Ethics in Public Procurement: Principles and Practices, Study notes of Business Ethics

This document defines ethics in public procurement, emphasizing moral principles, fairness, integrity, and transparency. It highlights the importance of ethical conduct in procurement and supply, focusing on building long-term relationships with suppliers and avoiding unethical practices. The document also covers potential warning signs of unethical behavior, factors influencing such behavior, penalties for breach of contract, and principles and best practices in procurement and supply. It is a useful resource for understanding ethical considerations in procurement processes. Useful for university students and lifelong learners.

Typology: Study notes

2025/2026

Available from 09/17/2025

hesigrader002
hesigrader002 🇺🇸

4.1

(43)

7.7K documents

1 / 9

Toggle sidebar

This page cannot be seen from the preview

Don't miss anything!

bg1
ETHICS IN PUBLIC PROCUREMENT
Definition of ethics.
There are two definitions of ethics as follows:
The moral principles governing or influencing conduct.
The branch of knowledge concerned with moral principles.
Ethics is the basis on which most of the procurement related principles, such as fairness,
integrity, and transparency, are based. Professional standards of ethical conduct, no matter
what the organization, contain typical characteristics, including commitments to:
Behave honourably in all aspects of work and professional activity.
Conduct oneself in such a manner as to maintain trust and confidence in the integrity
of the acquisition process.
Avoid “clever” practices intended to take undue advantage of others or the system.
Uphold the organization’s standards and policies and all relevant legislation.
Avoid conflicts of interest.
Some ethical concepts and principles that relate to the procurement process are:
loyalty and respect for rules and regulations
integrity
impartiality and fairness
transparency
confidentiality
avoidance of appearance of impropriety
due diligence
Importance of ethics in procurement and supply.
1. Purchasing staffs are the representatives of their organization in dealing with suppliers.
2. Sound ethical conduct in dealing with suppliers is essential to the creation of long-term
relationships and the establishment of partnerships.
3. Purchasing staff are probably more exposed to the temptation to act unethically than
most other employees
4. It is impossible to claim “profession” status for purchasing without reference to a
consideration of its ethical aspects.
1
pf3
pf4
pf5
pf8
pf9

Partial preview of the text

Download Ethics in Public Procurement: Principles and Practices and more Study notes Business Ethics in PDF only on Docsity!

ETHICS IN PUBLIC PROCUREMENT

Definition of ethics. There are two definitions of ethics as follows:  The moral principles governing or influencing conduct.  The branch of knowledge concerned with moral principles. Ethics is the basis on which most of the procurement related principles, such as fairness, integrity, and transparency, are based. Professional standards of ethical conduct, no matter what the organization, contain typical characteristics, including commitments to:  Behave honourably in all aspects of work and professional activity.  Conduct oneself in such a manner as to maintain trust and confidence in the integrity of the acquisition process.  Avoid “clever” practices intended to take undue advantage of others or the system.  Uphold the organization’s standards and policies and all relevant legislation.  Avoid conflicts of interest. Some ethical concepts and principles that relate to the procurement process are:  loyalty and respect for rules and regulations  integrity  impartiality and fairness  transparency  confidentiality  avoidance of appearance of impropriety  due diligence Importance of ethics in procurement and supply.

  1. Purchasing staffs are the representatives of their organization in dealing with suppliers.
  2. Sound ethical conduct in dealing with suppliers is essential to the creation of long-term relationships and the establishment of partnerships.
  3. Purchasing staff are probably more exposed to the temptation to act unethically than most other employees
  4. It is impossible to claim “profession” status for purchasing without reference to a consideration of its ethical aspects.
  1. Ethical procurement gives businesses a way to avoid PR nightmares while also setting themselves apart from the competition. There's value in making ethical procurement a part of the brand. Unethical practices in procurement and supply. Potential warning signs of unethical practices. These include, but are not limited to the following:  deviations from correct procedures  overcharging by the supplier  poor record keeping  missing files  poor or no separation of duties (for example, the same person issues the order and approves the payment)  poor control (for example, only one person signs a contract)  buyer’s extravagant life style  buyer’s frequent absence from the office  excessive entertaining by suppliers  resistance to audit  reluctance to delegate  excessive secrecy  dictatorial management style  unnecessary meetings with suppliers  not allowing other staff to deal with certain suppliers  established suppliers’ reluctance of entering competitive tendering  supplier cartels. Factors influencing unethical behaviour.
  2. No Code of Ethics : Employees are more likely to do wrong if they don’t know what’s right. Without a code of ethics, they may be unscrupulous.
  3. Fear of Reprisal : When explaining why they don’t report ethical misconduct that they witness, people often say it is because they worry about the ramifications.

