Increasing Integrity and EU Citizen’s Trust in Public Procurement Essay Sample

7 July 2017

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Public procurance systems across the European Union ( EU ) need to be robust. transparent and unfastened to public monitoring. Merely so can authoritiess. bidders and contractors be held to account for how public money is spent. and corruptness can be prevented. Corruption syphons off public financess. obstructs the operation of the individual market. and distorts just competition. For these grounds. it is critical for the EU to guarantee public procurances are sound. transparent and accountable. Public procurance at the EU-level is presently being reviewed ; the inclusion of strong anti-corruption commissariats is a manner of increasing efficiency and making the potency for significant and immediate cost-savings. This is peculiarly pressing given the European sovereign-debt crisis. halt economic activity across the part and national asceticism steps that have made it necessary to do each Euro count. Merely a strong and effectual legal model and rigorous enforcement patterns can vouch such a scenario.

Cost of purchases. investings and services to an unneeded extent. It reduces the quality of the plants or services provided. Worst of all. it finally erodes people’s trust in their leaders and the province. To simplify procurance processs. the European Commission ( EC ) has prioritised revising bing procurement statute law 2. as it has outlined in the AntiFraud Strategy 3 and Single Market Act 4 of 2011. Each of these steps besides presents an chance to extenuate the high hazards of corruptness in EU procurance.

Corruptness in public procurance appears in different signifiers. These include graft. facilitation payments and collusion. struggles of involvement. bid-rigging and trading of influence. Each of these manifestations of corruptness can look throughout the five phases of the procurement rhythm: needs appraisal. readying. contract/supplier choice and contract award. contract executing and concluding accounting and payment. 5 For illustration. at the needs appraisal phase. corruptness. as a consequence of payoffs or struggles of involvement among policy-makers. may take to the blessing of unneeded undertakings. low quality investings or hyperbolic costs. An effectual scheme to forestall or command corruptness throughout the public procurance rhythm will recognize the difference in all stages and will be attentive to ruddy flags as triggers for due diligence and/or disciplinary action. Corruptness in public procurance frequently takes subtler signifiers that are harder to observe and which may non affect public functionaries in the maltreatments. This is apparent in the usage of trusts and collusion among bidders to

Few activities create greater enticements or offer more chances for corruptness than public sector procurance. On norm. the procurance of goods. plants and other services by public organic structures sums to 18 per cent of the national end product of EU member provinces. 1 When procurance procedures are effectual. they allow for an efficient allotment of public monies that supports a country’s economic growing and benefits the day-to-day lives of citizens. Yet corruptness can rapidly sabotage these results. Corruptness increases the


pull strings the award determination in favor of one of the members. Cartel patterns can include informal understandings to delegate “turns” among the members for winning public commands. or they may hold to internal compensation payments for subjecting high or other “failed” commands. 6

Public procurance is one of the countries in the EU where corruptness hazards are highest. harmonizing to an appraisal of anti-corruption systems in 25 European states that was carried out in 2012 by Transparency International ( TI ) . 7 In most European states TI has identified important failings in national legislative models on public procurance that lead to. if non invite. systematic circumvention of the Torahs. Problems appear to be most acute in Bulgaria. the Czech Republic. Italy. Romania and Slovakia. 8 The current alteration of the EU statute law on public procurance 9 nowadayss an chance for European leaders to turn to these dislocations and shut the undermentioned unity spreads. WEAK LEGISLATIVE FRAMEWORKS Legislative loopholes – as in the instance of Romania – allow for the bypassing of procurance regulations and raise the hazard of corruptness. For illustration. the Rumanian authorities has the right to raise a province of exigency. which allows it to negociate contracts with merely one individual company.

Allegations in other states have besides been raised about penchant being given to a individual seller by micro-tailoring the stamp standard to fit merely that company’s profile. 10 Similar jobs of legal spreads exist in the Czech Republic that has permitted corruptness to originate in public procurance. Harmonizing to a study of little and moderate-sized Czech companies. three out of five directors believe that it is impossible to win public contracts without fall backing to bribery. a kickback or some other “incentive” . 11 The procurance loopholes that exist in Europe vary and lead to low degrees of transparence and answerability. including limited entree to information and public engagement in the procedures. Final public procurance contracts are non published in a figure of European states. including Bulgaria. Germany and Italy. Another concern is the ability to renegociate contracts outside of the public’s inadvertence after they

