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Reforming public procurement

The European Union promotes a strategy of transparent, fair and competitive public procurement across the Single Market as it generates business opportunities, drives economic growth and creates jobs.

The tactics it uses to achieve this strategic objective includes cutting red tape and capitalising on the benefits of the digital revolution. Improved governance, the simplification of procedures and the greater use of electronic tools in public procurement are other important tools for fighting fraud and corruption.

Bridging the gap between the ideal public procurement process and its implementation seems to have been behind the government’s recently-announced reforms in the public procurement process as detailed by the Principal Permanent Secretary, Mario Cutajar.

The main change to the system is that ministries will, from now on, vet their own tenders while the Contracts Department’s role is being changed from that of operator to regulator.Decentralisation of the procurement process gives rise to big challenges as it may be difficult to find enough officials who are experienced enough in procurement methodology while also having the integrity and independence of thought to ensure that the system as implemented is beyond suspicion.

So while decentralisation can speed up the process of awarding tenders, it could fail to guarantee that decisions are in the public interest.

Little has been said about how the public procurement system can be made more transparent as required by the EU strategy. Cases relating to the management of certain public procurement raise concerns about whether the administration does indeed have the political will to make the public procurement system fair and transparent. The Times of Malta, for example, recently reported how a tender for the supply of lubricants to the Transport Ministry’s public works directorate for the coming two years was suspended after the deadline for the submission of offers was extended by an hour only five minutes before closing time. One would be justified in asking whether this extension was made with the consent of the Contracts Department that will soon become the regulator of a decentralised public procurement process.

There is another issue: the award of large public procurement contracts are often shrouded in secrecy on the pretext of sensitive commercial elements that may form part of such contracts. The Electrogas contract and the those awarded to operators to manage some of the country’s public hospitals remain under wraps or not fully published. No one can really judge whether the public interest was sufficiently safeguarded in these contracts with private service providers.

The Freedom of Information Act was introduced in 2012 to promote good public governance, accountability and transparency. Yet, the media is finding strong political resistance to extract the information it requires to carry out its duty of keeping the public informed on the way public funds are being spent.

The government’s hiding behind ‘commercial sensitivity’ to prevent essential procurement information being made public raises questions on whether the political will really exists to ensure that only truly accountable and reliable persons of trust make decisions on how taxpayers’ money is spent.

The hallmark of a good public procurement system is to obtain value for money and increase the efficient use of public resources. The recently announced public procurement reforms have some merits, including that of speeding up decision-making, but they fail to address sufficiently well the risks of wrongdoing – if not outright corruption - by failing to make the process more transparent.

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