Module Procurement Principles and Ethics 27 June 2018

MODULE 3
PROCUREMENT PRINCIPLES
AND ETHICS
Prepared by GIMPA Consultancy

MODULE 3 Public Procurement Authority (PPA), Ghana
MODULE OBJECTIVES
 By the end of this module, participants will be able to:
• Explain basic procurement principles and the underlying
rules that support these principles – professionalism,
transparency, value for money, accountability, fairness,
competitiveness etc
• Apply the codes of conduct in the performance of their
procurement functions

BASIC OBJECTIVES OF GOOD PROCUREMENT
The basic objectives of good procurement are:
• To obtain the Right Quality of goods, works, or services
• From the Right Source
• In the Right Quantity
• At the Right Price
• Delivered to the Right Place
• At the Right Time
• Whilst achieving the lowest total cost.

PRINCIPLES/FACTORS AFFECTING ACHIEVEMENT OF
PROCUREMENT OBJECTIVES
The following principles/factors affect the achievement of
good procurement objectives:
• Professionalism
• Transparency
• Value for money (Efficiency and Economy)
• Competitiveness
• Accountability
• Fairness
• Sustainability
• Ethical approach
PROCUREMENT PRINCIPLES

PROFESSIONALISM
 Professionalism is the discipline whereby educated,
experienced and responsible procurement officers make
informed decisions regarding purchase operations.
 The role of procurement professionals is critical to Ghana’s
economic development.
 It is in the recognition of this fact that the Public
Procurement Authority’s object includes:
‘‘the professional development, promotion and support for individuals
engaged in public procurement and ensure adherence by the trained
persons to ethical standards”. (AB Adjei, Chief Executive, PPA July 2006).
TRANSPARENCY
Transparency refers to the level of openness of a procurement process
and the idea that procurement procedures should be characterized by
clear rules and by means to verify that such rules were followed in the
procurement process.
Transparency means that the same rules apply to all suppliers,
contractors, consultants/service providers for goods, works and
services respectively and that these rules are publicized as the basis of
procurement decisions prior to their use.
Transparency enables the creation of open and fair procedures.
It encourages inward investment and competitiveness as the public
sector is seen as a responsible business partner.
TRANSPARENCY (Cont’d)
Transparency can be achieved in various phases of a public procurement
process:
• Publicity of contract opportunities
• Publicity for the rules governing each procurement procedure
• Rules relating to the clarification of tenders
• Public opening of tenders
• Debriefing
• Publication of contract awards
• Limits to control the discretion of procuring entities or officers in making
public procurement decisions
• The possibility for interested parties to verify the application of the public
procurement rules as publicised
VALUE FOR MONEY (EFFICIENCY AND ECONOMY)
Value for Money (VFM) is the optimum combination of whole life cost and
quality to meet the customer’s requirements. It is reflected in the price of the
item or service procured.
The essence of the Public Procurement Authority’s object is to “secure a
judicious, economic and efficient use of state resources in public
procurement’’.
Value for Money (VFM) is a critical measure of the effectiveness of the
procurement process, its outputs and outcomes.
Achieving VFM requires a strategic and integrated approach to procurement.
VFM may be compromised if the Public Procurement Act and Regulations
are not followed.

VALUE FOR MONEY (Cont’d)
The key aspects of VFM cover the following:
• Ensuring the goods, works or services acquired are fit for the
intended purpose. This means that:
 They can meet the requirements for the task in question, and
 They are not over-specified
• Ensuring that the goods, works and services are acquired at the
right price
• Concluding an arrangement to secure what is needed on the best
contractual terms
• Ensuring the contracting parties fulfil their parts of their
obligations under the terms and conditions of the contract
COMPETITIVENESS
Competitiveness means actively encouraging greater suppliers,
contractors, consultants and/ or service providers’ participation in
the tendering process through advertising, sourcing reviews,
prequalification and transparent procedures.
The merits of competitiveness include:
• Potential for cost savings and achievement of value for money
• Increases the potential for supplier, contractor, consultant and/or
service provider’s base
• Greater awareness of new developments
• Greater understanding of the Act and confidence in public sector
procurement
ACCOUNTABILITY
 Accountability can be explained as the process of holding an
individual or an organization fully responsible for all aspects of the
procurement decision making process over which they exert authority.
Relevant provisions under Act 663 as amended are sections 17(1) and
18(1) which place obligations on the head of entity and officers to
whom authority is delegated to be accountable.
The merits of accountability include:
• Strengthens the perception of transparency and fairness
• Reduces the incidence of corruption
• Increases the need for actors within the procurement process to take
ownership and responsibility for their actions and decisions

