Full automation crucial to ensure transparency in e-GP

Despite having e-Government Procurement (e-GP) system online and open, the opportunities for tender manipulation have not been completely closed. The entire system needs to be made 100 per cent digital in a bid to guarantee transparency in government procurement. Tender evaluation will become more transparent and more widely accepted if officials perform their duties with honesty and efficiency. 

The speakers highlighted these points at a roundtable meeting entitled “Government Procurement: What to Do to Ensure Transparency and Accountability”, organised by Daily Samakal.

The roundtable meeting was held on Tuesday at the Daily Samakal office in Tejgaon, Dhaka.

Shish Haider Chowdhury, former Information and Communication Technology Secretary and procurement expert, presented the keynote address.

In his address, Shish Haider said that effective implementation of the legal framework and expansion of the digital system is essential to ensure transparency, accountability and competition in government procurement. 

He pointed out that about 45 per cent of the national budget and about 85 per cent of the Annual Development Programme is spent on government procurement. At present, 100 per cent of government tenders are published online. The number of daily applications for registration on the e-GP system has risen to between 200 and 300. This is an important step towards ensuring transparency and accountability in government procurement. However, strict measures must still be taken against irregularities to make transparency a reality; conflicts of interest must be avoided. Besides, the quality and accountability of government procurement can be further strengthened through citizen participation and social audit. And for this, training must be provided to government officials, contractors and all other stakeholders involved in procurement, starting from the grassroots level. 

He also noted that the new rules require a minimum of 25 per cent of the operating budget to be reserved for purchases from women-owned enterprises, small and medium entrepreneurs and new organisations. If this provision is properly implemented, smaller companies will also gain opportunities to get work.

Dr Iftekharuzzaman, Executive Director of Transparency International Bangladesh (TIB), said that a syndicate is formed through a three-way alliance involving political influence, the administration and contractors. It is decided in advance who will be given the work. 

He cited that a research study by TIB has shown that over the past eleven years work orders worth Tk60.69 crore were awarded through tenders in which only a single contractor took part. Through the e-GP system, one contractor participated in each of these tenders and that same contractor received the work. 

To obtain the real benefits of the electronic system, he argued, the system must be freed from the vicious circle of political influence, collusion and syndicate activity. All types of purchases should be made through the electronic platform, pre-tender meetings should be ensured, and an online database of contractors should be available.

Md Abul Khair, additional chief engineer of the Public Works Department, said that a clear and uniform method is needed for the evaluation of tenders. To ensure transparency, responsible officials should be protected from unethical pressure exerted by political figures and other powerful people. If allegations of irregularities in tender evaluation arise, effective legal protection can be provided through a review panel. Where irregularities are found, effective action will be taken against the contractor, the government official and whoever else is responsible. There will also be digital audits, and all information will be published online. 

He added that transparency and accountability will increase if a complete record of the tender evaluation is prepared and uploaded to the electronic system, setting out in detail the reasons for declaring a bidder responsive or non-responsive.

Md Golam Yazdani, additional chief engineer of the Local Government Engineering Department, said there is still a deficiency in contract management although purchasing agencies have gained greater capacity in the processing of tenders. In order to increase efficiency in this area, training is required together with a change in the mindset of those concerned. 

He explained that if a contract is managed properly it becomes possible to complete the work on time and the project cost does not increase. On the other hand, if anyone damages the government procurement process through deliberate mistakes or manipulation, both the purchaser and the economic operator should be held accountable and punished.

Ashraf Ahmed, former president of the Dhaka Chamber of Commerce and Industry, said that although the e-GP system has brought great progress to the government procurement system in Bangladesh, limiting reform to the tender process alone will not solve the problem completely. Although the process from the invitation to tender through to the issue of the work order is now largely digital, the stages of contract implementation, monitoring of work progress, approval of additional work, extension of time, verification of bills and payment of bills are not yet fully automated. 

