Public Procurement: Where the Public and Private Sectors Do Business

Mention the subject of corruption in government and most people will immediately think of bribes paid or received for the award of contracts for goods or services, or – to use the technical term – procurement.[note]For details, see General Agreement on Tariffs and Trade (GATT). Agreement on Government Procurement, 1988; United Nations Commission on International Trade Law (UNCITRAL); Model Law on Procurement of Goods, Construction and Services, 1994; World Bank Guidelines for Procurement Under IBRD Loans and IDA Credits, 1995; Official Journal of the European Communities, Procurement Directives; and International Trade Centre UNCTAD/GATT, Improving Public Procurement Systems, 1993.[/note]

Few activities create greater temptations or offer more opportunities for corruption than public sector procurement. Every level of government and every kind of government organisation purchases goods and services, often in quantities and monetary amounts that defy comprehension. Whether this is really the most common form of public corruption may be questionable but without doubt it is alarmingly widespread and almost certainly the most publicised. Hardly a day goes by without the revelation of another major scandal in public procurement somewhere in the world.

It has been the cause of countless dismissals of senior officials, and even the collapse of entire governments. It is the source of astronomical waste in public expenditure, estimated in some cases to run as high as 30 percent or more of total procurement costs. Regrettably, however, it is more talked about than acted upon.

To the non-specialist, the procurement procedures appear complicated, even mystifying. They are often manipulated in a variety of ways, and without great risk of detection. Some would-be corrupters, on either side of transactions, often find ready and willing collaborators. Special care is needed, as the people doing the buying (either those carrying out the procurement process or those approving the decisions) are not concerned about protecting their own money, but are spending “government” money…

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