The Different Forms of Corruption Affecting Procurement Processes

Public procurement is the acquisition by a government department or any government-owned institution of goods or services. The process of procurement is based on principles of fair competition and transparency. This process also affords governments an opportunity to contract the most responsive service provider to the specifications of the procurement.

The World Bank summarizes two broad categories of corruption that have stifled the process of procurement herein which are,

  • State capture; which is defined as the actions by individuals, groups, or organizations to influence public policy formation by illegally transferring private benefits to public officials. Public procurement corruption can be found in the nature of “state capture,” for example, involving attempts by private firms to influence the broader project appraisal, design, and budgeting process by making illicit campaign contributions
  •  Administrative corruption; this the use of bribes by the same actors to interfere with the proper implementation of laws, rules, and regulations as per Elizabeth Anderson in her book Municipal ‘Best Practices’: Preventing Fraud, Bribery and Corruption”. Administrative corruption” includes a bidder’s attempt to bribe an administrative decision maker in order to secure a lucrative public procurement contract.

The different forms of corruption affecting processes can be further explained to include the following;

1. Elimination or reduction of competition in order to benefit a Single tender in that only one organization is invited to bid. This is also done by discouraging other bidders from competing by bribing them off. Another way is by bid rigging and manipulation of the procurement process by Collusion between suppliers and/or between staff in the procuring organization and suppliers.

2. Biased Supplier Selection by offering Insider information that favors the preferred supplier to position their bid successfully by giving them information other bidders do not have.

3. Corrupt Contract Negotiation and Management. This is by agreeing to contractual arrangements that are not truly competitive or in the contracting authority’s interest; or ignoring contract terms in a manner that favors the supplier.

4. Over Payment or False Payment this includes invoicing for more than the actual amount provided, or for goods or services that were not provided at all. Over-charging – invoicing at prices higher than agreed in the contract. 

The procurement process was designed to avoid corruption and have a systematic itinerary of how government can easily follow up the different monies going out of the treasury. However, it can be argued that over and above the aforementioned, abuse of power, conflict of interest and process manipulation also play a critical role in perpetrating procurement corruption.

Courtesy photo.