Transparency in Procurement

What is it

Transparency may be defined as timely and ready access to information in the procurement process, creating an environment of fairness and honesty. Transparency also implies openness, communication, and accountability.  

Public procurement must be transparent in its practices, processes and relationships with all stakeholders, while ensuring protection of confidential information. Standardisation of processes, simplified access to information and availability of required information, all strengthen public trust and make the government a more appealing customer to suppliers.

A transparent and informative public procurement process encourages confidence through the free and open exchange of information, enhanced knowledge, improved efficiency, and reduction of the potential for corruption and waste. The more practical benefits of transparency are increased competition and better value for goods, services, and construction.

Transparency assists in ensuring that any deviations from fair and equal treatment are detected early, and makes such deviations less likely to occur. It protects the integrity of the procurement process and the interests of the organisation and stakeholders.

Use of technology to achieve transparency

The ease of public access to government procurement data depends on the use of technology and suitable IT systems should be incorporated into the procurement process to enhance transparency. This will include such steps as:

• establish a web-based reporting tool for procuring entity data that includes annual procurement plans, current bid opportunities, bid results, current contracts and RFQ/RFP schedules;
• publicise terms of use on the government procurement site to discourage fraud and misuse of information;
• publish details of complaints and appeals procedures, in case of need;
• publicise a code of ethics on the government procurement site to which all bidders must commit;

Access to information  

Procurement should provide access to reliable information about the activities of the procuring entity. This is a key safeguard against corruption and also facilitates the improvement of competition and the relationships between procurement and its stakeholders. Some key steps in this process are:  

• providing stakeholders and the public access to current, up-to-date information about procurement processes, procedures and policies and to proposed changes in these;
• providing all bidders and the public with easy and timely access to information about:
• tender opportunities
• selection/evaluation criteria
• the evaluation process
• rules governing the award
• the award decision and publication
• terms and conditions of the contract
• contract administration
• dispute-settlement procedures
• providing equivalent information for all procurement transactions and contracts to potential bidders;
• limiting confidentiality to legally protected information only[1].

Transparency in supplier relationships   

At all times the procurement function should strengthen relationships with the supplier community through transparent and authorised practices only. This is especially true in public procurement, where the government needs to sustain the trust of both suppliers and the wider public. To support this objective the procurement organisation:

• make regulations, policies, and procedures readily available;
• provide complete, timely, and accurate information with equal access and opportunity to all qualified suppliers;
• ensure that specifications do not limit competition
• maintain open and frequent communication with the supplier community
• provide information for future opportunities for suppliers at regularly held briefing sessions/meetings;
• standardise procurement documents including: bids, quotes, proposals and registration documents to include:
• specific details regarding the procurement method being used
• specifications of the required goods, works or services
• required time frame for bid submissions
• closing date and time for receiving and opening bids

Transparency and the procurement professional  

Procurement professionals must adhere to a code of ethics[2] and declare conflicts of interests as soon as they become apparent and disqualify themselves if there is a conflict or the appearance of a conflict, such as:

• hold a bias or prejudice towards a particular supplier in a tender process;
• have (or appear to have) a direct personal interest in the outcome of a tender process;

Transparency and the procurement organisation  

Procurement organisations must always provide sufficient resources and information to employees in order to achieve a sustainable transparent procurement process. This process may include the following:

• identify and ensure compliance with existing legislation, regulations, and/or international agreements[3] that drive transparency-related requirements for the organisation;
• allocate financial and human resources necessary to establish a systems and procedures solution that supports transparency in procurement.
• developing policies and procedures for staff to declare any outside interests;
• identify roles and responsibilities in the procurement function so that individuals can be held accountable for their actions;
• require disclosure of conflicts of interest from any person involved in the procurement process, including both internal and external staff or consultants.

Benefits  

The existence of transparency and fairness in the procurement system does lead to a number of potential benefits including the strengthening of trust in the procurement organisation and the perception of it as a more attractive customer. This can result in increased competition and better value for goods, services, and construction.

Transparency, through the free and fair exchange of information, may result in improved efficiency, reduction of corruption and waste and increased good will between the procurement organisation and its stakeholders. Transparency in procurement not only protects the integrity of the process but is also a key contributor to accountability and procurement governance.

[1] Transparency International. (2005). Transparency International policy positions #03: TI’s minimum standards for public contracting. Transparency International: Berlin, Germany.

[2] CIPS Code of Conduct - https://www.cips.org/who-we-are/governance/cips-code-of-conduct/

[3] International agreements affecting government procurement include, but are not limited to: the procedures under the plurilateral WTO Agreement on Government Procurement, the UNCITRAL Model Law, World Bank Guidelines, and any other international instrument to which the government is a signatory party (e.g. treaties, trade agreements).