Technical Corruption in Procurement Procedures

Abdullah Khan 

Daily hot debates among Pakistanis on TV talk shows and articles in print media strengthen the belief that poverty is continuously rising in our county. There’s hunger and poverty in Pakistan despite of the fact that our country is agrarian. This state of affairs is caused by financial corruption in the government and private sector organizations.

Other than economic instability, it is also believed that badly penetrated financial corruption within crime investigating agencies and justice delivering authorities is the major impediment towards redressing the grievances of poor people in receiving free, fair and no-cost or low-cost justice particularly in our under privileged societies.

Thanks to media for making every Pakistani realize the methods and ploys used by the powerful authorities to conduct and cover financial corruption at a massive level. Most of the corruption is carried out by a nexus of influential politicians, high authority holding bureaucrats and their representatives in civil sector through the government authorities having funds disbursing powers.

Most vulnerable and easily manipulated public funds are developmental funds that are utilized through open tenders under Pakistan Procurement Regulatory Authority (PPRA) rules. Before I proceed, let me tell you that I have a small business and engage in procurement process, in both government and private organizations in Gilgit-Baltistan. I have been participating in the tenders for supply of IT, medical and electro-mechanical equipment in government and non-government organizations all over Gilgit-Baltistan for the last sixteen years. During these business years, I have observed, but it is hard to prove, how the players have been using various techniques for exploiting the procurement processes in government organizations.

As an example, I am pointing out a technical tactic used in the procurement procedure for purchase of equipment, as an easy tool in which specifications of the equipment are manipulated leading to big corruption benefiting some individuals or groups. My forth coming articles will further discuss other techniques used for corruption subsist in the procurement processes.

Here is a brief introduction of the procurement procedure to develop complete understanding on the subject. Preparation of tender documents prior to tendering is a mandatory part of procurement process. These documents include terms and conditions for the bidders, criteria for evaluation of a proposal and the generic specifications (common features required by an organization) of the equipment that is to be purchased. The features of the required equipments are proposed carefully by the professionals particularly when those are related to the health departments. Different brands with extensive variation in technology, shape, design, and add-on components are offered by the bidders against the request for proposals invited by the organizations. According to PPRA rules, awarding a contract for supply of such equipments to a successful bidder depends on his past experience, maximum matching of the specifications (this criteria has a maximum weight), ability preparing the technical and financial proposals and finally the comparatively low prices offered after evaluation of the proposals by the concern authority.

The rigging starts, Pre-tender rigging, while preparing bid documents the concern professionals of the organizations conspire citing complete specifications rather generic specifications without mentioning the name of a particular brand in the bid documents, whose dealership/distribution is held by their either a participating partner, a relative or a representative of an influential person / high-ups.

Mostly single stage two envelops procedure is adopted where technical proposals are opened first while retaining financial proposal until technical proposals are evaluated and name of successful bidders are not announced. It can easily be guessed that the pet bidder will certainly qualify due to complete matching of the specifications of the brand he offered just because those have already been included as proposed specifications in their bid documents. Here, the particular bidder is benefited taking support of PPRA rule that says that purchase equipment offered by a bidder which matches maximum specifications already mentioned in the bid document even if the offered prices are comparatively higher and it is referred to as ‘lowest evaluated bid’. This is the way a bidder wins a contract with high prices even if the offered equipment is a substandard brand. Though, in such cases it will be a big rob on the government treasury / loss of public property but it is not higher than the prices paid by a consumer particularly if the low profiled equipment is related to health department. Obviously, it is one of the reasons that even under privileged users are less inclined utilizing public resources despite the fact that huge amount of funds are allocated to these organizations to provide quality services as compared to the organizations in private sector.

This kind of corruption is very common but difficult to prove even in courts because the responsible professionals / purchasers have the discretionary powers to select equipment before purchasing and their selection may not be challenged. If an honest leader determines to prove such corruption the fact finders should be sincere, honest and have a complete understanding about the equipment but still the question is intact is it possible in our corruption effected society like a communal disease? As a partial remedy it is requested to the leaders of the organizations that before purchasing of such equipment a committee comprising at least three professionals of the same specialty favorably from different counterpart departments should be formed who will propose generic specifications of the equipments after requirement analysis ensuring not giving any kind of favour to any specific brand or bidder and should be included in the tender documents without any addition or deletion before sending it for advertisement. They should also select at least three different brands offered by different bidders and one of them should be selected on lowest prices offered when the financial bids are opened using their discretionary powers. They also need to write the justifications why specific equipment has been selected. Moreover, today IT solutions are cost effective and so websites of the concern organizations should be developed and updated and comparative statement should be uploaded keeping the bidding processes beyond all apprehensions. However, all these measures will not yield appropriate results unless the whole procurement process is not sincerely and honestly monitored and evaluated by the concern competent authorities.