1.

0 INTRODUCTION

A newspaper piece published on the 9th of April 2021 and was written by the executive
director of the Socio-Economic Research Centre, Lee Heng Guie entitled “Insight – Let’s
fix the public procurement system” is centered on the reforms that can be done to the
Malaysian public procurement system. Following the multiple exploitations done in the
public procurement namely fix-pricing in bidding, favoritism, and bestowing contracts to
ineligible individuals, the author expressed its negative effect on the overall process of
administering projects. Later, the National Anti-Corruption Procurement (NACP) plans to
enact the Government Procurement Act (GPA) by 2023. In the belief that the public and
stakeholders need to be engaged in the process of reforming the GPA, a list of
recommendations to better enhance the public procurement system can be found at the
end of the article.

2.0 ABSTRACT

Reformation is the basis of improvements and Malaysia’s procurement rules are in need
of it. New issues will keep on resurfacing and developing. Hence the need for the public
procurement system to evolve continuously in order to address any upcoming or deep-
rooted issues. Government procurement is the heart of an effective, ethical and efficient
delivery of procurement. All policies and procedures of procurement reckon with the
nation’s needs while hindering any form of abuse that can take place in the process of
procurement. This procurement analysis paper will provide a comprehensive yet simple
recap on a particular piece of newspaper written by Lee Heng Guie on the need for
reformation in the Malaysian public procurement system. Starting off the headline with
the long history of Malaysia being indulged in procurement corruption like fix-pricing in
bidding, favoritism, and bestowing contracts to ineligible individuals, the newspaper then
mentions the government’s plan in introducing a reformed set of rules to address the
procurement abuse. Since the enactment of the reformed rules will take place roughly
one year starting from the published date of the news which is 2023, the author list
down a few fundamental principles for a modern procurement system.
3.0 CORRUPTION AND THE REFORMATION OF THE PUBLIC PROCUREMENT
SYSTEM

The main point of this newspaper piece is the reformation of the public procurement
system through the establishment of the Government Procurement Act (GPA) in 2019
which is expected to be enacted in 2023. The reformation is, however, required in order
to address the various corruption that occurred in the public procurement system. After
all, one of the objectives of government procurement is to ensure ethical, effective, and
efficient procurement practices. In an effort to contribute to the government’s discussions
related to the GPA as a stakeholder, a few fundamental principles for a modern
procurement system have been listed in the news.

The first suggested principle is to maintain a bidding procedure that is transparent,

market competitive, and fair, and restricting direct negotiation. In addition, practices of
procurement activities are also required to be publicly disclosed. This suggestion
complements other studies made on this matter. A study by Shan et al. (2016) stated that
in the bidding evaluation, opacity is a major concern. Two measures that could be taken
into account in order to provide transparency are conducting an open hearing before
executing the project and publicizing the announcement related to the information of the
project.

The second suggestion is to continuously enhance the e-procurement system.

Malaysia has its own Electronic Government Portal (EGP) specifically for the
procurement process called eProcurement Portal. EGP is proven to increase
transparency and decrease corruption (Soong et al., 2020). Soong et al. (2020) also find
that one of the factors influencing Malaysian small and medium enterprises (SMEs)
usage of EGP is the user-friendly interface. Ergo the call for improvement of the current
e-procurement system.

Next, establish a Central Purchasing Body (CPB) that covers common interest’s
services and goods (i.e., pharmaceuticals and office supplies) to minimize transaction
costs and produce better prices. While CPB can benefit that certain matter, it’s best not to
rely too much on CBP since it will significantly affect small and medium enterprises
(SMEs) (Sanchez-Graells, 2020), and intrinsically go against the government
procurement objective; to encourage and stimulate local industries’ growth and
development by maximizing the best use of local materials and resources.

