Oxymoron: Ethical policies and public procurement?

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StephenBauld_100.jpgWe would all agree that government procurement should be held to the highest level of ethical standards.

It is very important to the entire system that everyone working with or for a municipality be of the same mind set. The whole idea of the importance of adherence to an appropriate standard of ethics in the conduct of the procurement function is self-evident.

Yet in historic terms, concern with respect to ethics is a fairly recent phenomenon, particularly at the local government level, says Stephen Bauld, a government procurement expert.

Most municipal procurement bylaws that I have reviewed endorse the Ontario Public Buyers Association (OPBA) Code of Ethics - A Statement of Ethics for Public Procurement (or some comparable document), and require all municipal staff to adhere to it, in carrying out the procurement function.

In the United States, the National Institute of Government Purchasing's Code of Ethics (which is also mentioned in some Canadian bylaws) provides:

-- The NIPG (National Institute of Governmental Purchasing) believes, and it is a condition of membership, that the following ethical principles should govern the conduct of every person employed by a public sector procurement or materials management organization.

-- Seeks or accepts a position as head or employee only when fully in accord with the professional principles applicable thereto, and when confident of possessing the qualifications to serve under those principals to the advantage of the employing organization.

-- Believes in the dignity and worth of the services rendered by the organization, and the societal responsibilities assumed as a trusted public servant.

-- Is governed by the highest ideals of honour and integrity in all public and personal relationships in order to merit the respect and inspire the confidence of the organization and the public being served.

This is just a small sample of the NIPG's list of criteria that should be followed. Canadian ethics bylaws and policies are relatively pedestrian in comparison to their American counterparts. In the United States, municipal ordinances often extend to campaign finance (contribution limits and public financing of campaigns), laws regulating lobbyists, open government or "sunshine" ordinances, as well as highly detailed rules relating to gifts to public officials.

Many have also created independent ethics commissions of various kinds, some of which operate with a full-time staff at arms-length both to the local municipal council and the municipal administration. Although some Canadian municipalities have appointed ethics commissioners, none of which I am aware has established a comparable institutional arrangement adopted by such American cities as San Diego or Los Angeles.

I feel that there is a considerable attraction in these basic propositions. However, the difficulty is in finding a manner of putting them into operation that is both fair and workable. To my knowledge, no one has yet developed the optimal ethics policy, much less worked at how to apply it fairly in practice. Again, I offer no magic solution here, but I do hope to set out a number of concerns and observations that will prove of some use to those who are charged with developing a suitable package of ethical rules, at least in relation to municipal procurement in an upcoming article.

During investigations I have done in the past with respect to this issue, the reality is that the problems associated with conflict of interest and other causes of ethical concern arise long before any typical person would be likely to recognize that a potential for such problems exists. Prudence dictates that care be taken in any business relationship. The supplier-customer relationship is not necessarily an adversarial one, but it is one in which care must be exercised.

However, the personal acquaintance that forms through dealings in business often builds a false sense of security, lowering ones guard, which should be kept in mind.

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.

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