Here’s an example of how government corruption in procurement results in resource wastage for the taxpayers.
In this trial, one of the largest ever involving alleged white-collar crime, Canadians have been afforded rare glimpses into a government procurement system that is billed as competitive, open and fair but is actually riddled with tweaks and quirks that give bureaucrats significant power to determine outcomes.
So how do they do it?
Potential suppliers can tell if a request for bids is wired because the documents demand skills or experience so specific that only one or two firms can meet the minimum standard. Often these skills bear startling similarity to those possessed by contractors already on the job.
So why is this happening?
This is the real clue as to what’s behind this complex process — and the reason for it is simple: There’s an inherent conflict between running competitions and the desire of federal departments to solve practical problems by purchasing the services of specific, experienced consultants.
So although I can accept that there is some good intention behind having rigorous government rules about procurement to ensure that cronyism doesn’t occur – there is just a fundamental agency problem here. The problem is not just “oh we just need to get the right people with the right rules in command of the government”, the problem is with the overall institution and ownership.
This is why I encourage people to leave things to private entrepreneurs rather than government politicians and bureaucrats, wherever possible.