Corruption risks in procurement
In March 2023, the Commission began examining the risks of corruption in public sector procurement.
Public sector procurement involves public authorities acquiring goods and services through complex processes, often involving significant sums of public money and interactions between employees and suppliers. The South Australian government spends more than $11 billion on goods, services and construction works annually.
Public procurement is highly susceptible to corruption. This corruption primarily revolves around the misuse of power for personal gain. This abuse can have severe consequences, including the diversion of public funds for private benefit, the establishment of corrupt contracts that persist for years, and the potential for incomplete or subpar projects.
To address the substantial corruption risks associated in public sector procurement, the Commission invited public officers and suppliers involved in public sector procurement to share their views and experiences in a confidential online survey. The survey responses are examined in the report, Public Sector Procurement.
Published 24 August 2023
One in four procurement officers believed that corruption is a moderate or major problem in public sector procurement. Approximately of third of suppliers had been deterred from bidding due to concerns about potential corruption or impropriety.
Procurement officers generally held more positive views about the integrity of public sector procurement than suppliers, possibly due to their closer involvement in the process. However, procurement officers may underestimate corruption risks.
Some officers demonstrated inadequate knowledge of corruption risks, including not being aware of restrictions on the acceptance of gifts or the requirement that confidentiality agreements must be completed prior to evaluating tenders. Public officers must understand corruption risks across all types of procurement and throughout the procurement life cycle.
Although only a small proportion of respondents reported observing suspicious behaviour, the potential harm to the public interest is significant given the substantial monetary involvement and the essential nature of procured goods and services.
The survey shows that not all potential instances of corruption are being reported. Suppliers working with public authorities may not fully recognise their designation as public officers, leading to an incomplete understanding of their reporting obligations.
The Commission strongly encourages anyone with suspicions of corruption to make a report to the Office for Public Integrity.
The Commission will release a subsequent report later in the year, delving deeper into corruption risks and offering recommendations. Additionally, selected agencies might receive personalised feedback to enhance their procurement processes and prevent corruption.
