Procurement in Jakarta – the ULP gets to grips with 5,000 tender documents

Corruption in public procurement is a huge issue in many countries in the world. It happens everywhere – but clearly some countries and regions have bigger issues than others.

One recent report from the Jakarta Post here outlines how officials in Indonesia are tackling the problem. Jakarta has set up a Goods and Services Procurement Unit (ULP) at City Hall to approve oversight of all the city administration tendering processes. The unit receives tender documents from all the different departments and agencies and approves them before they are issued to the market.

It is now their job to scrutinise and assess more than 5,000 tender documents filed with the unit before declaring them complete, and opening the bidding on the eprocurement website lpse.jakarta.go.id.

But it is turning out to be a tough job, and the unit is having to act as an adviser, rather than just an approver, as so many tender documents are not suitable for issue. ULP head I Dewa Gede Soni gave one example:

The document requested a tender to procure medicine, explaining in its tender background that the central government had determined 44 items of standard medicines that had to be available at city-run hospitals and community health centers (puskesmas). It did not, however, provide details regarding which medicines or the amount of medicines needed.

So some pretty basic problems here. And this isn’t an isolated case:

Deputy Governor Basuki “Ahok” Tjahaja Purnama has repeatedly said that previously tenders were often carried out without detailed documents and were therefore prone to fraudulent practices.

Soni is also rotating staff, transferring them to different working groups every few months so they won’t be overseeing the same organisation for too long. Whilst that might mitigate against the development of deep category expertise in the ULP, that may be a price worth paying to help avoid corruption. And it sounds like some basic process is probably more important at the moment than deep CatMan skills. He has also banned officials from receiving hospitality from tender participants – another sensible step.

We might think Western countries are immune from these problems, but the issue around rotating staff is pertinent to something that happens even in the UK. I’ve seen examples of interim staff who move around public bodies – local authorities, let’s say – being involved in multiple tenders for similar goods or services. And funnily enough, every tender seems to come up with the same winning firm. Private Eye have reported on one case in the transport sector; I’ve see it in an outsourced service area.  Now maybe there is one supplier who is just clearly better than others in the market - but maybe not. So the problem of staff getting too close to particular suppliers is not just limited to full-time people.

Anyway, good luck to Jakarta.  And to declare a personal interest, my sister, brother in law and nephews have lived there for many years, so good to see these steps are being taken to help spend their taxes more effectively!

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