Probity in Procurement

As the financial year comes to an end, government agencies are spending at the rate of knots and Procurement folk are feeling the number of RFT’s coming through their areas. As I say each year, “the quicker the Procurement, the more risk we could be inheriting”. I think it is timely to discuss Probity and it’s role for individuals as well as organisations.

For individuals, probity is about understanding the limits of their authority and powers and acting within those limits. Public servants need to be conscious at all times of the need to uphold the highest standards of conduct in their dealings on the government’s behalf, which includes acting with integrity and avoiding conflicts of interest.

Having a conflict of interest is not morally wrong or unethical in itself. The challenge is in recognising and managing them. Public servants should also be aware of the need to avoid any perception of bias in their dealings. This requires an open mind in decision-making and acting fairly and impartially in good faith.

It is helpful to recognise what the impediments to ethical decision-making are and to know how to reach ethical decisions. For example, such impediments can include having insufficient or incorrect facts, not having clear goals, pride or fear (leading to individuals not asking questions, or not seeking help, or not being prepared to make the hard, but right, choices), pressure from (a perceived) lack of time, and tunnel vision.

So, when making decisions, public servants should think about:

  • whether they have all the relevant facts;
  • who is likely to be affected by the decision;
  • what the options are;
  • what the likely consequences of those options are;
  • whether relevant persons have been consulted;
  • whether they would be happy if the decision were open to public scrutiny;
  • how they would feel if they were the subject of the decision; and
  • whether the decision is consistent with their values and those of their organisation.

A failure by government agencies to uphold proper standards of conduct and probity has consequences. These include possible employment implications and being the potential subject of ‘watch-dog’ investigations.

For organisations, probity is about setting values at an organisation level, and then implementing those values through policies and codes of practice. It is then for managers to demonstrate those values through leadership, to positively reinforce the values and also to ensure compliance with, and enforcement of, the values.

The Auditor-General released an updated Public Sector Governance Better Practice Guide in June 2014. In his foreword, the Auditor-General states that effective governance can make a real difference to the performance of public sector entities and to the outcomes sought by the government. In particular:

Achieving effective governance depends on developing and maintaining appropriate and accepted governance structures and frameworks; it also depends heavily on the application of appropriate governance choices and a commitment to making them work. It is the positive interaction between the ‘hard’ and ‘soft’ elements of governance – the structural and people elements – that leads to improved performance. In this respect, strong leadership is a critical driver for success; it can ensure appropriate governance arrangements are in place and foster ownership of the entity’s goals and strategies by its staff.

So, first and foremost, government agencies should establish an ethical culture, followed by a raft of other measures.

At another level, there are the watch-dogs, being the public sector bodies charged with oversight and investigation of standards and behaviours. These bodies can include:

  • the Ombudsman, who investigates complaints about administration
  • the Auditor-General, who oversees the management of resources in the public sector
  • an integrity agency, responsible for investigating and exposing misconduct and corruption.

There is no doubt that there has been an increased scrutiny of government in recent times, particularly of its governance and procurement processes. There are consequences if probity is ignored and so it is in everyone’s interests that the right culture be established. The responsibility on government agencies is to promote high standards of integrity, demonstrate leadership through their own actions and through documented policies and procedures, and identify and address unacceptable practices. This involves actions by both the organisation and individuals.

Final Thought…

We, as procurement professionals, should regularly engender discussion on probity and ethics and demonstrate leadership by example to our peers and staff – at all levels of government. Unethical behaviours and their effect on value for money is a topic worth pursuing in the workplace. Arguably the issues of probity and ethics should be as actively discussed in the private sector procurement setting.

At what point should procurement professionals (and training facilitators) report flagrant breaches of probity and ethics that come to their notice? My view is each and every time. As long as I walk this earth, I will be walking it knowing I have done my job and my integrity is intact. Procurement is not always about the increased efficiency, cost savings and good news stories, it’s also about making hard decisions to stop a Procurement halfway through evaluation, dealing with belligerent customers and knowing when to walk away from the negotiation table.

If it smells like fish, chances are it’s fish. Same principle applies to probity, if it feels wrong, chances are it needs to be looked at further.

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