Managing risks in public procurement in Bangladesh: a case on public works department

Abstract

Public procurement plays an important role in the socio-economic development of the country. It spends public money to serve the people. To achieve the best product, service or work from public investments, the procurement process must be managed properly and made true competitive. Any type of mismanagement and inefficient handling of procurement activities fails to deliver the expected benefits and damages the reputation of a procurement agency. Therefore, it is imperative for undertaking certain measures to avoid risks and reduce their negative effects in case of the management of public procurement. Risk management enables action to be taken to correct deficiencies and to avoid greater problems in future public procurement. This research aims to examine the current procurement practices in Public Works Department (PWD) and identify the associated risks in various stages of public procurement cycle including bidding process, selection process of contractors, implementation of procurement and financial management. A questionnaire survey was administered to address the research objectives. It is observed that PWD is complying with Public Procurement Act, 2006 and Public Procurement Rules, 2008 in its procurement practices and by complying with the Act and Rules, PWD manages risks in early stages of procurement (e.g. in tendering) competently. However, significant drawbacks have been observed in managing the risks such as selection of contractors, insurance, liquidated damage, bill payment, completion time and political interference. Appropriate policies and operational practices need to develop to address these risks. Electronic Government Procurement (E-GP) can be useful in addressing corrupt, fraudulent, collusive and coercive practice effectively. Moreover, the documentation of tender processing is saved in E-GP systems database from where any authorized officer can monitor tender processing anytime. Therefore transparency and accountability is ensured and oversight of procuring entities increases which boosts up risk management process. Although the scope of the dissertation is limited to exploring the risks based on interviews with procuring entities in PWD’s procurement, the findings of this study can provide useful inputs for further detailed study regarding the implementation of systematic structured risk management process in PWD and other government organizations.