Laurence Millar
TINZ Member with Delegated Authority for Open Government
Transparency International New Zealand (TINZ) is offering the following advice to the new Parliament.
TINZ recommends that the new Government take immediate steps to tighten up its procurement processes, record keeping and oversight.
New Zealand is rated number one in the world for government procurement, according to Oxford University’s Blavatnik School of Government.
Regrettably, the bar is low, and we have some strengths that can obscure other weaknesses. For example, our Government Procurement Rules (the Rules) are unquestionably very good. However, there is still a vagueness as to what and how much goes to where and to whom. This lack of transparency is unacceptable.
The New Zealand government spends over $40 billion dollars a year on goods and services, and local government many more billions on top of that. The COVID-19 pandemic has required quick decisions to move vast amounts of resources. This is a necessary response, but one that has unquestionably increased the risk of fraud and corruption.
Transparency enables people to see that resources are being spent responsibly, and in a fair way. The lack of open data on procurement raises concerns about bribery, corruption and fraud related to procurement. The lack of openness will undermine public trust in government.
Major concerns
TINZ has three areas of major concern about New Zealand government procurement:
- The quality of data as reported by the Government Electronic Tendering System (GETS) is poor and a long way from meeting mandatory procurement requirements. Public agencies need to step up their recording, analysis and reporting of procurement information.
- There has been poor and incomplete publication of emergency procurements undertaken during the COVID-19 pandemic. It is not possible for the public to monitor COVID-19 related procurement or expenditure. This is not acceptable.
- The lack of public transparency on 97.5% of government procurement which is not reported in contract award notices on the GETS. This must change.
Transparency builds trust
TINZ strongly supports the work of the Ministry of Business, Innovation and Employment (MBIE) to develop and publish the Rules and associated Guide to Emergency Procurement. These create the ground rules for fairness. We also commend MBIE for publication of contract awards' notices as Open Data, to enable scrutiny of expenditure decisions. This is achieved by publishing Contract Award Notice on GETS, including the expected spend under the contract.
What this Open Data initiative has identified is that the mandated rules are not being followed, generally, or specifically under the COVID-19 response. TINZ has highlighted these concerns, publicly and through direct advocacy. The government's response has been slow.
GETS data quality and exemptions
There are two data-fields that TINZ believes to be of the most important from a transparency perspective: (i) the contracted supplier and (ii) the value of the contract.
Sadly, only 13% of the published Contract Award Notices analysed in 2020, contained information on the successful supplier. 65% did not disclose the value of the contract. Both of these are mandated fields under the Rules.
The total value of contracts published on GETS represents a paltry 2.5% of the total annual government expenditure (on goods and services, based on Office of the Auditor-General/MBIE estimates for 2017).
While the Rules include exemptions for certain types of procurement (i.e., All-of-Government contracts, Syndicated Contracts and Common Capability Contracts), TINZ strongly advocates for all procurement to be included. For this to happen, exemptions should be phased out with the exception of awards under the Intelligence and Security Act 2017.
Recommendations
- All government agencies to publish details of all COVID-19 procurements by 31 December 2020, with details of the supplier and contract value.
- MBIE to specify data required and set targets for quality of published GETS data:
- Contract values to be published for 100% of award notices by June 2021 (current 35%)
- Supplier field to be published for 100% of award notices by June 2021 (current 80%).
- Exemptions for publicising awards under procurement rules should be phased out.
We welcome an opportunity to meet with you, or provide our data analysis.