FAIRNESS
 Fairness in public procurement implies showing
consideration and impartibility in all stages of the procurement
process, such as demonstrating equality in tender evaluations.
Fairness results in:
• Development of mutual trust
• Instils confidence in the procurement process which ultimately
promotes increased participation by tenderers for contract
opportunities

FAIRNESS
 Fairness in public procurement implies showing
consideration and impartibility in all stages of the procurement
process, such as demonstrating equality in tender evaluations.
Fairness results in:
• Development of mutual trust
• Instils confidence in the procurement process which ultimately
promotes increased participation by tenderers for contract
opportunities

EFFICIENCY
Efficient public procurement means:
• A system which operates in a timely manner, with a
minimum bureaucracy, while being responsive to the
needs of the ultimate users of the goods, works or services
procured.
• Efficiency covers the optimum utilization of scare
resources to achieve desired results.

ETHICAL APPROACH
Ethics is concerned with moral principles and values
which govern our beliefs, decisions, actions and
behaviours.
Ethical approach implies exemplary approach to all
procurement processes that cannot be questioned or
criticized.

IMPORTANCE OF ETHICS
Ethics is important in procurement for the following reasons:
• Procurement staff are the representatives of their organization in its
dealing with suppliers, contractors, consultants and/or service
providers.
• Sound ethical conduct in dealing with suppliers contractors,
consultants and/or service providers is essential to the creation of good
relationships and the establishment of supplier goodwill
• It is impossible to claim professional status for procurement without
reference to a consideration of its ethical aspects.
• Procurement staff are probably more exposed to the temptation to act
unethically than most other employees.
SUSTAINABILITY
The introduction of sustainability into Ghana’s public procurement
regime is to ensure that in making procurement decisions today,
procurement entities should be mindful of the implications of their
decisions on future generations.
 “Sustainable procurement is all about taking environmental, social and
economic factors into account in procurement decisions”
“It’s about looking at what your products are made of, where they come
from and who has made them” (HEPS Sustainable Purchasing Guidance)
 Sustainable procurement is about laws, policies and practices to
integrate economic, social and environmental risks into public
procurement processes and decisions.

CODE OF CONDUCT
Section 86 of the Act 663 as amended requires the compilation and
publication of a code of conduct by PPA.
The codes of conduct shall apply to each official of a procurement
entity, the members of evaluation panel, members of tender review
committees, tenderers, suppliers, contractors, consultants and
service providers. The codes of conduct shall address the following:
• Confidential information
• Conflict of Interest
• Fraud and Corruption
• Gifts and Entertainment
• Training

Confidential information
Officials must not disclose to any third party

confidential or proprietary information.

Conflicts of interest in Procurement
Conflict of Interest can be explained as “A situation where personal or

