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Purchasing managers should make clear to buyers they have a responsibility to their employer to bring suspected bid rigging to the employer’s notice.

Unfortunately, very often, buyers are reluctant to do so, perhaps out of a misplaced sense of loyalty to suppliers with whom they developed a good relationship.

Beyond the minimum compliance measures discussed in part one of this article published last week, a buyer should do the following as a matter of best practice:

• Doublecheck all RFP and tender documents before they go out for bid to review for inconsistencies.
• Set an example for all purchasing staff by not socializing with suppliers outside of work hours. Such fraternization sends the wrong message. No one ever got into trouble by being able to declare honestly, that they never went out for expensive meals or to a hockey games with a city supplier.
• Report any suspicious behaviour or transactions to senior management as soon as there is evidence that the procurement process may have been compromised.
• Audit the buyers and other purchasing staff regularly, and all transactions for large dollar amounts. Attention is most necessary where one supplier seems to be the vendor of choice most of the time. Look at the amount spent with companies that always get purchase orders that are just under the approved dollar amount, such as a contract for $9,999.99 when a competitive process is required for all contracts above $10,000-dollar amount.
• It is a good idea to give internal purchasing seminars to the main using departments on the correct use of the purchasing policies and procedures.
• Then take time for questions and answers to look at specific issues of concern with all the different department heads. A good and well-established relationship between the purchasing department and the client department reduces the prospect of cheating.
• Be viewed as someone who is willing to help move the process along as opposed to the one standing in the way of getting things done.

Council also has a very important role to play in maintaining the integrity of the tender system.

In relation to the law of tender, the focus of council should be on the following:

• Ask the purchasing and legal departments to provide a briefing for council on the public procurement process and the restrictions that arise under the law of tender.
• Convey to all staff the clear message that council expects everyone to carry on municipal business in accordance with all applicable laws.
• Demonstrate leadership by rejecting the temptation to override applicable purchasing policies whenever it is politically expedient to do so. Demand all councillors similarly follow the rules.
• Contact the purchasing department, or the legal, or risk management departments for clarification on process. Avoid snap judgment.
• Implement a whistle-blower policy to protect staff members who bring wrongdoing to light.
• In relation to bid rigging, council members should focus on the following:
• Require proper lines of accountability in relation to the procurement function.
• Encourage respect for procurement rules and regulations. Review large dollar contracts to insure they are within the policies.
• Avoid the temptation to interfere in the procurement process (e.g., rejecting staff recommendations as to contract awards and championing individual contractors at council meetings).
• Develop a good working relationship with procurement staff. A program of regular meetings between staff and council to monitor procurement-related issues demonstrates both attention and concern without interfering with day-to-day administration.
• Since municipalities are so particularly exposed to the risk of bid rigging, they should focus on fighting bid rigging in their public procurement systems.

They should provide staff with training and introduce a program of monitoring the tender process for all procurement staff.

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.