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Confronting Fraud and Ensuring Value for Public Resources through E-Procurement

By: Mandela Mangull Porson

Liberia struggles to generate revenue to facilitate its developmental initiatives. But, also, the country struggles to spend its limited revenues to provide public goods through public procurement processes that deliver the best value for money. Liberia has lost millions through leakages in the manual or traditional procurement infrastructure that facilitates public procurement in the country. Procurement managers are said to at times plot with firms to inflict the value of projects and would go on and receive the excesses. Other demand upfront bribes and award contracts to less qualified firm-something that leaves several projects in the country either incomplete or complete below the required standard. Besides organized procurement scams, negligence by less qualified personnel has also contributed to ripping the country off resources it badly needs to address other pressing socio-economic development challenges. The limited human capacity to promptly and effectively drive public procurement has delayed the delivery of public goods and services needed to address socio-economic problems.

Liberia and its development partners have made table progress to ensure transparency in public procurement, and by that to reduce or stop leakage of public resources to a few individuals. The country’s procurement framework and activities are underpinned and facilitated by a Public Procurement and Concession (PPCC) Law, in the most part; provide reasonable safeguards to ensure transparency, fairness, integrity and best value for money. Basic and advanced staff training in public procurement has been provided by specialized programs and institutions to include a Public Financial Management Training Program, and the Liberia Institute of Public Administration, respectively.

Despite the relative progress, much remain desired to lunch and sustain an efficient and transparent procurement system that reduces the odds for procurement fraud, as well as procrastination in commencing and completing procurement of goods, works, and services are in dare need. Liberia’s Public Procurement, in large part, is manual or traditional; thus, increasing the chances for fraud and delay in the acquisition of goods, works and services. To address these challenges, Liberia needs to do more in increasing real-time access to detailed procurement information. Liberia’s human capacity building efforts in the procurement sector will also need to focus on both the providers of goods, works and services and procurement entities or practitioners. To this end, e-procurement which has proven to be successful in ensuring value for money, fast procurement process and more so ensuring transparency, fairness, and trust, in other countries remains mandatory for Liberia.

The motivation behind the adoption of e-procurement in public and private procurement is to eradicate corruption, enhance efficiency and effectiveness, transparency and accountability. The use of E-procurement will improve the way governmental and non-governmental institutions spend resources to meet unlimited wants. E-procurement is important to the Liberian economy because of its non-human transaction nature and integrated platform; it also increases competition among vendors/suppliers, lower purchasing and administrative cost. This process is easily monitored and transparent with zero assurances of malfeasances. 

E-procurement is the “combined use of electronic information and communications technology (ICT) to enhance the links between customer and supplier, and with other value chain partners, and thereby to improve external and internal purchasing and supply management processes”(CIPS, 2012). This integrated information and communication technologies platform is used to carry out individual or all stages of the procurement process including search, sourcing, negotiation, ordering, receipt, and post-purchase review (Croom and Brandon-Jones, 2004). When used to conduct economic activities between procuring entities (buyers) and suppliers- local and international (sellers) will enhance productivity, effectiveness, and efficiency in procurement. It encourages competition and will minimize, if not eradicate leakages in procurement practices in Liberia. E-procurement, if developed would allow suppliers to know far ahead what a procuring entity would need at a particular time and work to meet up with the time because the information in the form of procurement plan would be posted on the e-procurement Platform/portal in advance for vendors to assess and plan their production.  

A study done by Jean Bosco Harelimana (2018), established that in Rwanda, E-procurement has helped government savings; The Ministry of Finance & Economy Planning, during the inauguration years of e-procurement,  experienced a reduction in its expenses from 24.4 million in 2015 to 18.6 million in 2016 as the result of e-procurement introduction. Botswana and Ghana are two other good examples of the positive impact of e-procurement usage in public tendering with regards to cost, efficiency, and effectiveness.  E-procurement has numerous benefits which include: “economies of scale through the aggregation of demand, reduce the cost of doing business for both government and suppliers, minimizes human errors in the buying or shipping processes, streamlines invoice reconciliation and dispute resolution, helps in finding new suppliers and vendors that can provide goods and services faster and/or cheaper (improved sourcing) and integrate budgetary control into the procurement process”.

Automating financial operations in Liberia has been picking up, though on a very slow paste. The Liberia Revenue Authority has introduced some improved measures of revenue collection. However, if the process that expense government monies are not developed and transformed, efforts placed in raising revenue will be unrealized due to fraud, substandard or unfinished projects, payment of abnormal high cost, and more situations like the case with the Jallah’s Town Road project , https://allafrica.com/stories/201004300432.html,Bong County Technical Collegehttps://frontpageafricaonline.com/news/liberia-anti-corruption-commission-obtains-corruption-indictments-against-several-persons-in-bong/ and the Executive Mansion renovation https://www.liberianobserver.com/news/executive-mansion-still-unusable-incomplete-after-us33-4m-payout/. There are many failed procurement issues from the manual system that do not come to the public. The automating tax collection has been experiencing challenges and moving on a low pace, transitioning from a manual procurement system to an e-procurement method will experience similar challenges but when successfully adopted and fully utilized the outcome is massive.

The bottleneck experienced by most institutions in moving towards the use of e-procurement in many instances is procurement staff and suppliers’ unwillingness to adapt to the use of the internet to perform economic activities. They have consistently shown resistance to the use of technology and are so comfortable using the manual method for conducting procurement.  The lack of affordable and accessible internet services to support the electronic procurement infrastructure desired is another major challenge.  To remedy this situation, procuring entities must hire competent staff, as well, provide procurement staff and suppliers the needed skills and training overtime that would enable them to use the e-procurement platform. A users-friendly or flexible e-procurement infrastructure, when created and the importance are well communicated, with time, would attract all stakeholders to its usage. While government and internet service providers should create incentive internet packages to businesses for the smooth operation of e-procurement activities. As mentioned, effective and efficient network infrastructures are fundamental to this drive.  

Conclusion:

This automated system is a real deal to managing public and private finances through procurement activities and it opens up an institution’s economic activities to multiple suppliers which provide options for best quality, good price, etc. These processes also eliminate error in or arising from document preparation (paperwork), eliminate international travels cost; one can sort foreign supplier using the internet to tender/bid, be evaluated, accepted and award contract without traveling miles, reduction in cost associated with document preparation and distribution to suppliers/bidders. It also enforces transparency, increases productivity and accelerates procurement speed/time. Overall, the use of an automated system is an anti-corruption measure.

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