business interests of a party could adversely affect the outcome of a
procurement transaction.”
Public procurement officials must avoid conflicts between their personal
financial interests and their official duties.
Any instances of conflict of interest should immediately be
disclosed/declared prior to the commencement of a procurement process.
Tenderers have an obligation to disclose any situation of actual or potential
conflict that impacts their capacity to serve the best interest of the
procurement entity or that may reasonably be perceived as having this effect.
 Failure to disclose said situations may lead to the disqualification of the
Tenderer or the termination of the Contract.
Fraud and Corruption
“A fraudulent practice is any act or omission, including a misrepresentation, that
knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial or
other benefit or to avoid an obligation.”
“A corrupt practice is the offering, giving, receiving or soliciting, directly or indirectly,
anything of value to influence improperly the actions of another party.”
Procurement Entities and tenderers, suppliers, contractors, consultants, technical service
providers and their agents and any personnel thereof, are required to observe the highest
standard of ethics during the procurement and execution of public-financed contracts.
Section 93 of Public Procurement Act, 2003 (Act 663) as amended on Corrupt Practices,
states the following:
1. “Entities and participants in a procurement process shall, in undertaking procurement activities,
abide by the provisions of article 284 of the Constitution”.
2. “An act amounts to a corrupt practice if so construed within the meaning of corruption as
defined in the Criminal Offences Act,1960 (Act 29)”.

Common Forms of Corrupt and Fraudulent Practices
 “Coercive practice” means impairing or harming, or threatening to
impair or harm, directly or indirectly, any party or the property of any
party, to influence the actions of a party in connection with the
implementation of any contract supported, in whole or in part,
including such actions taken in connection with the execution of a
contract.
 “Collusive practice” means a tacit or explicit agreement between
two or more parties to perform a coercive, corrupt, fraudulent,
obstructive or prohibited practice, including any such agreement
designed to establish prices at artificial, non-competitive levels or to
otherwise deprive the Employer of the benefits of free and open
competition.
Common Forms of Corrupt and Fraudulent Practices (Cont’d)
“Obstructive practice” means any act taken in connection with
the implementation of any contract supported, in whole or in part:
• That results in the destroying, falsifying, altering or concealing of
evidence or making false statement(s) to investigators or any official in
order to impede an investigation into allegations of a coercive, collusive,
corrupt, fraudulent or prohibited practice,
• That threatens, harasses or intimidates any party to prevent him or her
from either disclosing his or her knowledge of matters relevant to an
investigation or from pursuing the investigation and/or
• Intended to impede the conduct of an inspection and/or the exercise of
audit or investigation rights provided under Act 663 as amended and
related regulations, manual, agreements and standard tender documents;

Common Forms of Corrupt and Fraudulent Practices (Cont’d)
“Prohibited practice” means any action that violates
Compliance with Anti-Corruption, Anti-Money
Laundering, Terrorist Financing, and Trafficking of
Persons, Statutes and Other Restrictions of the United
Nations.

Gifts and Entertainment
Officials must not accept directly or indirectly, any gift
(including any gratuity favour, entertainment, loan or
other consideration) with a value in excess of a certain
amount of money (which should be set at a low level,
having regard to the overall situation in the country
concerned from any person or entity which has or seeks
to obtain a contract with their own agency.

Training
 It is important to institute screening procedures and training
requirements aimed at building the capacities of key actors in
ethics of procurement.
Such training programmes could cover:
• Conflict of interest
• Bribery
• Fraud and corruption
• Child and forced labour
• Money laundering
• Terrorism financing
• Modern slavery
RESULT OF UPHOLDING PROCUREMENT PRINCIPLES
Procurement principles and ethics will result in the

following:
• Increased efficiency in the procurement functions
• Procurement operations become more effective
• Enhanced profile of procurement
• Improved achievement of objectives
• Professionalism of procurement in Ghana
• Reduction in bribery and corruption and thereby
achieving value for money in public procurement

Examples of Unethical Conduct

Revealing confidential or “inside information” either directly or indirectly to any tenderer or
prospective tenderer;

Discussing a procurement with any tenderer or prospective tenderer outside the official rules and
procedures for conducting procurements;

Favouring or discriminating against any tenderer or prospective tenderer in the drafting of technical
specifications or standards or the evaluation of tenders;

Destroying, damaging, hiding, removing, or improperly changing any official procurement document;

Accepting or requesting money, travel, meals, entertainment, gifts, favours, discounts or anything of
material value from tenderers or prospective tenderers;

Discussing or accepting future employment with a tenderer or prospective tenderer;

Requesting any other Public Servant or Government official representing the Procurement Entity in a
procurement to violate the public procurement rules or procedures;

Ignoring evidence that the Code of Ethics has been violated by a member of the Tender Committee,
Public Servant or other employee or representative of the Procurement Entity;

Ignoring illegal or unethical activity by tenderers or prospective tenderers, including any offer of
personal inducements or rewards.

