New public procurement regulatory framework to deter corruption
A new public regulatory framework with clear transparency, accountability, and oversight rules will come into effect this year once the new legislation is passed in parliament aimed at limiting corruption opportunities and malpractices in the current public procurement process.
The reports of the Ministry of Finance, the Auditor-General’s Department, and the Department of Management of Audit indicate malpractices have led to inefficiencies and waste of scarce resources of the Government in the context of tight fiscal space.
In this context the new Public Procurement Law that reflects international good practices will be enacted this year providing provisions to set up a new regulatory authority.
The Procurement Management Information System (PROMISe) is being developed but is currently in a pilot phase.
PROMISe has the potential to be a key tool for improving the integrity of public procurement by enabling better processing, tracking, recording, reporting, and publicising procurement actions and outcomes.
Sri Lanka currently lacks a formal legislative basis for procurement and it has contributed to high-levels of political engagement in the selection of procurement winners, poor contract management, limited transparency and a lack of oversight, a Finance Ministry report revealed.
Another issue was not blacklisting defaulting contractors and awarding contracts repeatedly to the same fraudulent contractor which shows a lack of compliance with existing regulations, it added.
The other issues are generated by poor procurement planning, reliance on non-competitive means for contract awards, inadequate competition, and inconsistent attention to contract performance and the enforcement of contract terms
It has been observed that the present public procurement regulatory framework has failed to save public funds from being misused and stolen by failing to blacklist firms engaging in fraudulent and corrupt practices. Awarding mega project or commodity tenders such as fuel and coal without competing bids and a lack of clarity in the government procurement leads to reports of large-scale corruption, Ministry sources said.
It undermines competition and can push up the price of contracts, leading to a waste of scarce public resources.
Public policy think-tank Verité Research has indicated that the amount lost on public contracts due to corruption can amount to 10–25 per cent of a public contract’s value on average.
The procurement process is fragmented among three layers in the government: departmental, ministerial, and cabinet levels with no mechanisms for ensuring procedural consistency, efficiency, or integrity.
Sri Lanka currently operates a highly decentralised procurement system. The responsibility for executing procurement is vested with secretaries of respective line ministries. Technical and bid evaluation committees are set up per the delegation of authority at the line ministry and Cabinet level.
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