are signed. In Italy 12 and Bulgaria. 13 there is a common pattern of renegociating the extensions to the contracts that can allow a de facto alteration in the stamp conditions. Finally. the general deficiency of whistleblower protection in many states besides means that even when jobs are detected. they are non ever reported. made public or suitably addressed. INEFFICIENT OVERSIGHT BODIES Findings from TI’s survey of National Integrity Systems in Europe show that oversight organic structures are non sufficiently resourced. structured or empowered to efficaciously supervise public procurance. 14 At times the system is fragmented. as in Greece. or is underresourced. as in Estonia. where the inadvertence organic structure for EU structural financess has double the capacity as the inadvertence organic structure for public procurance. In other cases the domestic legal model on procurance deficiencies oversight commissariats. as in the instance of Romania. In Hungary. the State Audit Office has even officially recognised that its monitoring of public procurance is unequal to contend corruptness. 15 Lack of inadvertence maps besides means that jobs such as struggles of involvement between companies offering and the functionaries reexamining them may travel undetected.

In public procurance. thresholds should theoretically advance a more efficient and effectual system. They set a saloon above which tighter regulations and better legal protection are applied to “larger” contracts and under which more limited inadvertence is given to “smaller” contracts that are deserving less. However. the system can be manipulated so that public contracts fall outside of rigorous legal commissariats and public examination. Harmonizing to Czech jurisprudence. a simplified below-thethreshold process applies. In the instance of building contracts. if the value does non transcend CZK 20 million ( approx. ˆ800. 000 ) . the contract does non go through through a more strict inadvertence procedure. As a effect. most building contracts go on to be found merely below this threshold. Often domestic Torahs do non compel the undertaking authorization to publicly denote and describe on contracts falling below the threshold and which have been concluded under more simplified processs. This can take to decreased degrees of transparence and answerability. In Hungary for case. merely 55 per cent of stamps below the threshold were publicly announced. restricting public examination or inadvertence. 16 In Estonia. public contracts are sometimes split up in order to fall below different thresholds and cut down their duties. including the demand to follow more rigorous regulations of public procurance. Fortunately. e-procurement and on-line procurance platforms are assisting to open up information through full public revelation of all relevant paperss ( every bit good as concluding contracts and amendments ) for below – every bit good as above – these thresholds.

PROMOTE AND ENSURE PUBLIC SCRUTINY Public stakeholders. such as involvement groups. civil society and the populace at big. should be given a stronger function in the inadvertence of public procurance processes. 20 It is indispensable that every bit much informations. paperss and information are publicly available from the start of the procedure and commissariats to guarantee citizens’ entree to all relevant information are included. ? INCREASE TRANSPARENCY IN PROCUREMENT PROCESSES To compensate legislative loopholes and to enable public examination. inside informations of concluding contracts and subsequent amendments should be made public. While a balance must be found between transparence and confidentiality this information should be disclosed. including contracts both above and below thresholds. ? PROMOTE THE STRENGTHENING OF LEGAL FRAMEWORKS IN EU MEMBER STATES The EU should press the member provinces to convey their legal commissariats refering graft and corruptness ( including facilitation payments ) in line with the UN Convention against Corruption ( UNCAC ) . which has been ratified by about all member provinces.

? STRENGTHEN PROVISIONS ON CONFLICTS OF INTEREST AND EXEMPTIONS Conflict of involvement and how to cover with it throughout the procurance rhythm demand to be clearly defined in statute law. including clear guidelines on execution. monitoring and countenances. Current proposals are elaborate but there is range to fasten these regulations. 21 Exemptions from thresholds for specific sectors. which lead to cut down examination and inadvertence. should be limited and regulated by rigorous regulations. ? INCLUDE PROVISIONS ON WHISTLEBLOWER PROTECTION To beef up the sensing of corruptness instances in public procurance and to ease the coverage of misdirection and misconduct. the execution of a well-functioning whistleblowing system in all member provinces is indispensable. 22

TI welcomes statements by the EU to make new mechanisms that “would let public governments and their provider to reason transparent. competitory contracts” . 17 Such stairss are needed if corruptness hazards are to be mitigated and for public procurance to be efficient. TI is convinced that an addition in efficiency and value for money of public outgo could heighten economic growing in the old ages to come. TI hence recommends the EU to: ? INTRODUCE E-PROCUREMENT SYSTEMS To accomplish better value for money. the EU should ease robust and comprehensive e-procurement systems and criterions around Europe. which would assist to further entree. competition. nonpartisanship and transparence every bit good as control by civil society. In the purpose of cut downing costs. the national or EU e-procurement online platform could besides be used to print concluding contracts and amendments. ? STRENGTHEN NATIONAL MONITORING SYSTEMS FOR PUBLIC PROCUREMENT Effective national inadvertence organic structures are necessary to undertake the lacks identified in most EU member provinces. including the usage of thresholds. 18 An effectual ‘red flag’ index system 19 should be established. with a common set of standards and methodological analysis to let for cross-country comparings. ? INTRODUCE EU-LEVEL TRACKING SYSTEM OF NATIONAL TENDERS Public procurance databases and statistics should be unified at the EU-level to guarantee


