OECD Recommendation
Integrate risk management strategies for mapping, detection and mitigation throughout the public procurement cycle.
- Develop risk assessment tools to identify and address threats to the proper function of the public procurement system
- Publicise risk management strategies, for instance systems of red flags or whistle-blower programmes, and raise awareness and knowledge of the procurement workforce and other stakeholders about risk management strategies
Related Principles
Risks to public procurement include:
- Risks of waste or inefficiency in all aspects of the procurement process, due to a lack of awareness on the part of the stakeholders involved or due to an objective difficulty in the case of complex projects;
- Financial risks, particularly during periods of severe economic and financial uncertainty;
- Risks of fraud, misuse of public funds or corruption, in case of misappropriation and
- Reputational risks/potential damage to the image of the contracting authority too.
These risks should be actively managed, particularly in the framework of large events and large infrastructure projects where such risks are increased.
Related Tools
Pre-tendering
Post-award
All phases
Country Cases
Risk assessment tools to identify and address threats to the proper function of the public procurement system
- Allocation of risks during the construction of Heathrow Airport Terminal 5 (UK)
- Conflict of interest management during tender evaluation in Australia
- Financial disclosure and conflicts of interest: State of Illinois, United States
- Four-eyed principle used in the Tappan Zee Bridge Project, New York State (USA)
- Procurement probity plans by the Queensland Government (Australia)
- Staff rotation in the German civil service
- Tasmania's (Australia) checkslit of potential risks in the goods and services procurement process
Promotion of risk management strategies
Reviews
- Fostering effective internal control and risk management in IMSS’ procurement activities (extract of Public Procurement Review – IMSS, Mexico)
- Fostering effective risk-based internal control in ISSSTE’s procurement activities (extract of Public Procurement Review – ISSSTE, Mexico)
OECD work on risk management
- Bribery in Public Procurement
- Committing to Effective Whistle-blower Protection
- Integrity in Public Procurement: Good Practice from A to Z
- Managing Conflict of Interest in the Public Service
- OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas
- Risk Mapping: Understanding Risks of Fraud and Corruption in the Public Procurement Cycle (in OECD Principles for Integrity in Public Procurement)
Other institutions’ work on risk management
- Checklist of potential risks in the goods and services procurement process, Tasmanian Government (July 2015)
- Integrity Risk Assessment in Public Procurement in Thailand, A priority framework for public procurement integrity reform, UNDP (2015)
- Managing Risk in Procurement Guideline, Government of South Australia, Department of Education and Child Development (2015)
- Risk management, UN Procurement Practitioner’s handbook
- Risk management in the procurement of innovation – Concepts and empirical evidence in the European Union, European Commission (2010)