Title of Presentation: Integrity in Public Procurement – Open Contracting Data Standard for more Integrity
By: Aranita BRAHAJ, representative of AIS – Open Procurement Albania
Event: Corruption and Anti-Corruption in Albania – Some insights on what can be done.
Seminar organized by Embassy of Sweden in Tirana.
Corruption is one of the most problematic issues for the country. Justice institutions or anti-corruption mechanisms are weak to non-existent. Nevertheless, media and watchdog organizations continue to report facts and contribute against abuse with public money. Public procurement’s remain one of the most risky domains. The economic damage caused to the budget by lack of efficiency and clientelism in tenders is estimated as high. Official audits verify violations and irregularities in about 30% of the cases being audited. The economic damage estimated by the Supreme Audit Institution is about 300 million Euros annually. The number of businesses companies competing for high-value contracts is small and foreign and international companies of integrity are reluctant to become part of tenders for major public works in the country. Nevertheless, high-value contracts or concessionary PPPs, where assets and deadlines are of particular importance have been recently awarded to unknown companies registered in fiscal havens or in countries, where shell companies are allowed to operate, knowing nothing about the identity and integrity of their owners.
AIS is a local organization committed to transparency, accountability, and anti-corruption. We are known in the country as Open Data Albania committed to creating instruments that open data; make them accessible and understandable by increasing awareness and civic response. In the recent years, we have empowered the public in the country with several databases and catalogs for transparent information. Follow the Money has become an easier practice as long as:
- We publish treasure transactions and relevant descriptions for 1600 budgetary institutions every day; data on contracts by their values
- We structure information on the asset declarations of appointed and elected high-level officials and politicians, making their interests and economic powers understandable.
- We publish data on the structure, owners, economic performance of contracted business companies, and partners with the institutions for implementing contracts for services, civil works, or purchases.
One of our most important instruments in anti-corruption is our Open Procurement Albania database. http://openprocurement.al/en/index/index
In reducing corruption in procurement, watchdog actors and control, monitoring, and risk assessment instruments are particularly important. All of this enables public and civic pressure for more regular processes, timely auditing, and a clear assessment of the forms of abuse and misappropriation.
The database we have developed is in line with a well-known standard in recent years, which is Open Contracting Data Standard (OCDS). This standard provides transparency for all phases of contracting: from project planning, tender, selection of bidders, negotiation of contracts, implementation, and payments.
This standard is offered by an International Partnership, namely the Open Contracting Partnership, applied nowadays in 33 countries, in their public e-procurement systems. Albania is committed under the 2018 Action Plan for the Open Government partnership (OGP) to apply this standard. But procurement agencies are reluctant in applying this standard that guarantees Openness in Public Contracting and leads to greater impact. Open contracting makes public procurement fair and more efficient. Openness, participation, and cooperation across government, business, and civil society helped sustain reforms and deepen their impact.
Our organization has established a well-structured database with data on tenders for local government, the Albanian Development Fund, Albanian Road Authority, Health Sector Institutions and State Owned Corporate. We collect data and documents manually on daily basis and enter them into a catalogue by the open data standard. This system enables the functioning of an algorithm, where data are automatically scanned and tenders are marked with redflag, showing risk indicators for lack of competition; lack of equality among operators; and competition irregularities. The system is a very good instrument for public pressure for fair contracting. The use of this standard by an organization, rather than by a procuring authority marks a somewhat special case for Albania.
Opening data, structuring information by institutions, scanning risk elements through an automatic algorithm, with only 5 risk indicators being assessed, the following have been have been marked for irregularities and problems with competition:
- 10 – 15% of the tenders conducted by the local government units during 2015-2019 http://openprocurement.al/en/index/redflag
- Over 30% of the tenders in the health sector; http://openprocurement.al/en/redflag/index
- Over 20% of the tenders by public-owned companies. http://openprocurement.al/en/pcompany/list
The Supreme Audit Institution is committed through an agreement to use this risk assessment system for its indicators to be referred to in drafting the Annual Health Auditing Plan.
In simple words, if there is only one competing operator participating in a tender, the tender has a high margin of clientelist criteria; it proves lack of trust by the other operators in the competition, and lack of competition.
Likewise, cases of all competitors being disqualified lead to suspicions for pre-determined and fictitious competition.
Transparency helps journalists, businesses, and citizens understand and react to corruption. Our best and final goal is for the redflag algorithm to be applied by the procurement authorities as a self-assessment and performance improvement instrument.
Following indications of tenders exposed to risk, internal auditors can start auditing procedures and actions by employees, institutions can verify the clientelist criteria and deadlines, and equally authorities can react by making an assessment of human resources efficiency in procurements according to the types of problems indicated.
We will continue to use this open data standard to contracting and contractors. Journalists will continue to use the data and lists of tenders and businesses marked by RedFlags. Watchdog organizations will continue to easily monitor the distribution of public contracts, understanding their defects and problems. However, finally, the integrity of Public Procurement is closely linked to the use of transparency standards and the application of risk assessment standards.