Obligations of Public Servants
The guiding principles of ethical behaviour are:
• Impartiality
• Independence
• Integrity
Ethical behaviour must be promoted and supported by appropriate systems and procedures
Systems and strict adherence to procedures alone cannot create an ethical and accountable
procurement function
Public Servants involved in procurement are obliged to follow the Civil Service Code and the
regulations governing public procurement.
 All procurement activities must be carried out in a manner above reproach, with complete
impartiality and with no preferential treatment.
The procurement process must allow suppliers, contractors and consultants to compete for
business on a fair basis
Public officials associated with the procurement function must be responsible by protecting the
integrity of the procurement process and maintaining fairness
Responsibilities of Officers
Senior officers in a Procurement Entity have responsibility to:
• Provide instructions and guidance to staff, especially where they may be exposed
to opportunities for accusations of fraud or corruption;
• Encourage staff to follow ethical principles and practices and create an
environment where transparency and openness are the standard;
• Ensure that all staff comply with instructions and guidelines, including the
maintenance of documented records;
• Set appropriate levels of financial delegation, and ensure a proper separation and
rotation of duties.
Junior officers in a Procurement Entity have responsibility to:
• Follow management instructions and procedural guidelines;
• Be alert to and report any indications of unethical behaviour;
• Seek guidance from a manager or auditor on any concerns that may arise.

Responsibilities of the Private Sector
The Private Sector is not exempt from responsibility to act ethically and transparently
in procurement proceedings with the Government of Ghana.
This message is to be reinforced by requiring tenderers to sign a formal declaration
before participating in any procurement process:
“I hereby certify that I and all officers of the Company which I
represent will uphold the highest ethical standards in doing business
with the Government of Ghana. We will not attempt to bribe government
officials with money or other goods or services; we will not request
favourable treatment and we will not seek information about
competitors or other information regarding the procurement process. I
understand that if I, or other officers of the Company which I represent
are found to have breached this commitment, that sanctions will be
made against the Company, including being debarred from doing
business with the Government of Ghana for a periodPublicofProcurement
5 years.”
MODULE 3 Authority (PPA), Ghana
Sanctions for Non-compliance with Ethical Standards
Adherence to the provisions of Act 663 as amended and Regulations by Public Officials
is obligatory and failure to do so will be considered an offence subject to sanctions.
The level of sanctions will be published separately and will be graduated depending on
the offence.
Any official suspected of non-adherence to the rules and regulations will be suspended
and his or her benefits, including salary, withheld pending investigation. Officials found
misappropriating government funds, regardless of the value, will be summarily dismissed.
Other offences involving non-adherence to the rules and regulations, including negligence
and irresponsibility will result in sanctions as specified in the Act 663 as amended.
Any tenderer, supplier, contractor or consultant who attempts to influence a procurement
process, or the administration of a contract by any unfair method, will be subject to
sanctions.
This may include debarment of the company from Government contracts for a period of
five years, in addition to any remedies that may be sought in a court of law

QUESTIONS & DISCUSSIONS
MODULE 3 – EXERCISE:

Module Procurement Principles and Ethics 27 June 2018

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Module Procurement Principles and Ethics 27 June 2018

Uploaded by

Copyright:

Available Formats

MODULE 3

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Officials must not disclose to any third party

Prepared by GIMPA Consultancy

Conflict of Interest can be explained as “A situation where personal or

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Procurement principles and ethics will result in the

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

Prepared by GIMPA Consultancy

You might also like