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How COVID-19 has accelerated procurement reform in Ecuador
National Public Procurement Service, Ecuador,
5 minute read
Ecuador has used open data and social media to combat a wave of corruption in public buying during the pandemic
Summary
the pandemic has created conditions in which corruption can flourish
rooting out corruption depends on access to open data and an engaged public
social media is a powerful tool in both exposing wrongdoing and promoting trust
The problem
Across the world, COVID-19 has brought with it not just a health emergency but a crisis of confidence in public buying.
In September 2020, Transparency International reported that 1800 cases of corruption had been reported by whistleblowers during the pandemic .
Before COVID-19, