Module 16: Tendering and 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, including:

– methods of procurement;

– legislation;

– 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 so forth.

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”.

End of Module 16

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