, Water Services Regulatory Board (WASREB), Kenya
  8. Chêne, M., 2010, Examples of procurement compliance checklists, U4 Expert Answer, U4 Anti-Corruption Resource Centre, http://www.transparency.org/files/content/corruptionqas/236_Examples_of_procurement_compliance_checklists.pdf, accessed 26.10.2015
Last updated 10 October 2017

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