Corruption prevention, fairness and probity

Government has an obligation to ensure its procurement conduct is always fair, ethical, transparent and probity rich. Clear, visible and meaningful commitments to fairness encourage suppliers to want to do business with government.

Agencies and agency staff are accountable for procurement decisions and safeguarding the probity of procurement activities at all times.

Corruption prevention

Procurement is a business area that is vulnerable to real and perceived corruption and maladministration.

Written documents and associated training are the basic controls that agencies use to achieve consistency and quality in procurement. These controls drive compliance through standard procedures that work well to manage predictable and repeatable procurement risks.

The challenge for managers is to maintain control of a situation even when it is unpredictable – and procurement, and certainly corruption, can sometimes be difficult to predict. This is why it is essential that agency corruption controls also become embedded in business practices and decision-making.

The Independent Commission Against Corruption (ICAC) has a range of publications that provide advice on managing corruption risks in procurement. The report 'Corruption and integrity in the NSW public sector' considers the factors that contribute to corruption and other forms of serious misconduct, and identifies high risk areas and emerging trends. 

For more information on corruption prevention and ICAC's activities, please visit the ICAC’s website or contact the Commission on 02 8281 5999 or 1800 463 909 (toll free) to request corruption prevention advice.

Fairness and probity

Managing procurement with fairness and probity

Agencies and public sector officers and employees have statutory obligations which affect how procurement activities are managed.

In ensuring that procurement processes are conducted fairly, agencies should:

  • develop internal controls, including officer delegations and specific accountabilities
  • publish data and performance reports (‘openness’)
  • monitor compliance with legal, policy and reporting requirements
  • review their policies every two years
  • procurement management in corporate documents, such as codes of conduct
  • train relevant employees in procurement, managing conflicts of interest and other corruption-prevention policies and procedures, to ensure they are aware of their accountabilities
  • include procurement as a risk area in the agency's internal audit and corruption risk management processes.

The procurement management framework should embed consistent and fair processes that:

  • treat all suppliers fairly and consistently
  • clearly explain procurement procedures
  • make it easy for all suppliers, including small and medium enterprises, to do business with government
  • ensure the agency does not engage with the market without an intention to proceed, including budget approvals, except for market testing and research
  • provide ways to report conduct or behaviour that is inconsistent with legal obligations, policy and principles
  • safeguard tender security, including protecting the confidential information of suppliers.

Ensuring the impartiality and integrity of processes includes ensuring procurement staff and buyers:

  • effectively manage conflicts of interest, real or perceived
  • maintain impartiality and conduct processes with honesty and integrity
  • ensure there is a clear separation between assessment and approvals
  • are accountable, transparent and reasonable.

Probity is a critical consideration in procurement, but should not be used as a ‘road-block’ to innovation or collaborative procurement methods. 

Examples of specific areas of procurement risk

The following activities carry an inherently higher degree of risk and should be carefully managed: 

  • changes in specification requirements
  • compliance with contract conditions
  • meeting with suppliers
  • insufficient, inadequate or contradictory documentation
  • supplier-initiated approaches
  • gifts and benefits
  • managing ongoing relationships with suppliers after contract award.

Visit the procurement page on the ICAC’s website for more information on how to manage procurement related risks.

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