How an Effective Procurement Policy Overhaul Could Rewrite the Nation’s Future and Transform the Nation’s Public and Private Sectors
By Jithendra Antonio
In a country where corruption has long infiltrated both public and private sectors, Sri Lanka approaches a critical juncture, where decisions today will echo for generations. Embedding a robust procurement system is more than a policy fix—it’s a seismic shift that could redefine governance and economic growth. This article explores how a unified, technology-driven procurement framework can eradicate corruption, drawing on successful global examples and making a case for a bold, transparent, and accountable procurement model.
The Current Procurement Landscape in Sri Lanka – The Weaknesses
Sri Lanka’s public procurement has been governed by outdated guidelines from 2006, with processes largely manual, decentralized, and vulnerable to manipulation. Political interference and favouritism have regularly influenced procurement decisions, resulting in inflated contracts and repeated awards to the same bidders, even those with poor track records.
The absence of a comprehensive Public Procurement Law has also created a vacuum in oversight, leading to estimated financial losses amounting to 10–25% of contract values due to corruption.
While the National Procurement Commission (NPC) was reinstated in 2022, its mandate remains undermined by insufficient enforcement, weak blacklisting mechanisms, and lack of transparency in contract processes. In this context, adopting a single, effective procurement policy is not merely advantageous—it is essential.
The Global Gold Standards in Procurement: Lessons from Exemplars
To understand how a single effective policy can transform procurement, it’s essential to examine systems that have pioneered transparency and accountability in public procurement.
- South Korea’s KONEPS: Automation and Transparency in Action
South Korea’s KONEPS (Korea On-line E-Procurement System) serves as a global model, demonstrating how digital transformation curbs corruption. KONEPS integrates all procurement functions into a centralized electronic platform, automating everything from bidding to payment. By removing face-to-face interactions, KONEPS has drastically cut opportunities for manipulation and bribery, leading to government savings of approximately $8 billion per year
The platform’s real-time data accessibility has also streamlined operations, reducing procurement times by up to 75%.
For Sri Lanka, emulating KONEPS could mean implementing a similar end-to-end digital procurement system that minimizes human discretion, thereby blocking corrupt practices at each stage.
- ChileCompra: A Public Marketplace for Competitive Bidding
Chile’s ChileCompra system provides an open marketplace where suppliers can openly bid on government contracts. By making procurement data publicly accessible, ChileCompra invites greater competition and allows citizens to scrutinize contract awards, which has curtailed favouritism.
This model led to price reductions of up to 10% and made it difficult for corrupt officials to manipulate contract terms.
For Sri Lanka, a similar open-market structure, where procurement details are publicly accessible, could create a fair competitive environment, enabling a more diverse pool of vendors and ensuring public accountability.
- Estonia’s Blockchain-Based System: Secure and Immutable Records
Estonia, a pioneer in e-governance, employs blockchain in its procurement processes to create a secure, tamper-proof record of all transactions. This approach ensures that once procurement records are saved, they cannot be altered retroactively, eliminating opportunities for corrupt post-facto adjustments. Estonia’s model has strengthened public trust and attracted international bids, due to its clear, verifiable procurement history.
Implementing a blockchain-based procurement system in Sri Lanka would prevent post-award adjustments and discourage collusion, promoting a level playing field for all contractors.
- United Kingdom’s Contracts Finder and Open Contracting Standards
The UK’s Contracts Finder platform, part of the broader Open Contracting Data Standard (OCDS), makes detailed procurement information available to the public. By adhering to OCDS, the UK ensures standardization in data presentation, enabling straightforward monitoring by civil society and auditors. Such transparency has boosted trust and led to significant savings by minimizing collusion and overpricing.
For Sri Lanka, adopting a standardized data publication protocol could align government procurement practices with international standards, fostering greater investor confidence.
- Philippines’ PhilGEPS: A Centralized Platform for Accountability
The Philippines’ PhilGEPS (Philippine Government Electronic Procurement System) provides a centralized system for tracking procurement activities. Its vendor registry and bid monitoring reduce duplication and increase oversight. This model has helped the Philippines cut procurement costs by approximately 10%, deterring collusion and price inflation.
In Sri Lanka, an approach similar to PhilGEPS would establish a reliable vendor registry, supporting effective blacklisting and preventing the repetitive hiring of underperforming contractors.
Building a Corruption-Resistant Procurement Model for Sri Lanka
Drawing from these global exemplars, an effective procurement model for Sri Lanka should be grounded in transparency, accountability, and technological innovation. Here’s how this model could take shape:
- Centralized and Transparent e-Procurement System
Sri Lanka’s procurement should operate on a centralized e-procurement platform that includes:
- Full Integration of Procurement Stages: Like KONEPS, Sri Lanka’s platform should handle everything from bid submission to payment, automating data entries and reducing human intervention.
- Public Accessibility: Similar to ChileCompra, the system should allow citizens to access procurement data, increasing public scrutiny. The public platform could publish contract details above a set financial threshold (e.g., Rs. 10 million), fostering transparency.
- Real-Time Tracking: Adopting blockchain, as Estonia does, would ensure that all procurement records remain immutable, reinforcing trust in the system.
- Objective and Competitive Bid Evaluation
An effective system should prioritize open bidding and discourage single-source contracts:
- Weighted Scoring Based on Value for Money (VFM): Like the UK’s model, bids should be evaluated not only on price but on the overall value they provide, considering quality, sustainability, and lifecycle costs.
- Automated Evaluation Algorithms: Incorporating AI to assess bids can help eliminate biases and enable more accurate, consistent scoring, reducing the chance of favouritism.
- Blacklisting Mechanism and Vendor Registry
To address repetitive awards to underperforming contractors, Sri Lanka’s system should include:
- Automated Blacklisting for Non-Compliance: If a contractor fails to meet contractual standards or engages in fraudulent activities, an automated system should bar them from future government contracts, as seen in PhilGEPS.
- Central Vendor Registry: Like the Philippines’ system, this registry would provide performance data on each vendor, deterring underqualified or corrupt vendors from being awarded new contracts.
- Independent Oversight and Civil Society Engagement
Effective procurement relies on independent oversight.
- Third-Party Audits and Public Engagement: Sri Lanka should mandate regular audits, with findings made public. Civil society and media involvement would add an essential layer of oversight, as seen in successful models worldwide.
- Whistleblower Protections: A secure and anonymous reporting mechanism, similar to successful implementations in the UK, would empower individuals to report corruption without fear of retribution.
Reclaiming Public Trust through Transparent Procurement
Sri Lanka’s journey toward a corruption-free public sector hinges on adopting a procurement system that is fair, transparent, and resilient. The global examples illustrate that a centralized, transparent system, augmented by technology, can dismantle the machinery of corruption that has long drained public resources.
A comprehensive e-procurement model, aligned with international standards, would not only restore trust but also provide significant economic benefits—potentially saving the government billions. As Sri Lanka stands at this crucial juncture, a reformed procurement system offers not just an administrative overhaul but a path toward a more accountable, equitable society. In a world rife with economic challenges, a transparent procurement system is no longer a choice but a necessity.
(The writer is a Consultant specialised in Data Analytics with a Special Focus on Sri Lanka’s Future Direction, and in the fields of Sustainable Energy, ESG, Investments and telecommunications. He can be reached at jithendra.antonio@gmail.com.)