This Regional Policy Paper was produced by Janina Berg ( TI-Liaison Office to the EU ) and Craig Fagan ( TI-Secretariat ) . It is portion of a series published in the model of TI’s European National Integrity Systems survey conducted in 25 European states with fiscal support from the Prevention of and Fight against Crime Programme of the European Commission Directorate-General for Home Affairs. Norway Grants/EEA Grants and Svenska PostkodStiftelsen. This publication reflects the positions merely of the writer. and none of the aforesaid givers can be held responsible for any usage which may be made of the information contained therein. For more information on the surveies. visit: World Wide Web. transparence. org/whatwedo/activity/european_national_integrity_systems_project © 2012 Transparency International. All rights reserved.


See Transparency International. Money. Politics. Power ( 2012 ) . p. 40 11 AMSP ( 2010 ) Nazory podnikatelu na korupci. World Wide Web. amsp. cz/uploads/soubory/pruzkum4_web_final. pdf ( in Czech ) cited in Transparency International Czech Republic ( 2012 ) . Studie narodni unity Czech Republic. World Wide Web. transparence. cz/studie-narodni-integrity/ 12 Decarolis. F. . Giorgiantonio. C. and Giovanniello. V. ( 2010 ) The Awarding of Public Works in Italy: An Analysis of the Mechanisms for the Selection of Private Contractors. hypertext transfer protocol: //www. bancaditalia. it/pubblicazioni/econo/quest_ecofin_2/QF_83 ; internal & A ; actio n=_setlanguage. action? LANGUAGE=en. cited in Transparency International
Italy. National Integrity System Assessment ( 2012 ) . World Wide Web. transparence. org/whatwedo/pub/corruzione_e_sistema_di_integrita_in_italia

With fiscal support from the Prevention of and Fight against Crime Programme of the European Union European Commission – Directorate-General Home Affairs

13 Access to Information Programme. Access to Information in Bulgaria 2010 ( 2011 ) . p. 27. hypertext transfer protocol: //store. aip-bg. org/publications/ann_rep_eng/2010. pdf. cited in Transparency International Bulgaria ( 2012 ) National Integrity System Assessment. hypertext transfer protocol: //media. transparence. org/nis/cogs/assets/bu/pdf/NIS % 20BULGARIA % 20ENG. pdf 14 The findings of the 25 take parting European states are available online at World Wide Web. transparence. org/whatwedo/activity/european_national_integrity_systems_pro ject 15 Magyar State Audit Office ( 2008 ) . Report on the monitoring of the public procurance system. World Wide Web. asz. hu/ASZ/jeltar. nsf/0/EF2A44F5115DD750C12574C5004E1461/ $ File/0831 J000. pdf. as cited in NIS appraisal Hungary. World Wide Web. transparence. hu/National_Integrity_Study 16 Transparency International. Money. Politics. Power ( Berlin: TI. 2012 ) . p. 40. World Wide Web. transparence. org/enis/report 17 European Commission Press Release on Modernizing European public procurance to back up growing and employment ( 20 December 2011 ) . p. 1 18 To maximize the possible positive impact of oversight organic structures. the contract threshold sums as laid down in Article 84. 6 of the new proposed directive ( ˆ1 000 000 in the instance of public supply contracts or public service contracts ; ˆ10 000 000 in the instance of public plants contracts ) should. for case. be lowered. This would lend to the bar of contracts being intentionally set below the proposed threshold figures to avoid safeguard steps. See http: //eurlex. Europa. eu/LexUriServ/LexUriServ. make? uri=CELEX:52011PC0896: En: NOT 19 Proposed Article 84. 3 ( vitamin D ) of the Proposal for a Directive on Public Procurement. COM ( 2011 ) 896 concluding. hypertext transfer protocol: //eurlex. Europa. eu/LexUriServ/LexUriServ. make? uri=CELEX:52011PC0896: En: NOT

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