Risk Management in Public Procurement Process

Public procurement represents an important part of the current economy reality. Throughout the procurement process, due to the effect of the interaction among the components of the public procurement system, certain actions with significant negative effects on its optimal operation may occur. Risks may turn into certainty either because of a simple error in the development and administration of the procurement process, or because of a deliberate deviation from the existing legal provisions. Therefore, there is an imperative for the implementation of certain risk-avoiding measures, as well as of measures aiming to reduce their negative effects in case of their occurrence.

-Service Supply Contracts -these are contracts by onerous title, focused on one of the following types of works that are to be ordered and accepted by a contracting authority: execution (including planning) and execution -by any manner or means, of a work according to the requirements submitted by the existing contracting authority; -Contracts for Works -these are contracts by onerous title that are not described by the definition provided for the first two categories of contracts, and which are focused on an activity that has been especially ordered by a contracting authority.Most frequently, the procured services belong to the following fields -publicity, management of buildings, cleaning, management consultant, financial services and ITC, telephony, satellite communication, etc; In 2004, the European Union updates, simplifies and improves the legislation referring to public contract awarding procedures, a legislation that is applicable in the member states.

National awarding processes and EU financing awarding processes
The national system of public procurement is governed by the same set of rules as the European public procurement system.The contracts financed from the European budget are awarded according to the Romanian legislation in force.The European system is governed by the European directives, which are transposed in the internal law.The differences between the two systems are related to the application scope, since the national system establishes similar awarding rules below the European value thresholds.There are no special regulations for the advertising service agreement, which is construed as an ordinary service agreement.The service concession contract is awarded following the same rules as the public works concession contract.
There are no particular regulations for the service concession contract.
The right to appeal is acknowledged for business operators, regardless of the public procurement/sector contract value.No differences are set between the classical system and the utility one.
The right to appeal is acknowledged in the case of business operators for public procurement contract values that are bigger than or equal to the European thresholds.Only the appeal elaborated against contracts concluded by entities developing relevant activities may be settled by conciliation.

Public procurement principles in practice
Public procurement principles play an essential part in legislation enforcement, if one also considers the fact that this legislation may not refer to all practical situations.These principles are the following ones: The contracting authority must guarantee the non-discriminating and equal treatment for all business operators, and it must encourage competition among them.The contracting authority shall not bias any of the involved business operators, and it will not provide any of the involved parties with unjustified advantages throughout the procedures.All business operators will have access to the same information package throughout the public procurement process.Mutual acknowledgement is one of the essential principles of EU and of the Community legislation.The contracting authority must secure mutual acknowledgement and the same conditions for EU business operators and for the products and services supplied or the works performed by these business operators on the EU market.Transparency: public fund use publicity and control must be provided in order to reduce corruption.It is important for the contracting authority to permanently inform business operators on all the activities and all the data referring to the procedure.Proportionality -it refers to securing the correlation between: the needs of the contracting authority; the object of the public procurement contract; the requirements that must be met.Efficient use of funds -this requires the authority to consider the economic advantages of the submitted offers, in order to obtain the optimal price-quality relation.Accountability -the contracting authority has the obligation to choose the most advantageous solution from the professional and economic perspectives that is provided on the market by an appropriate enforcement and observance of the public procurement legislation, as well as the obligation to adapt these solutions to its procurement needs by applying a particular awarding procedure.In order to achieve this, it is necessary for correctly prepared awarding procedure to consider the professional content and the schedule of the awarding procedure.The contract awarding criterion should not be the best price offer, but the offer that is the most advantageous from an economic perspective, taking into account, beside the price, other qualitative, as well as quantifiable criteria.

Risks in public procurement process
The public procurement system represents a significant part of the Romanian economic reality, having the same characteristics, both strong points and weaknesses.Here are the components of the public procurement system: the regulatory authority; contracting authorities; business operators; system supervisors.Various relations occur among these elements in order to achieve the general purpose, as elements interact and condition one another, enhancing or annihilating one another.Therefore, throughout the interaction among the components of the system, throughout the procurement process, such actions may occur with negative effects on the entire system.Risks -from the ethical perspective during the procurement process, refer to those uncertain, but probable events, whose occurrence may generate damage or negative impacts on certain community specific values.One must underline the fact that risks may become certain either because of a simple error in the development and administration of the procurement process, or because of a deliberate deviation from the existing legal provisions.In the public procurement process, the occurrence probability of a negative element is tightly connected to the value of the budget granted for that particular contract.At the European level, a set of risks have been identified, which are manifested throughout the development of any public procurement process, and which are construed as having general validity and applicability, considering the stage and relation in the public procurement process, according to the table below:

Conclusions
The commitment and the attitude of decisional factors within the contracting authorities in relation to public procurement ethical issues are major conditions for the application of certain measures for the implementation of the above-mentioned activities.
It is well known that an ethical procurement behaviour which is accepted by all the parties involved in the procurement process may limit or even avoid consequences of the following manifestations: -Unfair competition, as well as any action or deed that is contrary to fair usages in product purchasing, works performance and service supply activities; -Active corruption, which refers to someone deliberately promising, offering or giving, directly or indirectly, an undeserved benefit to an office holder, for personal or someone else's advantage, in order to perform or hinder the performance of an activity implied by their functions; -Passive corruption, which refers to an office holder deliberately requiring or receiving, directly or indirectly, an undeserved benefit to an office holder, for personal or someone else's advantage, or accepting an offer or the promise of such benefits, in order to perform or hinder the performance of an activity implied by their functions; -Conflict of interests, which refers to the situation when an employee of the contracting authority has a personal interest of a patrimonial nature that may influence the objective fulfillment of the tasks implied by their public position.The ethical procurement behaviour is represented by the use of a set of principles and rules, which all lead to the unaltered maintenance of social values.