Implementation – Tendering & Procurement
16.5 What are the rules of fair procurement?
Procurement and tendering should be conducted in a fair, open
and transparent manner. The most important and broadly accepted
principle underlying a modern procurement system is open competition – unrestricted,
universal access to the procurement market. In addition, the procurement
process – the selection of bidders, tendering procedures
and the award of contracts – should be open to public examination
and review, thus making it a transparent process.
A transparent procurement system ensures that all qualified
suppliers have equal access to all elements of the system,
- methods of procurement;
- evaluation criteria and technical specifications;
- rights and responsibilities of government as a buyer; and
- due process.
To promote transparency, the procurement process should
be made open to public scrutiny. The transparency
of the process is further reinforced when contract awards, and the overall
procurement process itself, is subject to the scrutiny of national
parliaments, external audit bodies and the media.
Procurement should be based on rules guaranteeing fair
and non-discriminatory conditions of competition.
An essential element is procedures by which aggrieved bidders
can challenge procurement decisions and obtain redress if decisions
are made that are inconsistent with the established rules.
One of the mechanisms used to promote fair procurement
is establishing selection panels to evaluate
the proposals. The evaluation stage is most often closed
to the public. Thus, this stage requires the most effort to
ensure that the process is fair, open and transparent. For
this reason, many governments have established a selection
panel to evaluate the proposals that is separate and independent
from the project team and the government.
There are a number of different ways that a selection
panel may be appointed. In all cases, there should
be a close examination of all members of the independent
evaluation panel to ensure that no conflict of interest
will arise. It is unacceptable to include in the panel:
professionals who have assisted the government in the
preparation of RFQ, RFEI or RFP documents; individuals
who will be making the final decision; or individuals
who will be managing or administrating the projects.
Once the municipality has chosen a private sector bid,
and the contract has been signed, the promoter should
publish the names of all the organisations that submitted
bids along the name of the winning organisation.
Firms that were not successful in their bid may request
a debriefing to learn why they did not win. At this
debriefing, each firm may learn the positive and negative
points of its proposal and may learn the main reason
as to why it did not win.
Confidential information – such as companies' overhead costs
and the like – should not be divulged to
competitors or the public.
Finally, the main terms of the
contract must be published (length,
plans for expansions and so on).
Likewise, if the municipality has decided not to engage
the private sector but rather to
restructure the public provider, the main details of the restructuring
plan must be published – such
as plans for expansions, benchmarks and deadlines
for quality and coverage improvements, changes in tariffs and
The procurement systems should
be protected against abuse, fraud
and corruption. Many mechanisms can
help anticipate and resolve these
problems, though there are no “easy solutions”.