Are procurement professionals really at the root of corrupt practices?


corrupt.jpgThe details of procurement scandals are frequently published. Numerous investigations, reports and articles have described purchasing agreements that suffer under corruption and fraud. But, very seldom does one read about corruption and bribes in sales and marketing (the main counterparts of the procurement profession).

Without defending the procurement or supply chain profession, does it not take two to tango?

We risk alienating the procurement profession, especially public sector procurement, if we fail to address the root cause of corruption or bribery in whatever form, regardless of whichever profession is under scrutiny, argues Jim Makuwa, Procurement Programme Co-ordinator at Commerce Edge Academy.

Corruption (cheating, collusion, bribery, bid rigging, etc.) is the abuse of public resources or misconduct for private gain. The motivation behind it is self-gain, which drives people into a folly that blinds them from wrong or right.

Importantly, this has nothing to do with the profession one belongs to. Rather, it is determined by individual character and integrity. Your profession gives you only leverage: the power to give or withdraw rewards.

The more we talk of the procurement field as a delinquent profession, and continue to turn a blind eye to actions of other functions, the more we conceal the real issues that cause this cancer and enable perpetrators to feel safe about this scourge, says Makuwa.

JimMakuwa.jpg“There are as many corrupt people in other fields as there are in procurement.”

Corruption thrives where temptation co-exists with permissiveness

Organisational setups and the nature of most public procurement exposes most procurement personnel to so-called ‘tender-preneurs’ who go to great lengths in their quest for self-enrichment.

Consider a transactional procurement setup that is manned by lowly paid procurement staff charged with the responsibility of transacting multi-million dollar contracts. To this mix add displays of prosperity from successful suppliers. The means of one party to give rewards enables it to influence the other party.

Procurement staff should act professionally, responsibly, with integrity and must avoid being caught up in such deceit. Organisations, on the other hand, should create an environment in which employees will think twice about whether it is worthwhile to lose their status over a shoddy deal: reward employees tasked with making a multitude of financial decisions, build their self-esteem through recognising their efforts and be equitable with organisational or functional status.

Corruption thrives where institutional checks on power are missing

Corporate governance and ethical issues lag behind in the public sector more so than in the private sector owed to a lack of sense of ownership. For-the-government syndrome attracts scrupulous and mischievous people.

Therefore, it is imperative that public sector procurement avails institutional checks and balances to ensure that they are dealing with ethical companies. If there is a need, let companies sign a document of oath that they will deal fairly and transparently with a public entity. Whistle blower initiatives should be promoted and cases of misconduct dealt with swiftly and decisively.

Suppliers should be banned and blacklisted from participating in any future public sector procurement activities and accomplices should be identified, penalised and banned from the procurement profession.

[Public sector procurement practitioners are required to check bidders against the ‘Register for Tender Defaulters’. The ‘Database of Restricted Suppliers’ is also available. However, public sector procurement practitioners seem to not routinely check bidders against these databases, noted the Public Affairs Research Institute in its report “How the state buys: public procurement in South Africa – 2014” – Ed]

Corruption thrives where decision making remains obscure

Suppliers can take advantage of structures where decision making is obscure to further their own ends. Furthermore, bold and cunning individuals will make decisions on behalf of the authorised incumbents. When this happens, a gap is opened to a functional abuse of power for self-enrichment – fortune, the saying goes, favours the brave.

Therefore, state clearly the delegated authority for decisions.

Give to individuals installed in public procurement offices the commensurate authority to swiftly deal with issues. Complacency breeds chaos and the longer the decision making process the more risky it becomes for organisations: culprits may have enough time to connive and circumvent the ethical procurement processes for self-gain.

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