The Importance of Ethical Procurement Practices in Public Sectors

importance of ethical procurement

Author: Helen Doucette

“Accept the bid from ABC Company” said the VP of Finance to the Director of Procurement. 

“I cannot” replied the Director. 

“Why not” asked the VP.

“According to the Competitive Bidding Law of Canada, we can only accept compliant bids. ABC’s was late and deemed non-compliant. To accept the bid would put the organization at risk of being sued by all the other 6 compliant bidders for the value of this contract of $9 million plus up to 2 years of lost profit”, the Director replied.

“I don’t believe you. I want a legal opinion,” said the VP.

“Ok, I will get that for you”, said the Director.

A few weeks later, to the letter from the organization’s legal counsel was received and agreed with the Director of Procurement’s refusal to accept the late bid. The VP was not happy with the Director for refusing to follow the VP’s request. 

The writing was on the wall for the Director of Procurement. Their boss did not respect their expertise and experience. A while later, the Director received a poor performance report. The first ever in their career. It was then the Director had to decide. Stay or go? The Director chose to leave.

This situation is not unique. Many organizations have written policies and guidelines on Ethics, but is this situation an Ethical or Moral issue? Or both?

In conducting research for this article, I found many definitions of ‘Ethics’. I asked a search engine ‘What is the difference between Morals and Ethics?’

These are two examples that describe the differences: ‘Morals refer to a sense of right or wrong. Ethics, on the other hand, refer more to principles of “good’ versus “evil” that are generally agreed upon by a community.

Mind Ethics deals with right or wrong conduct. Morals deal with the principles governing the same. It deals with individual character. It deals with the standards set and followed by a group of people. Ethics are consistent to a certain context but might vary between contexts. in the example listed herein the Director of Procurement knew their reputation was known to be fair, honest and beyond reproach for their commitment to their ethics. They followed the Code of Ethics for Professionals to the letter for their entire career and had never encountered this situation before. Had the Director accepted the late bid, their reputation would be tarnished forever. Vendors would not trust the Director; fellow procurement professionals would treat the Director differently and there would be a possibility of being sued by the disgruntled compliant bidders.

On a global perspective, ethics may be different. For example, a Buyer was tasked with ordering scientific equipment and lab supplies for a university in Africa. They worked very hard to ensure the export documentation for all the products was correct including the stuffing in the crate and the crate itself. All products were correctly classified through the customs HS classification system for export. All went well until the shipment arrived at the airport. The Buyer received a frantic call from their onsite contact that they needed an additional $2000 CDN for the truck driver to unload the crate from the plane. The money was sent. A day later the Buyer received another request for an additional $2000 CDN for the truck driver’s brother to unload the crate from the truck into the university site. This is a good example of the difference in acceptable ethical behaviour in other parts of the world. If you are doing business in other countries, it is a good idea to contact the Canadian Consulate General for that city and check the local customs and laws.

There are several guidelines, directives and documentation that outline ethical behaviour for the public sector. For example, the Government of Canada provides a Guide on Ethical Behaviour for Procurement-Contracts and Contracting , and a Directive on Ethical Behaviour specifically directed at the Government’s shared services.

The BC Government has legislation called Ethics and Standards of Conduct in the BC Public Service for employees that includes a list of who to contact called ethics advisors. Managers and Supervisors are provided guidance through the Public Interest Disclosure Act (PIDA).

Alberta also has a code of Conduct and Ethics for the public sector Also, there is legislation in Alberta through the Alberta Securities Commission called the Securities Act (Alberta) Within that Act is a section called Protection for Whistleblowers that includes confidentiality, and protection from reprisals.

There are lots of legal cases about the prosecution of wrongdoers. But these cases do not identify what happened to the whistleblower or the person who reported the problem. Legal cases specifically dealing with whistleblowers can be searched on the Canadian Legal site called CanLII.

There is an article in the Legal Edge Issue 67 June-July 2006. This article articulates the other side of reporting unethical behaviour. What happens to the employee who reports the unethical behaviour. They discuss the price the employee pays for their due diligence. The risk is high. Morally, ethically, professionally, and legally.

The public procurement world is relatively small, and it seems everyone knows everyone, so reputations are important especially if you are just starting out in the profession. To make the decision to report unethical behaviour, one must consider all their options and let their conscience, morals and personal ethics and values be their guide. A question to ask yourself is “what are you willing to risk doing the right thing? “And “Could I sleep each night if I know I did not do the right thing?”.

Only you have the answer to those questions. The purpose of this article was to inform you about the ethics the public sector is subject to and to provide an example of an ethical dilemma that you may be experiencing and to provide guidance to help you make your decision.

Public Procurement in Canada

Certified procurement professionals play a pivotal role in the public procurement world. These experts are well-equipped with the knowledge and skills needed to navigate the intricacies of procurement processes. Whether you’re looking to enhance your procurement acumen through procurement management courses or seeking valuable insights through procurement webinars, the landscape for public procurement offers many opportunities to explore.

Procurement services in Canada encompass a wide range of activities, all aimed at achieving the best value for taxpayer money. Procurement service providers work closely with public sector procurement consultants to streamline processes, maintain transparency, and uphold ethical standards. This collaborative effort ensures that the procurement landscape remains fair, competitive, and cost-effective.

Obtaining a procurement certification or a purchasing certificate can be a wise decision for those aspiring to excel in public procurement. These certifications validate your expertise and demonstrate your commitment to professionalism in the procurement arena. Certified procurement professionals are highly regarded for their ability to make informed decisions that benefit both the public and the government agencies they serve.

Public procurement in Canada is not just about acquiring goods and services; it’s about contributing to the well-being of communities and the country as a whole. The individuals in this field understand the significance of their roles and strive to uphold the highest standards of ethics and accountability.

Whether you’re a seasoned procurement professional or just starting your journey, the public procurement landscape offers a wealth of opportunities for growth and development. From procurement management courses to ongoing procurement webinars, resources are available to help you stay informed and up-to-date with the ever-evolving world of procurement.

Helen Doucette SCMP(Ret) has over 40 years of experience in the Purchasing, Procurement and Supply Chain Management industry, both private and public. Helen has instructed courses over 26 years. Outside of work, Helen loves tap dancing, reading, and exercising.

Author: Helen Doucette

Disclaimer: The views and opinions expressed in this article are those of the Subject Matter Experts and do not necessarily reflect the official policy or position of The Procurement School.

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