• Date: May 2015

Every year, a significant amount of money is spent by governments to purchase goods, works and services, also known as public procurement. From building roads and schools to buying office equipment and medical supplies, public money is spent on numerous complex, high-value, and important purchases. Due to the magnitude of financial transactions, this public activity is vulnerable to fraud and corruption. Transparency International approximates costs from corruption to range on a global average 10 to 25 percent and in worst cases as high as 50 percent of a contract’s value.* Hence, corruption in public procurement has a huge negative impact on government spending. Larger procurements are often most vulnerable, as bribes could be frequently demanded and paid as a percentage of a contract’s value. Therefore, it is important to strengthen the public procurement system, ensure proper management of public finances and preserve the integrity of accounting books, records, financial statements and other documents related to public expenditure and revenues through enactment of proactive laws, rules and regulations.

Bhutan signed the United Nation Convention Against Corruption in 2005; and under is article 9(1), it is obliged to take necessary steps to establish appropriate systems of procurement that is based on transparency, competition and objective criteria in decision making.  Moreover, article 8(9) of the Constitution of the Kingdom of Bhutan stipulates that it shall be the duty of every person to uphold justice and to act against corruption. Recognizing the importance of curbing corruption in the country, the government has also adopted the “Zero Tolerance to Corruption” policy.

The Procurement Rules and Regulations (PRR) 2009 (amended in 2014) provide the legal basis for streamlining procurement across the government. However, effective monitoring is even more important in preventing corruption and helping ensure that any corrupt or fraudulent practice is exposed and accordingly penalised. It is also very critical that procuring authorities and bidders adhere to high standards of integrity and abstain from malpractices.

Some measures to prevent corruption based on the core principles of transparency, integrity and accountability include: i) establishing a centralized procurement system, ii) reviewing the public procurement system regularly, iii) use of the Integrity Pact and iv) implementing e-procurement.  In addition, incremental transitioning to sustainable or green public procurement (SPP/GPP) will ensure value for money across the lifecycle. Purchasing greener and more durable goods might seem more expensive initially, but taking of the life cycle cost (production, maintenance, and disposal cost) into consideration will guarantee quality and sustainability. An effective and judicious implementation of SPP/GPP has the potential to foster good governance, which is crucial in rooting out corruption from the system.

 


*Pranav Bhattarai. 2011. Curbing Procurement Corruption. http://archives.myrepublica.com/portal/index.php?action=news_details&new...

 

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