Public Procurement Regulation to Avoid Corruption, Fraud, and Waste – Term Paper Example
Running head: History of public procurement History of public procurement Insert Insert Grade Insert Tutor’s Name
2 November 2011
History of Public Procurement
Public procurement, also referred to as public tendering, is a major function of the government. It involves tendering of goods and services on behalf of a public agency. A public authority can enter into a contract with an external supplier with an aim of carrying out specific tasks or providing goods and services (Great Britain: Parliament: Joint Committee on Human Rights 50). It is also considered as the main element in the way public funds are utilized, hence enhancing public trust in procurement (Beth & OECD 19).
Public procurement has been in existence since 1778 and has led to the implementation of public procurement law, which regulates the purchasing made by public sectors that contract goods, services and work. Public procurement is regulated in most countries to avoid corruption, fraud, and waste; indeed, public tenders are issued by a public authority when the value of procurement exceeds the required threshold. Today, public procurement is becoming more complex, forcing the public procurement officials to deal with the changing issues based on fairness, transparency, integrity, and equity, which are the principles of public procurement (Beth & OECD 18).
The History of Public Procurement
According to Thai (13), the first purchasing action was conducted in 1778, with the approval of the continental congress on the appointment of purchasing commissionaires. By the end of that year, the purchasing officers had been placed on a salary, with an aim of avoiding fraud. The congress thereafter passed a Purchasing Act, which permitted war and treasury departments to make purchases in the name of the United States. The first procurement was made in 1794 for the new United States navy; however, this procurement was accompanied by negative experiences, which led to the implementation of purveyor of Public Supplies Act, a procurement legislation that was the basis for military procurement.
Misconducts and fraud cases led to the implementation of Public Contract Act of 1808, which warned members of the congress from using government contracts for personal interest (Thai 13). In the United States, public procurement organizations vary with the size of the government units; however, it has a complicated procurement structure. The federal procurement operates within a democratic framework, which is under the legislative, judiciary, and executive branches. Nevertheless, the courts are not involved in setting procurement policies and rules; however, they try the legal cases that involve contract disputes.
The congress passes the laws that establish procurement policies and procedures; it also allocates specified funds for the procurement purposes within the time required (Thai 19). Public procurement also encounters several challenges. This function has a great impact on the country’s economy; hence, efficient handling of public procurement has proved to be a challenge. Ensuring that the principles of public procurement are followed to the later is also a challenging task. This includes ensuring that fair competition for the bidders is granted, promoting transparency, and ensuring that the allocated loans are used for the specified purposes only.
Thirdly, public procurement is associated with fraud, waste, and corruption, hence a major challenge for a country. In addition, public procurement practitioners face the challenge of complying with their home government regulations without violating the international trade agreements like the World Trade Organization (WTO). Today, the government has enacted several laws pertaining to public procurement, among them being the Public Act whose aim is to enact laws relating to public contracts. An example is the federal acquisition regulation and agency, which provides uniform procedures for federal agency acquisitions.
The Truth in Negotiation Act of 1962 establishes rules that require tenderers to disclose specific cost information during the bidding process. It also imposes penalties for failure to disclose the appropriate cost data (Global legal group 201). These procurement laws vary with states; some states have a specific Procurement Act, for instance, the Virginia Public Procurement Act applies to the state of Virginia. The government has implemented such laws with an aim of curbing corruption, fraud, and waste.
The four pillars of public procurement that include accountability, transparency, compliance, and effective management assist countries in developing a sustainable public procurement. Today, public procurement has improved and the government has introduced public procurement outreach and training programs, which assist in educating public procurement officials and government investigators concerning the cost of bid rigging. Bid rigging costs taxpayers more money for goods and services purchased, since they are deprived the full benefits involved in competition.
These outreach programs educate public procurement officials and government investigators on various types of fraud, making it easier for them to detect illegal conducts on time and frequently. These programs enhance close work relations between government attorneys, procurement officials, and government investigators, (OECD 2). Public procurement has developed over the years, and more precaution measures are in place compared to 1778 when it began.
Public procurement is a vital function of the government of a country, as it affects the economy of a country; however, this function is associated with the challenges of fraud and corruption, which tarnish its image. To obtain efficiency in public procurement, the principles of transparency, equity, and integrity must be adhered to. A country must also focus on maximizing fair competition among bidders, while new technology should be embraced with an aim of enhancing procurement efficiency, which can include e-procurement and purchase cards.
Beth, Elodie & OECD. OECD principles for integrity in public procurement. Paris: OECD Publishing, 2009.
Great Britain: Parliament: Joint Committee on Human Rights. The meaning of public authority under the Human Rights Act: ninth report of session 2006-07, report, together with formal minutes, minutes of evidence and appendices. NY: The Stationery Office Publisher, 2007.
Global legal group. Public Procurement. 2011. 03 November 2011. http://www.iclg.co.uk/khadmin/Publications/pdf/4209.pdf
OECD. Roundtable on competition and public procurement in Latin America. N.d. 02 November 2011. http://www.oecd.org/dataoecd/34/12/39214859.pdf.
Thai, Khi. “Public procurement re-examined.” Journal of public procurement, Vol. 1, Issue 1, pp. 9-50, 2001. 02 November 2011. http://ippa.org/jopp/download/vol1/Thai.pdf
Thai, Khi. Challenges in public procurement. N.d. 02 November 2011. http://www.unpcdc.org/media/4899/challenges%20in%20public%20procurement.pdf.