This article is part of a series exploring the positive impact of Integrity Pacts on public procurement, backed by evidence from 18 pilot projects in the EU.
When it comes to public spending, expectations run high. We expect governments to deliver for the common good, and to do so efficiently and effectively. When buying goods and services from companies, we expect all parties to respect laws and regulations, to comply with high standards of quality assurance, and to leave no space for corruption.
There’s a good reason for this. According to experts, five billion euros could be lost to corruption in public procurement every year in the European Union (EU).
Every day, people across the EU live with the consequences of corruption in public procurement, be it inflated transport fares, run-down schools or neglected parks. Add to the mix a systemic lack of transparency and oversight and, unsurprisingly, public confidence in the fairness and integrity of the entire process suffers.
To overcome this challenge, governments will have to increasingly look for tools with the potential to help enhance transparency and accountability in public contracting projects. And we have a solution: promising results from Integrity Pacts, tried and tested in 11 EU countries, make a case for wider adoption across the Union.
Integrity Pact is a real-time monitoring mechanism for public contracting procedures. It brings together contracting authorities, bidders, and civil society to monitor a specific contracting project. Since 2015, we have been piloting Integrity Pacts in 11 EU countries, together with the European Commission and local civil society groups.
An Integrity Pact’s defining strength is real-time oversight by an independent monitor, which helps address corruption and fraud risks as they emerge. By following the entire procurement process and scrutinising decisions, civil society monitors can shine a light on risks and irregularities and lead to better outcomes in each project. But it’s not only that: their expertise and independence enable civic monitors to further investigate and analyse systemic shortcomings, enabling them to point out the blind spots in the procurement process and propose improvements.
Our experience shows that independent monitoring has led to improved outcomes for each given public contracting project. On top of that, we found that Integrity Pacts have also reaped wider benefits by increasing transparency and accountability and going beyond the minimum legal requirements.
Romania: Leaving undue influence at the door
In Romania, for example, the National Cadastre Agency was in search of companies to help increase land registration in the country. As independent monitors, Transparency International Romania and the Institute for Public Policy (IPP) analysed this small and very specialised market. They quickly found that revolving doors – a movement of individuals between positions of public office and jobs in the same sector – could taint the process. They wanted to ensure that any such connections were detected in time and vetted.
Independent monitors commissioned a specialised journalist to investigate potential conflicts of interest surrounding the different contracts. Even though the findings didn’t uncover any ongoing wrongdoing, monitors were able to build on the analysis and propose measures to prevent undue influence in the future. This has also allowed them to strengthen the monitoring of the contracts’ implementation.
By investigating market operators in such detail, monitors embedded a mechanism to reduce the risk of undue influence in the project in question and ensured the adequate implementation of its contracts. What’s more, their contribution will have lasting effects, as the monitors later provided training on identifying risks in this market to the cadastre agency staff.
Our hands-on decisionmaker's guide aims to help EU authorities get started with embedding Integrity Pacts in the investments undertaken as part of the Multiannual Financial Framework 2021-2027 and COVID-19 recovery funds.
Italy: Uncovering risks and protecting public money
In Sicily, an investigation into a company awarded with a contract proved essential. Here, municipalities put out a tender in the field of energy efficiency. After a contractor was selected, critical information surfaced right before the final awarding: the selected company’s technical director was convicted of environmental crimes.
The independent monitor Amapola dug further and uncovered that there was more to the story. In addition to the environmental crimes conviction, the director faced a corruption investigation as part of a separate public contracting procedure. None of this information was disclosed by the bidder.
While the conviction and the investigation were not a cause for the automatic exclusion of a bidder, Amapola pointed out that the failure to disclose such information was a valid reason, recognised by the Italian laws. They presented this view to the contracting authority and helped them put together a sound legal justification for the exclusion of the bidder, which was later communicated to the company. Their legal argument was based on the bidder providing false information and breaching an integrity pledge submitted earlier in the process.
When the company refused to accept the decision and took the case to court, the monitor continued to support the authority. The court upheld the validity of the contracting authority’s decision, cementing the legitimacy of Integrity Pacts and independent monitoring.
Enhancing transparency and accountability in future projects
The contribution each Integrity Pact makes to each procurement project is unique and yet expected. It strengthens expert oversight and supports anti-corruption measures, strengthening public confidence in the fairness of public procurement.
With consistent use of such open, data-driven and participatory oversight mechanisms, governments can ensure public contracts deliver what people need.
Considering an Integrity Pact?Check our guides for practitioners and governments