Good governance in procurement, Part 2

Procurement is a dynamic and specialized field where despite years of precedents and experience new and challenging issues still arise from time to time. These issues can even ripen into controversies if not rightfully resolved.

The officers in charge of procurement also have to contend with several factors. First, they would have to operate within strict procurement guidelines, which were designed to deter frauds and irregularities but which at times may seem to work against efficiency. Too many restrictions may also lead to a point of absurdity. I recall a foreign procurement expert who narrated that they scuttled a draft model procurement law because its provisions were so rigorous that they would not even be able to procure a pencil with it!

Then, there are always risks of criticisms, complaints and even anti-graft cases from disgruntled parties. Add to these the possible disallowances from overzealous auditors who are ready to pounce upon any slight misstep that may have occurred along the way. These disallowances can be so frightening because they threaten forfeiture of the retirement benefits which one worked so hard for during his or her career.

Yet, procurement is a mandate that has to be performed. An entity cannot operate without premises, equipment, utilities, transport and everything else, down to the last coupon bond and paper clip, which are all provided through procurement. And necessarily, officers and staff have to be designated to perform the job. These people have to survive and overcome the risks attendant to procurement, and good governance can be of good help.

In my previous column (30 August 2018), I stressed the importance of good governance in procurement and I discussed four (4) principles, namely, consistent oversight on both small and big ticket items, efficient price discovery, check and balance in formulating specifications, and transparency in the process. Perhaps I can add a few more principles I derived from actual experience.

I then observed a no-contact policy, meaning, I declined to meet with any bidder, their friends and agents, except during bidding sessions where all the other parties are present and where minutes of the discussions are recorded. I politely declined all invitations because any report on any private meeting with any bidder shall be immediately subject to suspicion. I think such stance had largely contributed to an image of fairness, and of equal opportunity for all bidders.

I also fostered regular team building sessions among my staff. Procurement was always a group effort where we analyzed and studied how each procurement can be successful and yet be compliant with all the requirements. Any item was not left to the realm of a single individual as there were always others who were abreast of the process. In a way also, these are deterrents to corruption.

Lastly, we detached the procurement group from the payment process. Once the award is made, there is no participation from this group anymore. Once the winning bidder effects delivery and the end-user accepts the same, the comptrollership group, which is neither involved in procurement nor acceptance, just credits the bank account of the supplier. The supplier does not even have to follow up the signing and release of its check.

The above comments are the personal views of the writer. His email address is jzuniga@bsp.gov.ph