a. Compensatory damages aim to put the non-breaching party in the position that they had been if the breach had not occurred. b. Punitive damages are payments that the breaching party must make, above and beyond the point that would fully compensate the non-breaching party. Punitive damages are meant to punish a wrongful party for particularly wrongful acts, and are rarely awarded in the business contracts setting. c. Nominal damages are token damages awarded when a breach occurred, but no actual money loss to the non-breaching party was proven. d. Liquidated damages are specific damages that were previously identified by the parties in the contract itself, in the event that the contract is breached. Liquidated damages should be a reasonable estimate of actual damages that might result from a breach.

2. Specific Performance : If damages are inadequate as a legal remedy, the non-breaching party may seek an alternative remedy called specific performance. Specific performance is best described as the breaching party's court-ordered performance of duty under the contract. Specific performance may be used as a remedy for breach of contract if the subject matter of the agreement is rare or unique, and damages would not suffice to place the non-breaching party in as good a position as they would have been had the breach not occurred. 3. Cancellation and Restitution : A non-breaching party may cancel the contract and sue for restitution if the non-breaching party has given a benefit to the breaching party. "Restitution" as a contract remedy means that the non-breaching party is put back in the position it was in prior to the breach, while "cancellation" of the contract voids the contract and relieves all parties of any obligation under the agreement. Debarment of vendors in procurement. The Administrative Review Board debars a person from participating in procurement or asset disposal proceedings on the ground that the person— a. has committed an offence under the Act; b. has committed an offence relating to procurement under any other Act or Law of Kenya or any other jurisdiction; c. has breached a contract for a procurement by a public entity including poor performance;

d. has, in procurement or asset disposal proceedings, given false information about his or her qualifications; e. has refused to enter into a written contract as required under section 135 of this Act; f. has breached a code of ethics issued by the PPRA pursuant to section 181 of this Act or the code of ethics of the relevant profession regulated by an Act of Parliament; g. has defaulted on his or her tax obligations; h. is guilty of corrupt or fraudulent practices; or i. is guilty of a serious violation of fair employment laws and practices. Additionally, the Administrative Review Board may debar a person from participating in any procurement process if that person— a. has breached the requirements of the tender securing declaration form in the tender documents; or b. has not performed according to professionally regulated procedures. The PPRA, may also debar a person from participating in procurement or asset disposal proceedings— a. on the recommendation of a law enforcement organ with an investigative mandate; b. on grounds prescribed by the PPRA in Regulations. A debarment is for a specified period of time of not less than three years. Principles and best practices in procurement and supply. To perform procurement process, the Company refers to the implementation of the basic principles of procurement comprise:

  1. Effective , means procurement activities are carried out in accordance with the needs or predetermined plan to achieve optimal benefits for the organization.
  2. Efficient , means procurement activities are conducted in accordance with the determined plan, within a certain time frame and accountability.
  3. Open and Competitive , means the implementation of procurement activities should give the opportunity to all providers of goods and services that have met the requirements and conducted fair competition between qualified providers of goods and services under clear and transparent procedures.
  1. Transparent , means all the provisions and information regarding the implementation of procurement activities should be made available.
  2. Fair and Non-discriminative , means giving equal treatment to all providers of goods and services and does not lead to benefit for particular party due to whatsoever reason.
  3. Accountable , means the process, results, and payment must be accountable.
  4. Responsibility means procurement process conducted carefully and comply with applicable regulations.
  5. Independent , means procurement decisions taken objectively and independent from any intervention Have a wheely 🎡 good day.