Characterised by a lack of transparency and accountability, public procurement in Bangladesh is one of the areas that involve an extensive amount of money and equally extensive corruption. In this study, we looked into the existing mechanisms of public procurement and the different methods of procurement used by various government agencies. Our findings revealed major inconsistencies between procurement-related decisions and regulations and also exposed various loopholes in the existing policies.
Researchers: Nazmul Arifeen; Sultan Mohammed Zakaria
Timeline: 2013
Status: Completed
Contact: Dr Mirza Hassan; mirzahassan@bracu.ac.bd
Context
For decades, the economic development of Bangladesh has been plagued and slowed down by the rampant corruption and malpractices in public procurement. According to one source, about 75 per cent of the Annual Development Plan (ADP) of the government is spent on public procurement activities. Such a large amount of money attracts numerous fraudulent stakeholders to the sector that result in immense corruption. To understand how these corruptions occur, there is a need for systematic analysis of the public procurement mechanisms in Bangladesh.
Objectives
The prime objective of our study was to identify the problems in the existing mechanisms of public procurement.
This study is relevant to SDG 16 (Peace, Justice, and Strong Institutions), particularly to promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.
Method
For this study, we developed a semi-structured questionnaire to conduct a survey in six districts in Bangladesh: Narayanganj, Moulvibazar, Kumilla, Potuakhali, Satkhira, and Rajshahi. The locations were purposively selected to properly represent the geographical divergence. Respondents consisted of three parties. The first party included government officials—the procuring entities (PEs), while the second party included suppliers, contractors, and consultants who sell goods, works, and services to the government. And the third party included common citizens. Moreover, we conducted focus group discussions (FGDs) with the government officials directly involved in public procurement and also interviewed them individually. Relevant literature was also reviewed for this study.
Findings and Recommendations
Our study sheds light on many cross-cutting issues that negatively affect public procurement in Bangladesh. One of such issues is tied to the Public Procurement Act (PPA), 2006 and Public Procurement Rules (PPR), 2008. Bidders accuse senior government officials of delivering decisions that are inconsistent with PPA/PPR. Meanwhile, government officials point to the conflicts between PPA and PPR. We also found that misinterpreting the needs and formulating a budget for the subsequent year based on that misinterpretation, also opens door to corruption. Moreover, some of the PEs also lack efficiency in estimating the cost. Bidders seize this opportunity to inflate the prices of the materials in the cost estimation. It was also found that government officials sometimes manipulate the specification process to favour one bidder over another. The tendering authority in Bangladesh, we found, does not guarantee timely distribution of the allocated fund which affects the quality of construction work. The most cited allegation regarding the bidding process, however, is the lack of tender notice and advertisement. Contractors and civil society members complained that not publishing tender notices in the newspaper allows room for corruption. One further allegation is related to communication. Bidders alleged that in the case of foreign-funded projects, tender documents and schedules are written in English, which hinders effective communication. In some cases, there is a lack of transparency in appointing expert consultants which result in poor monitoring job. Meanwhile, many contractors borrow their fellow contractors’ license by paying a bribe or commission.
To help reduce the chances of irregularities and corruption, a separate office can be established that will manage all public procurement-related issues. Maintaining a strict timeline as per the PPR is also necessary. To curb the rent-seeking practices of government officials and politicians, sufficient legal and systemic safeguards are needed. Engaging local citizens as a watchdog can be helpful in this regard. The tendering authority needs to properly estimate the price in the tender documents and distribute the committed funds timely. Tender notices should be published in the local newspaper on a priority basis. And finally, the introduction of the electric government procurement (e-GP) can bring significant changes in the system.
