Reforms to Promote Competition in Government Procurement in Southeast Asia: Achievements and Constraints

Two key principles of government procurement are value for money for the end user agencies and the public, and fairness in the treatment of suppliers and contractors based on equal access and impartial evaluation of bids. It is widely recognized that these can be best guaranteed through competitive tenders and quotations. While competition in government procurement was previously substantially curtailed in most states in Southeast Asia, a series of reforms in the last ten years or so have been introduced with a view to widening competition. Priority has been given to the adoption of open tenders as the norm, and imposing restrictions on less competitive methods of procurement. To achieve greater competition, reforms have also been introduced to improve transparency and to combat corruption in the procurement process. Nonetheless, obstacles remain to achieving a fully competitive procurement market in most states. These include continued preferential arrangements, loopholes and ambiguities in the reforms, continuing high levels of corruption, limitations of transparency, and shortcomings in the system of accountability of procuring entities. Three reasons are given to explain why obstacles remain, namely a protectionist belief in promoting the domestic business sector, vested interests amongst political, administrative and business elites to limit competition, and a lack of institutional capacity in procuring entities to manage complex competitive tenders.