A major risk of wastage of government money and of corruption arises precisely in the stages that follow the issue of the work order. He, therefore, demanded that the entire process, from the preparation of the annual procurement plan through to the completion of the contract and the payment of the final bill, should be brought on to a digital platform.

Atikuzzaman Sazid, research associate at the Centre for Policy Dialogue (CPD), said Bangladesh’s Public Procurement Act and Public Procurement Rules constitute a strong legal framework in compared with the experience of other countries. However, although the law itself is strong, its implementation is far less effective. This weakness is especially visible in the area of project implementation. 

He observed that, compared with the one-time procurement of goods or services, the PPA and PPR do not contain adequate or clear instructions for project implementation. Consequently, opportunities for corruption and irregularities are created in this sector. Introducing the e-GP system alone will not solve the problem. It will remain difficult to stop irregularities and corruption unless the government procurement process is made completely digital. He also emphasised the need to reform the complaint and redress system. He noted that a procuring institution cannot impartially judge complaints raised against its own decisions. For this reason, the formation of an independent review board is necessary. 

In addition, the Head of the Procuring Entity involved in the procurement process should also be held accountable. To ensure true transparency in government procurement, he said, all government contracts should be published online, regardless of the value of the contract. This would allow the public to know how government money is being used and would increase accountability throughout the procurement process.

Despite major reforms in the tender process for government procurement, there is still a lack of transparency and accountability in the selection of consultants, said Engineer Rana Masud, chief executive officer of Innovate Engineering and Development. 

He pointed out that although information on the time frame from the letter of interest through to the work order is held within the electronic system, it is not published, and, therefore, there is no accountability for delays. Reducing delays is itself a measure that helps to prevent corruption. There is no defined level of qualification for the short list, nor any written definition or number-based structure for it. 

There is no instruction on how the number of organisations is to be reduced from a large field of similar organisations down to seven. This gap creates opportunities for tender manipulation and for the formation of syndicates. There is also no upper limit on how many tasks one organisation may undertake at the same time; as a result, the same organisations repeatedly receive the work. 

He proposed that those parts of the technical proposal in which the scoring is most subjective—namely methodology, work plan and arrangement of manpower—should be evaluated by code numbers inside the electronic system while the identities of the firms remain confidential. The identity would be revealed only after the scores have been finalised. 

He noted that while there is a prescribed procedure for verifying abnormally low bids in ordinary tenders, there is no equivalent provision for consultancy proposals. Manipulation occurs at four stages: in the formulation of specifications, in short-listing, in technical evaluation, and in variation order after the contract has been awarded. The remedy in all four stages is the same: the reasons for every decision must be preserved in writing and then disclosed.

Bivas Biswas, application manager and electronic-procurement expert at Candor Scientific House, commented that the scope for tender manipulation has not been completely closed even though the e-GP system is online and open. In his view the problem does not lie in the hiding of information on the electronic portal itself, but in the manual decision-making that takes place outside the portal. 

He said that opportunities for manipulation are created at field level in four stages. These include the addition of unreasonable conditions designed to favour a specific brand or model, the imposition of unusual turnover and experience requirements that exclude all but a few preferred companies, the declaration of qualified bidders as non-responsive through biased technical evaluation, and the repeated use of the same favourable conditions by the same purchasing authority. 

He proposed four steps to prevent tender syndicates and rigged tenders. He emphasised the need for independent technical review before major tenders are published, risk-based audit through data analytics, disclosure of evidence-based reasons for declaring a bidder responsive or non-responsive, and verification of actual beneficial ownership. 

In cases of proven irregularities or collusion, the tender should be cancelled and, in addition, exemplary action should be taken against the responsible officials and suppliers. At the same time, he demanded that an effective, impartial and time-bound appeal system be ensured for aggrieved bidders.

The roundtable meeting was moderated by Hasan Zakir, Assistant Editor of Daily Samakal.