Strengthening Public Service Delivery: Increasing the Efficiency and Transparency of Public Procurement

By:

John Ku, Janice Kwok, Aida Rahman, Hayley Lee, Ahmad Shafiee

Affiliations:

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Policy Code:

3d Anti corruption

Problem Statement:

The Malaysian Government’s current procurement guidelines stipulates that any procurement shall follow five key principles, namely public accountability, transparency, value for money, open and fair competition, and fair dealings.
However, every year, the Auditor-General's report highlights cases of procured goods, services, and works that are being paid for well above market prices, under-utilised, and sub-standard in nature. It is pointless for the government to develop rigorous policies if it is not accompanied with rigorous enforcement.
Fraud and corruption in procurement is still common in Malaysia. Our priority must be to prevent abuse and to enhance the procurement process within strong institutions with instilling a high degree of integrity, accountability, transparency and adequate controls, and safeguards. We must start now.

Value(s) and Belief(s):

Public procurement in Malaysia has been very vulnerable to procurement fraud and there have been many reported instances of corruption as below-
• Conflict of interest where procurement officials have an undisclosed interest with the successful contractor
• Bid-rigging fraud or collusive tendering schemes involving collusion between competing companies
• Awarding of contracts to unqualified contractors and cronies, such as via direct negotiation procurement contracts
Procurement fraud damages the economy, leads to corruption and higher prices which consumers have to bear, and undermines the economy. Corrupt officials have allegedly provided insider information, allowed contractors to submit their own proposals, tailored specifications to fit the corrupt bidder, shortened tender periods and taken a cut of the profits as bribes from the conspirator's bidders.

Proposal of Solution:

▪ Implement transparent tendering processes: To ensure all government departments and regulators carry out projects based on the advice and recommendation provided by the relevant Technical Departments.
▪ Enforce prosecution of instances where public and private sector individuals/entities have failed to adhere to transparent procurement requirements
▪ Ensure accountability and transparency in defining the exercise of power of Government Ministers especially in procurement and financial system reporting
▪ To introduce standard clauses in project procurements’ undertakings to protect Government’s and public interest in all projects/contracts involving Government, Statutory Bodies, and State-Owned Enterprises (SOEs). In the case of any breach of contract(s), the Government can at any given time, terminate or/and file a civil suit against the party who breaches the contract.

Additional Information:

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