The Government Project Brokers

Wednesday, 19 September, 2012 | 20:19 WIB
The Government Project Brokers
TEMPO Interactive, Jakarta:It is suspected that the tender process for government projects has turned into a way to "share out" state funds. An electronic procurement system must be implemented.

The tender process for government projects needs a total overhaul. The various "games" result in many projects being neglected. The latest proof of this is the failure of PT Hidayah Nur Wahana to distribute quality rice seeds from the Agriculture Ministry. The company, whose office in Bantul looks like a type 48 house, was clearly not competent to do the job. Two months before the project was due for completion, it had only distributed one percent of the seeds. In some areas farmers refused to accept the seeds because of poor quality.

These irregularities should have been apparent from the outset in April. It was very odd that a company more used to importing agricultural equipment won the seed tender. After all, there is a state-owned company with more experience, PT Sang Hyang Seri. However, because the tender offer from PT Hidayah was four percent lower, the company specializing in managing seeds was not awarded the contract.

The tender committee should not have focused on price to the exclusion of all other factors. Unfortunately competence, experience or the company's credentials were not studied carefully in this case. For example in the tender Work Plan and Conditions, there was no obligation for the contractor to own a seed production facility. The winning contractor was merely asked to make a storage facility available, then to work with farmers to produce seeds. A condition like this was an invitation for brokers to participate in the tender process.

The ministry has full authority to determine the requirements for a company to participate in a tender. But with fundamental flaws in the tender conditions, it is fair to suspect that the tender was "aimed" at a particular company. There are indications that tenders frequently do not attach any importance to a company's competence. In many cases the winners of tenders do not actually carry out the project work. They pay other companies, sub-contractors, to complete the projects they win. Of course these sub-contractors are paid a smaller amount to ensure the tender winners make a profit, with the quality of the project suffering accordingly.

A total overhaul of the government project tender process will save the state money. The process should be made more transparent, for example by an increasing emphasis on e-procurement. After all, Presidential Regulation No. 54/2010 on Procurement of Government Goods and Services contains an obligation to procure goods and services electronically. An electronic tender system, with procurement and purchase using the latest technology should reduce the abuses of the tender process.

A body such as the Government Goods/Services Procurement Policy Agency (LKPP), which currently spends more of its time drawing up policies. should be involved much more in overseeing the tender process. The Corruption Eradication Commission should also keep a much closer watch on government project tenders. It is these procurement projects that have given rise to so many extraordinary corruption cases such as the one involving former Democrat Party treasurer Nazaruddin.

We do not want tenders for government goods and services, which are paid for by the people, to only benefit a few individuals close to the center of power. If the tender process could be made transparent, the governing coalition would be not be accused of intentionally sharing out the project "cake" in order to stay in power. ****

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