Corruption malaise and public procurement

Surprisingly, an item that is rather technical became a stumbling block: public procurement.

It wasn't the chapter on environment (one of the most expensive to comply with), statistics, transport policy, energy or agriculture and rural development that topped the list; the chapter that raised the largest number of serious concerns -- “benchmark subjects” in EU lingo -- singled out by the EU Commission in Brussels was public procurement.

Public procurement is the process of awarding contracts for publicly financed projects or services to either domestic or foreign businesses. The amounts of money in question could be relatively small or incredibly big. “Publicly financed” means projects on which public money is spent, whether national or local.

And Brussels was about to ask Ankara for a sufficiently elevated level of transparency to guarantee that public funds couldn't disappear unaccounted for and that public tenders could not be awarded to businesses that hadn't submitted the best bid for a particular project or item.

Let me take you back to school to make my point:

A state school headmaster asks his secretary to order 100 pencils. The expected cost, in accordance with previous similar orders, is about TL 100. The secretary has bought pencils before, and is more or less aware that one local supplier charges TL 150 and that another nearby supplier charges TL 80, so she knows that the supplier asking for TL 100 is offering the perfect price-to-quality ratio. For this amount of money, the school doesn't need to get three different offers in writing, either.

A day soon after, the same school is about to order 1,000 reams (one ream is 500 sheets) of white copy paper. The expected price for this order is about TL 10,000. In this case, it is expected that the school secretary would send out requests to at least three suppliers for a price quote. How to decide? It is advisable to consider working with a 100/80 methodology. Eighty percent of the decision must be strictly based on the price-to-quality ratio, whereas the remaining 20 percent could be based on additional considerations, including delivery time, quality of service or the possibility of a prompt replacement or refund for defective goods. Some public tenders allow for this 20 percent leeway, others ask for nothing but a 100 percent price-quality evaluation.

Now let's consider a hypothetical national government deciding to build an entirely new state school. Many millions of this nation's currency are going to be spent. There are architects, landowners perhaps, construction companies and interior suppliers. The school is to be built in a medium-sized town with an ailing construction sector, while elsewhere business is booming. The local construction company hears about the national tender and lobbies the local authorities. They in turn inquire with the central government about what the bid levels are like. Chances are that the local bidder miraculously submits the lowest offer and wins the tender.

Back in 2006 the Republic of Turkey knew about the problem and didn't shy away from accepting the screening report's recommendations and promising to work accordingly. A new public procurement agency was set up and a fair number of changes were made to make the whole system more accountable.

We should ask, however, in the wake of this week's corruption scandal -- unfolding as I write this column -- was it enough? I'm not saying public procurement is the only reason for this or future corruption scandals, but it is certainly an integral part of it.

Corruption is nothing to be dismissed as normal or acceptable. Besides, honesty and transparency are desired values, regardless of the price tag!

Let Turkey rid itself of the malaise of corruption wherever and whenever, as quickly as possible. Not only is the completion of the EU's chapter five far off, but Turkey's business culture and its society's trust in the local and national government is at risk of permanent damage.