In my previous two articles, I highlighted two important procurement system issues. In first article, I attempted to provide a general understanding of procurement, specifically how to minimize costs and maximize benefits in procurement. In the second article, I depicted a conceptual model of various procurement factors. This article focuses on one of the most important aspects of procurement, namely transparency in the procurement process. I'll try to come up with a procurement transparency model that everyone can use.
What is Procurement Transparency?
Procurement Transparency is defined as providing open, honest, and fair information about the procurement to bidders. It also assists decision-makers in acquiring the right kinds of goods and services while maintaining high quality at a low cost. Transparency is crucial in procurement. In general, transparency requires everyone involved in the procurement to act openly, fairly, and honestly, allowing observers to see right through their actions .It also holds officials involved in the procurement process accountable.
The following is a model for procurement transparency:
Features of Transparency
The diagram above depicts four aspects of procurement transparency. These include information, entities authorized to possess information, transparency types, and stakeholders who require the information for the procurement.
The information provided to bidders should be credible. It should be truly honest, accurate, and relevant information. Honest and adequate information is required to ensure transparency in the procurement process. To meet the needs of all stakeholders involved in the procurement process, honest information should suffice. Furthermore, the information provided must be timely and relevant. When bidders are not provided with timely information about the procurement, there is a lack of transparency. As a result, all parties involved should have access to procurement-related information.
A procurement system that is accurate and visible but not accessible will not ensure transparency. Adequate laws, procedures, and regulations governing information accessibility can help to ensure this. However, a balance must be struck between laws, regulations, and procedures.
The procurement system involves a wide range of entities, including government officials, businessmen, and other organization officials. Each entity has its own set of rules. Public officials and other organization officials are accountable to the government and their respective organizations as they are paid with people's taxes or tax payers'. They must be transparent in all of their actions while participating in a procurement process. Vendors, on the other hand, are responsible for their own business and must protect both their own and the company's interests. They must, however, be transparent when quoting and participating in any bidding process.
Different organizations also remain involved in the procurement process. A strong organizational culture is also essential in procurement. Transparency in the procurement process is always associated with a healthy organizational culture. There are organizations where the organizational culture ensures that all of their actions are transparent.
Types of Transparency
Transparency can be voluntary or involuntary. However, voluntary transparency is always accepted and expected. Transparency in procurement requires openness. Sharing information is particularly important for a transparent and competitive procurement system and culture.
Insider and outsider information should be shared to ensure a transparent and accountable procurement system. As discussed before, there are many stockholders involved in the procurement process. The stockholders are insiders and also outsiders. However, information is not only for insiders. It should be shared both by insiders and outsiders for a transparent procurement system. Sharing information reduces the chance of monopoly. It will enhance competition and ensure openness, fairness, equality, and simplicity those are the prerequisites for a transparent procurement system.
The writer is a Major General in Bangladesh Army. He is an expert on procurement, contract management, contract negotiation and supply chain management