Transparency, accountability and effectiveness of the public procurement system

The procurement of public goods and services in Indonesia has been decentralised. Presidential Regulation 16/2018 transformed the public procurement situation in Indonesia, which now promotes the independence of the procurement unit, electronic catalogues, electronic purchasing issues and transparency of the government procurement.¹ As mandated in the regulation, each government agency, at the central and regional levels, needs to form a special unit, named the Goods and Services Procurement Work Unit (Unit Kerja Pengadaan Barang dan/Jasa, UKBPJ), to regulate procurement, both electronically and manually.

Government procurement is centralised through the unit. Unfortunately, UKPBJ human resource capabilities are limited, as are the security protections for members of the unit who can face threats to ensure a particular company wins the contract; if the company does not succeed, officers can face recriminations.. The root of the challenge is the lack of political support from the regional and unit leaders.²

In addition, to respond to the current COVID-19 pandemic, central procurement agencies, the Government Goods and Services Procurement Policy Agency (LKPP) has issued circular letter No. 3/2020 to provide guidance for the ministries, agencies, and local governments for carrying out procurement in an emergency situation. Besides, this circular letter is a follow up, Presidential Instruction No. 4/2020, related to budget reallocation and a refocusing of activities.³

Challenges to effective commitment implementation
Public procurement legislation in Indonesia ensures the transparency of information in the public procurement process. However, the transparency clause in the regulation only applies to the tendering stage; there are no information transparency requirements after this phase. There is no procurement law in Indonesia, although civil society organisations have proposed draft legislation since 2012.⁴ The lack of a unified public procurement law makes enforcing legislation difficult.

Besides problems with legal instruments, Indonesia has an electronic procurement portal called INAPROC,⁵ which provides information on procurement announcements in each of the procurement agencies’ e-procurement portals at central and local levels. However, there is also the LPSE,⁶ a separate portal that provides information on individual tenders to the contract signing process. Another important portal is SiRUP,⁷ which stores data and information on the annual public procurement plan. There are more than 25 portals or applications created to provide information at every stage of public procurement.

The above conditions indicate that there is no single database of machine-readable public procurement information available and accessible to the public. Moreover, it is not easy to analyse public procurement’s overall implementation as manual procurement is still common in Indonesia, while electronic procurement is not yet a standard procedure. Public procurement regulations remain fragmented.

Opportunities to accelerate commitment implementation
Indonesia has to enact a law on public procurement and ensure that the public can access all information related to public procurement in an easy-to-reach place. At the same time, as mandated by the presidential regulation, it is crucial to strengthen the UKPBJ official capacities.⁸

In addition to the procurement process and to prevent corrupt transactions from being carried out in the pre-procurement phase, the UKPBJ can participate and provide input in procurement planning forums. The unit has undertaken similar initiatives in several regions by taking part in decisions based on procurement records and company track records.

Recommendations
Issue a public procurement law based, for example, on that previously proposed by CSOs.

The LKPP should encourage local leaders or unit leaders to ensure strong independence and operational support at UKPBJ.

The government needs to promote more effective implementation of open contracting by the publication of contract data in an accessible format, using the Open Contracting Data Standard (OCDS) as a guiding framework, introducing geotagging and creating data visualisation.