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Essential Considerations For Public Procurement

Public Procurement is the acquisition of goods and services under a contract by the government using public funds. The government is, therefore, responsible for ensuring that procurement policies, regulations, and processes for all purchases adhere to high standards of code, conduct, and quality. This ensures accountability of the public funds, safeguards the interest of the public, allows public procurement to withstand public scrutiny, and increases the public confidence in the government. This article discusses the key guiding principles that must be taken into consideration when establishing the policy framework for public procurement and conducting procurement processes. Some of these principles include transparency, integrity, openness, fairness, and value for money.

Operating with Integrity

The integrity of procurement practitioners and the procurement system are critical fundamentals of public procurement. Procurement practitioners are the primary drivers of the integrity of the procurement system. At every stage of the procurement cycle, the ability to make decisions and act in the public interest rather than personal interest eliminates the risk of fraud, possible collusion, and preferential treatment for familiar suppliers. Equipping procurement practitioners with professional procurement knowledge, skills, and integrity guidelines can help them to uphold their integrity when carrying out their duties. In addition, procurement policies and practices that aim to strengthen transparency, encourage stakeholder participation and ensure oversight, and control during the pre-tendering, tendering, contracting, and payment stages can help maintain the integrity of the procurement system. Collaborative sourcing tools, spend visibility tools, and procure-to-pay systems, are examples of digital technologies that can also be used to facilitate these practices. Last but not least, suppliers who play a key role in the procurement process can do their part to act with integrity by adhering to the code of conduct, which includes no bribery and unethical acts at any stage of the procurement cycle.

Openness and Transparency in the Procurement Process

Given the usage of public funds, a transparent procurement system that is easily accessible to the public is required at all stages of the procurement process. At the invitation to tender stage, an online procurement platform can provide the public with free access to all solicitation documents, including the tender notice, instructions to tenderers, specifications, price schedule, evaluation criteria, terms and conditions, and corrigendum. A tender briefing may be held in the presence of all suppliers for any clarifications. Suppliers will be notified of the outcome via the online procurement platform, whether they have been awarded the contract. Information such as the description of the work, name, and address of the successful supplier, the contract date, the contract value, and the reasons for the award will be made available to the public. These practices ensure that all suppliers have a level playing field throughout the procurement process, which encourages them to provide high-quality goods and services at a competitive price.

Assuring Fairness in Evaluation Process

Fairness during the tender evaluation stage can be ensured by demonstrating unbiasedness in decision-making and actions. This begins with the formation of an evaluation committee, which includes an independent person, procurement officers, and users. The committee must not have a conflict of interest with any of the suppliers participating in the tender to ensure that no supplier receives preferential treatment throughout the evaluation process. Good procurement practices such as rejecting bids submitted after the closing deadline, evaluating bids according to the published specifications and evaluation criteria, prohibiting the alteration of bids after the closing, and awarding to the supplier who meets the financial and technical requirements should be implemented.

Achieving Value for Money in Purchases

Public procurement emphasizes the importance of making purchases that are valued for money, i.e. achieving the optimum balance between the whole of life cost and quality. In plain terms, this means procuring from sources that best meet the requirement, at the best price rather than at the lowest cost and with low-quality goods and services. To achieve the goal of value for money, efforts should focus on preventing waste, fraud, and abuse of public resources, fostering competition among suppliers, and encouraging innovative solutions. Practices such as avoiding over-specifying unnecessary requirements and including non-price evaluation criteria in addition to price could be taken into consideration. These non-price criteria could include things like product quality, supplier’s financial and technical competence, track records, and so on, and they can be weighted significantly relative to price when formulating the evaluation criteria.

Fostering a Close Partnership with Suppliers

Effective management of supplier relationships is critical to the success of public procurement, particularly during the contract management stage.

This includes the following:

  1. Prior to the start of a contract, an agreement should be reached with the supplier regarding the expectations, roles, responsibilities, and consequences for non-compliance.
  2. Open communication should be maintained with the suppliers to provide them with regular feedback and suggestions for improvement.
  3. Project progress should be closely monitored and the supplier’s performance should be measured against the agreed-upon deliverables. 

Implementing these practices will lead to increased efficiency in the collaboration as well as constant improvement in the products and services delivered by suppliers. This is in line with the government’s goal of ensuring value for money procurement while helping suppliers in sustaining their business in an ever-changing world.


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References

Ben Ng Boon Hee, DPSM. (2018). Key Strategies to Enhance Supplier Relationship. SIPMM Publications. Available at SIPMM: https://publication.sipmm.edu.sg/key-strategies-enhance-supplier-relationship/ (Accessed: 6 June 2022).

Doreen Chow Fong Meng, DPSM. (2019). Crucial Strategies to Prevent Procurement Fraud. SIPMM Publications. Available at SIPMM: https://publication.sipmm.edu.sg/crucial-strategies-prevent-procurement-fraud/ (Accessed: 6 June 2022).

Margaret Gilbert. (2017). Procurement & Ethics Fraud. Available at: https://procurementandsupply.com/2017/02/procurement-ethics-fraud/ (Accessed: 6 June 2022).

OECD. (2015). OECD Recommendation of the Council on Public Procurement. Available at: https://www.oecd.org/gov/public-procurement/OECD-Recommendation-on-Public-Procurement.pdf (Downloaded: 6 June 2022).

Tina Wong Woan Chuen, DPSM. (2019). Five Essential Criteria for a Successful Procurement Contract. SIPMM Publications. Available at SIPMM: https://publication.sipmm.edu.sg/five-essential-criteria-successful-procurement-contract/ (Accessed: 6 June 2022).

Low Hui Shan, SDPP
Low Hui Shan, SDPP
Low Hui Shan has substantive procurement experiences in the science sector, and specifically in laboratory testing. She holds a Bachelor of Science degree in Chemistry from the National University of Singapore. Hui Shan is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). She completed the Specialist Diploma in Public Procurement (SDPP) in June 2022 at SIPMM Institute.
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