Liberia Institute of

Public Administration

Procurement
Management Course

Credits: 3hours
Procurement Principles & Ethical
Issues
Presented by: Jefferson K. Dolo
 Procurement Principles & Ethical Issues

Learning Objectives
Upon Completion of this Unit, Participants are expected to:
 Understand Procurement Principles and Ethical issues in
Procurement.
 Apply Procurement Principles as practitioners
 Be aware of red-flags and prevent being entrap into unethical
conducts
 Etc.
 Introduction

Procurement is the engine that sets entire supply chains and

their organisations in motion.
 Hence, how a procurement function handles itself, and its
activities, sets the tone for all events that follow, right up to
the final delivery of goods and services to the end-user. &
Ethical Issues
 Introduction
Principles are commonly used as the foundation of a society,
system, philosophy, science or profession. As such, principles
aren't necessarily related to morals and can be used to describe a
business strategy or scientific law.

Ethics on the other hand, are knowledge and moral principles

governing or influencing conduct. The branch of knowledge
concerned with moral principles (oxford dictionary)
 Basic Principles of Public Procurement
Public procurement principles are foundational to the
management of public procurement and set the framework
 for a code of conduct (PPC Act Sections 130 & 131).
 that procurement practitioners are accountable in their fiduciary
role
Some of the fundamental principles of public procurement
Transparency- all stakeholders must be informed about entire
process(confidentiality)
Value For Money-the procurement processes should be carried out
to achieve the most advantageous combination of cost, quality and
sustainability over the life cycle of the project.
Integrity- reliability of the practitioners (honesty) and processes
Some of the fundamental principles of public procurement
Cont’d
Openness- open to all qualified organizations and individuals
Fairness - treating all bidders equally
Competition - all eligible organizations and individuals
Accountability - practitioners responsible for their actions and
decisions
 Effectiveness- Public sector entities should maximize the
contribution to the commercial, regulatory and socio-economic
goals of Government in a balanced manner appropriate to the
procurement requirement.
 Bed Rocks for Ethical Conduct in Procurement
 Practice integrity
 Avoid conflicts of interest and personal enrichment
 Treat suppliers equally and fairly, and
 comply with legal and other obligations.
Scenarios of Ethical issues in Procurement
How would you deal with the following situations in
procurement?
1. You are responsible for the procurement of stationery supplies
for your entity. A potential supplier sends you its bid together
with a gift of an expensive-looking shoes with the supplier’s
logo on it.
 Unethical Issues in Procurement
Illegal or immoral practices that bordered on Ethical Issues in
procurement may include:
 Bribery- Unethical buyers may use kickbacks to influence
contract negotiation or award of a contract.
Extortion- Asking for a bribe or similar illicit payment. The
request may or may not be accompanied by a menace
Coercion-Threats against or pressure put on individuals with the
same objective as bribery, to gain support for a supplier or
contract negotiation.
 Unethical Issues in Procurement
Favoritism- also known as nepotism, in which individuals give
undue preference or negotiating advantage to a supplier who is a
friend or part of the same family.
Illegal sourcing- suppliers offer goods or services
misrepresented or produced illegally or immorally, whether
because of the materials in use. Stolen and black-market supplies
are common examples.
Traffic of influence- The exchange of a contract award (or
support for the award) for a favor or preferential treatment by the
other party or another individual or organization.
The Impact of Poor Ethical Practice in Procurement
In this information-rich and communication-enabled dispensation, bad press
can spread rapidly. Hence,
unsatisfactory procurement ethics can be damaging for public relations if
those ethical issues become known
Consumers and other members of society exert considerable power in the
form of associations, forums, and networks, may use same to punish
violators in the following forms:
 Boycott of entity’s procurement processes
 Voting government out of power
 The Impact of Poor Ethical Practice in Procurement
For example:
If senior management is unaware of the lack of ethics, takes
little or no action, or condones it (actively supports unethical
behavior) , then it is inherently inept or corrupt.
Inefficiency of the procurement process and the effect on overall
organizational performance
Rogue procurement- non-procurement staff may initiate
procurement efforts of their own, which are, in turn, likely to
suffer from inefficiency, reduced value to the organization,
unethical behavior, or any combination of these.
 Red Flag of Ethical Issues in Procurement
Detecting and understanding the problem is essential for putting
solutions in place. Signals that something is inappropriate can be
categorized as followed:
Excessive secrecy- this can range from missing files and records
to resistance to audits and reluctance to delegate or run
competitive tenders.
Suspect procedures- normal procedures are ignored, or
appropriate checks and balances are missing
Inappropriate life or work styles- buyers’ lifestyles may be out
of keeping with their level in an entity.
 Red Flag of Ethical Issues in Procurement
The splitting of large contracts into many small packages – this
is sometimes done to minimize visibility and reduce scrutiny.
High prices or substandard service levels – either of these issues
might indicate that bribery is taking place and receiving
financial support.
Suspicious bidding patterns – If you notice many similarities in
the details of competing bids against a request for tender, it
could be evidence of a collusive bidding ring.
 Mitigating Ethical Issues in Procurement
A written Code of Conduct/ ethics policy remains the starting
point for raising and maintaining standards.
Employees at all levels involved in procurement need to know
what is expected of them, and a written policy helps resolve any
arguments
Senior management buy-in of the policy is essential and they
must act according to it. (the organizational culture rest on
senior management).
Training in applying the policy should be provided, with
refresher training at suitable intervals.
 Conclusion
Finally, no matter how hard policy makers try, they will never specify in
law, code, regulation, rule, or other written requirements everything that a
procurement officer needs to know regarding what is allowed or
appropriate and what is prohibited or shunned. It is necessary for the
procurement officers to understand what the law or rule is intended to
accomplish..
 Food for Thought
“Everything rises and falls on leadership.”
John C. Maxwell
 QUESTIONS & ANSWERS

GOOD LUCK!!!

AND

THANK YOU FOR LISTENING

Sources: PPCC Training Manual, Procurement Classroom & KCA University-2022