The rules for central government agencies undertaking procurement are revised on a regular basis and have been out for consultation.
Transparency and accountability in procurement ensures that there are ‘eyes’ on the spending of public funds. That helps to reduce the risk of improper spending as well as providing an opportunity for suppliers to raise concerns about fairness. It also hinders corruption… and we have recently seen cases of contract manipulation and bribery.
TINZ has consistently advocated for increased transparency of government procurement through the Open Government Partnership process and in our National Integrity System Assessment work.
For several years TINZ MDA Lawrence Millar toiled away on the raw data from the GETS procurement portal to highlight weaknesses in both content and implementation of the rules. (see Transparency of government procurement – stocktake.) This year we have been fortunate to have Jo Toon, a new Member with Delegated Authority (MDA) on the case.
There are some very good, strengthened transparency provisions in the proposed new rules and unfortunately also areas where the wording has been weakened still enabling loopholes or slack behaviour.
Proposed improvements in transparency, accountability and due diligence include:
- A requirement for agencies to make procurement policies publicly available.
- Publishing of Contract Award Notices on the government tendering system where an agency has exercised an opt-out. This will increase transparency, particularly in the social sector.
- Publishing a contract award notice for secondary procurements when the value is $10,000 or greater. This should, if complied with, significantly improve transparency across all of the panels (All of Government (AoG), Marketplace as well as open and closed syndicated and those run by individual agencies).
- Increased due diligence of verifying that a supplier is who they claim to be by looking at their legal set-up, including beneficial ownership. This will be a useful integrity checking tool, and it is driven by increasing illegal use of shell companies and trusts in a globalised market. Recommendations have been made for more transparency around beneficial ownership by global assessment bodies such as the Financial Action Task Force.
- Whilst we do not yet have a public register of beneficial ownership, all agencies do currently require information from suppliers, and this could include information about their ownership (as well as legal ownership).
- Prompt notification of the reasons for cancellation of a procurement. This is good but should be extended to ‘no award’ tenders. Approximately half of current ‘No Award’ notices do not have any reason why the agency didn’t award the concert.
We have criticised weaker elements of the proposed rule changes. For example a general loosening of rigour around the purchasing of procurement advice from a supplier that has a commercial interest in the contract opportunity.
However TINZ is generally very supportive of the proposed changes. We think these changes - if followed - will increase transparency and accountability of the spending of the public purse.
TINZ also recommends that the NZ Government Procurement Rules be reviewed against international standards such as the Open Contracting Partnership Global Principles and the OECD Principles for Integrity in Public Procurement.
