CCC audit highlights need for robust procurement*

Queensland Health is the latest government body to have its procurement practices questioned.
The State’s Crime and Corruption Commission (CCC) recently completed an audit of five state hospital units which were found to have been ‘cutting corners when awarding contracts, opening them up to corruption risks’.

While the CCC found ‘no instances of corruption’, it did identify multiple cases in which ‘the procedures in place did not adequately protect the services from corruption’.

The watchdog identified 13 areas for improvement across the different units, including improving procurement standards and codifying those standards.

It noted that corruption vulnerabilities were present at several stages of the procurement process, ‘from determining the procuring method to initial tendering and selection of preferred suppliers’.

This case again highlights not only the need for probity in government procurement, but importantly, the requirement for strong policies and robust systems and processes to support those policies.

Systems ensure transparency
While the CCC did not make specific recommendations, many government entities faced with similar challenges have opted for technological solutions.

e-Procurement solutions add transparency to every step of the procurement work flow.

e-Procurement websites can be used to publicise supply opportunities and to cast the net as widely as possible, reducing the risk of contracts being unfairly awarded to favoured suppliers, as happened with Queensland Health. Additional benefits include identifying potential vendors who were not even on the radar, and, therefore, ensuring healthy competition for contracts.

Systemised procurement also means agreeing to key decision criteria before a Request for proposal (RFP) is issued, again protecting government entities from biased tender documents slanted toward preferred suppliers.

Automated evaluations apply objective criteria
One of the key benefits of e-Procurement is the objectivity guaranteed by automated evaluation processes. Evaluation toolsets like those used by illion TenderLink clients apply objective measures to various aspects of the tender responses. For example, bids that don’t meet set criteria can be automatically rejected. Purchasers can also weight their criteria to reinforce their policy objectives. If a buyer has a strong ‘buy local’ policy, bidders from outside the area might have a negative weighting applied to their overall score while locals benefit from a positive multiple.

The use of pre-agreed criteria and objective scoring provides the powerful audit capability lacking in a number of Queensland Health contracts identified by the CCC. The robust system reports generated through computerised evaluation therefore reduce risk and enable oversight of each stage of the process.

 

Of course, very few systems can totally prevent the risk of fraud, but the use of e-Procurement certainly makes it harder to rort the procurement process. When tenders are widely published and responses automatically captured into the procurement system, it is hard to limit the evaluation to preferred bids. It is even harder to ‘cheat’ automated evaluation systems which apply objective scores to each bid. And finally, the transparency of the whole e-Procurement cycle increases the probability of discrepancies being detected before contracts are awarded.

Most importantly, the use of an e-Procurement approach sends a message, both internally and to the broader supply chain, that the organisation is committed to efficiency, fairness, probity and transparency.

Phil Stark is Director of illion TenderLink. (illion.tenderlink.com), Australasia's largest integrated web-based procurement solutions provider.

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