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Sunday, January 23, 2011

Procurement controversies du jour, 24 Jan 2011

Bangalore, India: Civic body’s projects are ‘urgent’ only on paper
The BBMP had planned several projects in the run-up to Aero Show 2009, the biggest aviation event of the country. But today, when the city is gearing up for the 2011 edition of the show, these ‘urgent’ works still lie incomplete while those completed are riddled with inferior quality of work, reveals an audit by the Technical Vigilance Cell under Commissioner (TVCC).

Under the circumstances, what was the point of exempting the projects from the Transparency Act and tendering process?’’ an official said.

Exemption from scrutiny was sought saying that the projects could not be held up in paper work as they had to be implemented immediately. Among other things, the audit revealed that contracts were given to select contractors and administrative procedures ignored.

Geneva (AP): Fraud plagues global health fund
A $21.7 billion development fund backed by celebrities and hailed as an alternative to the bureaucracy of the United Nations sees as much as two-thirds of some grants eaten up by corruption, The Associated Press has learned.

Much of the money is accounted for with forged documents or improper bookkeeping, indicating it was pocketed, investigators for the Global Fund to Fight AIDS, Tuberculosis and Malaria say. Donated prescription drugs wind up being sold on the black market.

"The messenger is being shot to some extent," fund spokesman Jon Liden said. "We would contend that we do not have any corruption problems that are significantly different in scale or nature to any other international financing institution."

New Jersey, USA: Audit shows Rutgers' spending procedures lacking
Rutgers University routinely flouts competitive bidding standards in purchasing a wide range of goods and services, an audit by the state comptroller has found. The audit said the university had yet to implement tighter fiscal controls recommended by a report by the State Commission of Investigation three years ago.

Comptroller A. Matthew Boxer said in a press release, “its procurement policy allows for exceptions that are so general and undefined, they essentially give Rutgers officials unfettered discretion when selecting vendors.”

The audit found that in “almost all instances” the university does not publicly advertise for its contracts, instead selecting preferred vendors. Rutgers further limits competition by entering into noncompetitive “negotiated” agreements

The university issued a statement in response noting that the comptroller found no evidence of illegal activity. Rutgers said it had been a good steward of public money, getting better deals on some goods and services than had other agencies that used the state’s purchasing system.

The university's defense in this last story once again illustrates the "no harm, no foul" proposition I have previously objected to.

All three stories illustrate that the "cost" of effective procurement procedures is cheaper than the cost of ineffective ones. It may be easier to put a price on the cost of performing the procedures, but the cost to the integrity of the government and institutions cannot so easily be quantified.

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