This Week’s Summary of Articles from Public Spend Matters Europe

Launched on September 1st our new site, Public Spend Matters Europe, is continuing to receive a good reception from the public procurement community around Europe. There’s a new article every day so the volume of diverse and interesting reads is really starting to mount up. Each Friday, we are featuring a brief summary of the main articles published that week on PSME. If you see something of interest, please click through and take a look at the whole thing – there’s lots to catch up on around Europe.

Corrupt procurement in Ukraine military leaves soldiers buying own equipment

In times of peace, public sector corruption is bad enough, but when it spills over into times of unrest or even war – the consequences are devastating if not life-threatening. As conflict in Ukraine continues, more is being revealed about the state of the Ukrainian military. Many of the deficiencies that have been highlighted by international media are the result of corruption, particularly in procurement of military equipment, where malpractice has left soldiers out of pocket to provide their own essential equipment. In tomorrow’s article we will explore the efforts of Ukraine’s new anti-corruption bureau.

Could Ukraine’s new anti-corruption bureau improve public procurement?

An anti-corruption law was signed on October 23rd and the bureau is expected to come into force by the end of this year. Since it’s independence, Ukraine has never before had a state body with the powers the new bureau will have. Public sector procurement in Ukraine is one area where corruption runs rife. Earlier this year, former president Viktor Yanukovych said that corrupt dealings in public procurement resulted in 10 to 15 percent of the state budget – or around $7.4 billion – going into the pockets of officials. Corrupt procurement in the defence sector has also resulted in a recent lack of military equipment.

More competition drives lower prices - study confirms this for utilities tenders

Public Procurement of Homogeneous Goods: the Czech Republic Case Study, presented at the IPPC Conference in Dublin this summer, looks at a range of 250 competitions held in the Czech Republic between 2008 and 2011 in the utilities (gas and electricity) markets. The authors wanted to see if the number of firms competing for a particular contract had an impact on the final prices agreed and paid by the contracting authorities. They carried out a statistical analysis of the data to isolate number of bidders as a factor. The findings confirmed what we might have thought and expected as procurement professionals. The more bidders involved, which increases the competition, the lower the price.

New EU Regulations allow early engagement – but buyers must still be careful (part 1)

Engaging with suppliers before the beginning of a formal procurement process has for many years been seen as normal in the private sector. But many public sector professionals have been nervous about this “market engagement,” because it runs the risk that later on, other potential suppliers might claim that the process was unfair that they were not also “engaged.” The new EU Directives try hard to make public procurement more flexible and in some ways more like a private sector model. We discuss the implications for public sector here.

Spain fighting corruption that questions tendering process

Top figures in Spain have become embroiled in an investigation into the corrupt awarding of public contracts. It raises some series questions over the tendering process that procurement professionals would want to ask, like: how come politicians get to decide who wins a contract? Is there any involvement from procurement professionals, or only politicians? Was the €250 million-worth of public contracts advertised or awarded directly to the corrupt firms?



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