What is Probity?

What is Probity?

The Crime and Corruption Commission Queensland defines probity as evidence of ethical behaviour in a particular process. Probity is about ensuring there is a defensible process that can withstand internal and external scrutiny.

Demonstrating probity means more than just avoiding corrupt or dishonest conduct. Probity involves:

• Proactively demonstrating that a procurement process is robust and that the outcome is beyond reproach
• Acting in such a way that there can be no perception of bias, influence, or lack of integrity
• Demonstrating ethical conduct that exceeds the legal requirements

Council staff should be aware of their obligation to act in accordance with the requirements of their Code of Conduct and that their actions are covered by the Public Sector Ethics Act 1994. Under the Act, employees are to observe the following ethical principles:

• Integrity and impartiality
• Promoting the public good
• Commitment to the system of government
• Accountability and transparency

In managing probity in procurement, councils must comply with the inter-linked sound contracting principles in the Local Government Act (2009) part 3 s104(3).

• Value for money
• Open and effective competition
• Development of competitive local business and industry
• Environmental protection
• Ethical behaviour and fair dealing

Probity helps achieve value for money by maximizing competition and ensuring that suppliers put forward their best possible offer. This will only happen if suppliers have confidence that the procurement process is robust and beyond reproach. Conversely, if suppliers perceive that the procurement process is being conducted improperly or there are real or perceived reputational issues, then prospective suppliers may be disinclined to make an offer or put their best offer forward. This could mean missing out on the best value for money offer and general dysfunction when the process is perceived to be unfair. It can also lessen competition over the long term as suppliers no longer seek to do business with council. The experience of a process resolved in court can be traumatic to all participants and is best avoided.

Managing probity should be relative to value and risk of the project. The greater the complexity, size, and sensitivity of the purchase, the more likely that a poor procurement decision will have adverse consequences.

Probity isn’t confined to a select group of people it is the responsibility of everyone who has a role within the local government procurement process. The responsibility applies to council officers who directly arrange the procurement, their, managers and their supervisors who oversee the activity. It also applies to senior managers when they carry out their strategic and business planning for the coming years. It is not a stand-alone consideration but should be part of the procurement culture.

There is a difference between probity and legal services.

Legal advice in relation to procurement has a narrow focus:

• The legality of the process
• Reducing local government exposure to legal risks
• Protecting local government from unwanted liability

Probity advice in relation to procurement has a broader focus:

• Ensuring the integrity, honesty, and fairness of the process
• Reducing local government exposure to broader risks such as harm to reputation, loss of supplier confidence, loss of funding body confidence, disciplinary action against employees (as well as potential exposure to legal risks

Procurement officers are trained to carry out their role with probity. However, there are circumstances, for example any procurement involving specialised, complex or new matters, that are likely to benefit from a probity advisor’s review.

A probity advisor provides advice and assistance before and during the procurement process, as a basis for improving the procurement outcome and addressing unexpected probity issues that arise. There is no threshold that defines when a probity advisor should be engaged.

Fairness and impartiality involve ensuring everyone involved in the process is treated the same, that is no supplier is given an advantage or discriminated against. This should start with clear and unambiguous tender documentation, specifications that are free from bias, and the selection of an appropriately competitive process. All prospective suppliers should be given the same access to information, the same time to respond, and the evaluation methodology should be documented and decided before suppliers are invited to submit offers. The evaluation of supplier offers must occur against the documented criteria.

Accountability and transparency of decisions and process aims to maintain the integrity of procurement decisions and processes. This is achieved through the composition of the evaluation panel, accurate record keeping of all stages of the procurement process, appropriate supplier communication processes, and management procedures for maintaining the security of both soft and hard copies of documents to ensure confidentiality. It is also important to ensure all relevant documents are signed off by a person with the appropriate delegation.

The four steps promoted by the CCC to assist a council in preventing wrongdoing in procurement are:

1. Undertake comprehensive procurement fraud and corruption risk management
2. Get your procurement policy and procedures right
3. Promote a probity oriented culture through training and awareness
4. Develop and implement the right internal control activities

For more information on Probity and Assurance contact Director of Consulting, Brian Jackson bjackson@wearepeak.com.au