PREVENTION OF CORRUPTION IN PUBLIC PROCUREMENT

Đinita Fočo

Corruption in Public Procurement

• Linkages with political corruption, and a direct link with high political circles;

• Conflict of interest as one of the potential risks;• Bribery and extortion forms that occur at lower levels of decision-making;

• The impact of the legal framework on corruption;

What is political corruption?

• When  political influence is used in order to achieve tangible benefits through public procurement;

• Available to the highest political levels in all countries;

• Related to the "big" investment projects (big deal)

Conflict of interest as a form of corruption in public procurement

• When there is a possibility that the civil servant puts his private interests over the public interest;

• Members of the supervisory and management boards, which can have a direct financial benefit from the contracts awarded to the company which holds shares or is one of the owners, or any of the immediate family members of the owner or co-owner of the company

Bribery and Extortion• As the potential for lower forms of "control" structures within the contracting authority;

• Advance is given or asking the "gift" in order to set up a contract;

• Establishing contacts with companies in order to create a "good" relationship

Where is the corruption in public procurement

• Technical specifications, as part of the tender documentation;

• Failure to comply with the basic principles of public procurement (transparency, equal treatment of all bidders, non-discrimination);

• Application of exemptions when there are no assumptions for the same;

• The realization of the contract

The technical specification

• One of the most critical points of corruption in public procurement;

• Technical specifications that "favors" a single supplier;

• Eliminating those bidders who offer equivalent, although equivalent corresponds in all essential requirements for the purchased item

Failure to comply with the basic principles

• Transparency - implement the negotiated procedure without publication although the conditions are  not fulfilled ;

• Not advertised procurement notice or notice contract award;

• Relied on a lot of reasons not to implement a transparent procurement procedure

Equal treatment of all bidders

• Leaking information from the contracting authority to one bidder;

• Setting the qualifying conditions adapted to one bidder;

• Not enough time to prepare for all potential bidders bid on a competitive basis;

Nondiscrimination of bidder• Favoritism that goes at the expense of the most efficient use of public funds;

• The problem is more pronounced in countries in transition;

• Ignorance of the market as a result of a discriminatory attitude to potential bidders;

The application of exemption• Bad practice to avoid the procedure and the contract awarded top favorite;

• Buying a building that has not even begun to build;

• State secret for something that is not a state secret;

• Special security measures as such are not required by any applicable law or regulation, etc.

The realization of the contract• The second most critical point for corruption;• PPL is not defined but is directly related to the elements of

the best offer;• The bid price increased,during the first delivery;• Payment period 1000 days, and the contract paid the day

after the signing;• Unrealistically short period of performance because the

technological process of execution of the contract requires much longer periods.

How to detect that it was a corruption

• The question for one million Euros;• The most difficult crime to prove;• Use a lot of circumstantial evidence-testing of rich overnight, money flows between the participants in the public procurement procedure, to a detailed analysis of all the processes that preceded the procurement and implementation of the contract

What to do?• Education of all the institutions that are in the chain of investigation and proof of the offense;

• More stringent and precise definition of conflict of interest in public procurement;

• Minimizing political influence in the award of contracts;

• At work of public procurement place persons of high moral and professional qualities.

How to reach the goal• Sanctioning of perpetrators;• Education of all segments that are directly or indirectly

involved in the procurement;• Professionalization of the profession and inclusion of the

professionals in research and evidence of corruption offenses;

• The introduction Public Procurement Officer-its role and importance

How to the goal

• Monitoring and application of the basic principles of public procurement;

• The introduction of electronic procurement, either integrated process, it segment by segment (e-auction);

• Strengthening internal audit and principles "4 eyes";• Professional preparation of technical specifications;• Awareness and morale of individuals can not be defined

by the AI ;• It's cheaper for the company prevent corruption than to

take costly litigation.

THANKS FOR YOUR ATTENTION!

ĐINITA FOČO