OECD Observer

Good buys

OECD Principles for Integrity in Public Procurement

Governments and state-owned enterprises buy a wide variety of goods and services, from basic computer equipment to the construction of roads. But did you know that such public procurement represents some 10% to15% of GDP across the world?

Governments spend about US$4 trillion each year on procuring goods and services. But public procurement is also very vulnerable to fraud and corruption. In fact, bribery is estimated to add 10% to 20% to total contract costs.

Put another way, taxpayers around the globe unwittingly underwrite corrupt practices to the tune of some US$400 billion a year. The OECD Principles for Integrity in Public Procurement is a ground-breaking instrument that promotes good governance in the entire procurement cycle, from needs assessment, through the award stage, contract management and up to final payment. The book includes a practical checklist for implementing the principles at each stage of the procurement process, and offers a comprehensive inventory of the various ways procurement contracts have been tainted by corruption or fraud. Examples show that fraud occurs even in countries with longstanding and abundant legislation, and in which numerous checks are performed by honest officials.

Procedures that enhance transparency, good management, prevention of misconduct, accountability and control help to prevent the waste of public resources as well as corrupt practices. That's why the very first principle for enhancing integrity in public procurement calls on governments to provide an adequate degree of transparency in the entire procurement cycle. Another encourages governments to invite civil society organisations, the media and the wider public to scrutinise public procurement. Adopting principles like these can help governments make sure their orders are good buys for everyone.

ISBN 978-92-64-05561-2

©OECD Observer No 273, June 2009