Risks to Integrity in Public Procurement OECD Checklist and Good Practices

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Risks to Integrity in Public ProcurementOECD
Checklist andGood Practices
Elodie Beth Head of Procurement Unit OECD Public
Governance and Territorial Development Directorate
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Why enhancing integrity in public procurement?

A crucial economic activity of governments
13 of GDP A major risk area for
mismanagement, fraud and corruption Reforms
at the international level have focused on
the tendering phase, the tip of the iceberg
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Public procurement A major risk area
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OECD procurement standards and tools

• Recommendation on Enhancing Integrity in Public
  Procurement (2008)
• Recommendation on Fighting Bid-Rigging (2012)
• Recommendation on the Environmental Performance
  of Public Procurement (2002).
• Various tools, including
• Enhancing Integrity at Each Stage of the
  Procurement Cycle a checklist
• Procurement toolbox
• Procurement A to Z.

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Improving integrity in the whole procurement cycle

• OECD Recommendation on Enhancing Integrity in
  Public Procurement
• Good governance approach
• transparency,
• good management,
• prevention of misconduct,
• accountability and control
• Focus on practice, rather than regulations

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OECD Principles Transparency
1. Provide an adequate degree of transparency
throughout the whole procurement cycle in order
to promote fair and equitable treatment for
potential suppliers 2. Maximise transparency in
competitive tendering and take precautionary
measures to enhance integrity, in particular for
exceptions to competitive tendering
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Element of good practice for transparency

• Policy concern Preventing risks of corruption
  and ensuring accountability in the contract
  management
• Practice Publishing a notice on the amendment
  and execution of the contract
• By whom The Public Procurement Council in
  Hungary, an autonomous body reporting to
  Parliament
• Role of private sector actors and civil society
  to monitor contract

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OECD Principles Good management

• 3. Ensure that public funds are used in public
  procurement according to purposes intended
• 4. Ensure that procurement officials meet high
  professional standards of knowledge, skills and
  integrity

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Element of good practice for using public funds

• Policy concern High risks in infrastructure
  projects where lack of budget planning (e.g.
  unplanned events, change of scope of project)?
• Practice Parliamentary inquiry on big
  infrastructure projects in the Netherlands
• Findings of inquiry 9 out of 10 decisions are
  misinformed about costs and benefits (e.g. cost
  overruns, benefits shortfalls)?
• Recommendations of inquiry
• Introduce explicit parliamentary agreement on the
  need for large infrastructure projects
• Increase control on government purchasing and
  spending

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OECD Principles Prevention of misconduct 5.
Put mechanisms in place to prevent risks to
integrity in public procurement 6. Encourage
close co-operation between government and the
private sector to maintain high standards of
integrity, in particular in contract
management 7. Provide specific mechanisms to
monitor procurement as well as to detect
misconduct and apply sanctions
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Element of good practice for prevention of
misconduct

• Policy concern Avoiding conflict of interest and
  corruption
• Practice Introduction of conflict-of-interest
  measures for officials in Spain
• For whom High-level and procurement officials
• Solution developed
• 2006 Law on Conflict of Interest for Members of
  Government and High-ranking officials
• Law for Public Sector Contracts
• Set up of Office of Conflict of Interest (e.g.
  registry)?
• Reinforcement of sanctions (e.g. pension,
  disqualification from public position)?

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OECD Principles Accountability and control
8. Establish a clear chain of responsibility
together with effective control mechanisms 9.
Handle complaints from potential suppliers in a
fair and timely manner 10. Empower civil society
organisations, media and the wider public to
scrutinise public procurement
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OECD methods of assessment and assistance

• Peer reviews the OECD with peers from OECD
  member countries assesses a country system and
  provides a framework to compare experiences and
  examine best practices. Peer review reports
  include assessments and recommendations.
• Joint Learning Studies adaptation of the OECD
  peer review methodology to non OECD members
  focusing on specific topics.
• Knowledge-exchange platforms, such as the
  MENA-OECD Network on Public Procurement.
• Capacity building training, workshops, study
  visits.

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Procurement phase integrity issues
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Integrity risks pre-tendering (1)
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Integrity risks pre-tendering (2)
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Integrity risks - tendering
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Integrity risks post award
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Selected OECD public procurement resources
www.oecd.org/governance/ethics/
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Thank you!For further informationelodie.beth_at_
oecd.org