The following suggestion calls for the publicization of records and documents (i.e.,
financial statements, accounting records, and books) for ease of access and greater
transparency. In line with this matter, the eProcurement Portal established by the
Malaysian government is one of the efforts taken to promote public transparency. An old
study conducted in 2015 (Kassim & Hussin) on the efficiency of the eProcurement system
acquired a majority of positive influence in terms of transparency. Be that as it may, a
recent study conducted six years later, specifically in five areas of transparency (i.e.,
contact information, freshness, ownership, citizen consequences, and organizational
information) results in a better insight on the transparency level of the said system.
Apparently, only the freshness and citizen consequences are fully disclosed while the rest
of the areas are not disclosed entirely (Ahmad et al., 2021). This shows how transparency
is still sufficient and in need of further attention.

On top of that, it’s also suggested that the public procurement decision employ
predetermined criteria and objectives that can assist future verifications on the correct
implementation of the procedures and rules. Based on the publicly published government
procurement, the criteria and objectives for different procurement methods and
procedures are present and clear. This particular suggestion requires extra elaboration
for further discussion.

For the sixth suggestion, the author proposes to design a system that can indicate
risks and includes red flags that show possible procurement issues. Designing a risk
indicator system is complex, yet not impossible. A researcher has managed to develop a
procurement risk indicator system that can determine the effect of corruption on
procurement results and investigate the link between procurement-related suppliers and
high-risk contracts (Milani, 2019). It would be beneficial for the government to have such
a system that can contribute significantly to annihilating corruption.

In order to increase the integrity of the officers who manage the procurement
process, forensic auditing skills and national training need to be developed as a way to
enrich professionality. Muhamad & A. Gani (2020) have stated the two factors that lead to
bribery in Malaysia; people who have power (political, authority, or controlling power) and
people with intention or desire to corrupt, tend to get involved in corruption. As a
consequence, a well-developed integrity system is required. Most Malaysian public
officials are also optimistic about the integrity and ethics system integration. Therefore,
the suggestion made on this matter is noteworthy since it’s demanded by other
stakeholders.

Last but not least, a protection mechanism that protects whistle-blowers who monitor
and detect misconduct in the public procurement process. While the act of whistleblowing
is considered heroic, they’re also seen as a traitor in the eyes of the wrongdoers
(Nurhidayat & Kusumasari, 2018). On top of that, whistle-blowers are in constant dilemma
to expose any fraud detected. Once reported, they won’t have it easy as they have to
face retaliation, reprisals, and resistance from the wrongdoers. That being the case,
whistle-blowers need a stronger protection mechanism to encourage people to expose
wrongdoings and decrease overall crime in the procurement system.

Finally, the establishment of the public procurement’s Independent Oversight

Commission to oversee any corruption and abuse in the public procurement process,
form stricter punitive measures towards power abuse in contract issuance, and
contractors who neglect projects like debarring or blacklisting. Earlier in 2021, the
government issued a bill for an Independent Police Conduct Commission (IPCC).
However, it was rejected by Amnesty International Malaysia due to the many flaws it has
(Amnesty International Malaysia, 2021). In line with that, the establishment of the public
procurement’s independent oversight commission won’t be easy and requires an
accountable independent mechanism that can ensure appropriate procurement oversight.
On the other hand, the suggestion related to stricter punitive measures is supported by a
study (Muhamad & A. Gani, 2020), which shows its relevance and significance in
reforming the public procurement system.
4.0 STRENGTHS AND WEAKNESSES

Asddaf
5.0 REFERENCES

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https://doi.org/10.1108/jfra-07-2021-0181

Amnesty International Malaysia. (2021, October 27). Malaysia: IPCC bill is a step

backwards for police accountability - Amnesty Malaysia. Amnesty Malaysia.

https://www.amnesty.my/2021/10/27/malaysia-ipcc-bill-is-a-step-backwards-for-

police-accountability/

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_on_procurement_performance_an_assessment_of_Italian_public_work_contrac

ts_and_suppliers

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