Transparency International’s latest corruption index (2009) shows that comparing with the other 179 countries surveyed, Malaysia is ranked 84th, with the score 3. 4 out of 10 while Singapore came third with the score of 9. 2. Corruption has become a norm in many countries nowadays and Malaysia is no exception. One of the root channels of the corruption stems from the “public procurement” process. In 2010, Malaysia government allocates 33. 8% of its budget to public procurement which goes to contracts for services and goods for various ministries and authorities.
Over 8 years of working experience in public sector, it is inevitable to say that corruption in procurement is one of the most critical problems we are facing. Like in many countries, the procurement process of acquiring US$ 10 stationary is similar to the process of acquiring one car, which is slow and tedious, not to mention a pile of documentations accompanying its transaction. In contrary, current system allows politicians and high rank officials to approve multi-million dollar project more liberal but less transparent than it supposes to be.
This seems to heighten the risk of corruption in procurement which occurs at various forms, including bribery, fraud, biased decision, or simple abuse. Malaysia has revised its procurement regulations in 2005 to alleviate the problem of corruption in mega projects by launching the E-auction system. Instead of reviewing the fixed financial proposal, procurement of a high budget project must be conducted through the electronic auction system where tenders are at the bidding site in separate rooms, and interact through a computer system, to bid on the project.
No surprise, e-auction fells to prevent corruption because, oftenly, the selection has already been made secretly prior to the closing bid time with undisclosed agreements. Bribes or commissions are paid to the decision makers in return for winning tenders or awarding contract. How to prevent the corrupt activities of public procurement? The answer which may not be as simple as it sounds is the increasing of publicity and transparency in the procurement processes. Several methods and procedures must be incorporated to the procurement system.
The publication of procurement opportunities definitely increases participation and consequently reduces the risk of collusion or failure of tendering. The procurement opportunities with clear definition of the criteria and procedure for bid selection must be published not only on the relevant agency website, but also on the national procurement website with a minimum period of time. Subsequently, the selection of a bidder and the award of the contract must be announced online.
Standard cost which is the cumulative moving average cost of goods and services bought should also be recorded and can be easily found online. Any purchase of the similar item with great differ from the standard cost should be red flagged and scrutinized. Integrity in the procurement process can be improved by allowing lost bidder to complain and request to review of procurement decisions document. Specific code of conduct for officials in public procurement should be adopted and extensively promoted. Malaysia is in need to take these steps forward to ensure the integrity and transparency of its public procurement.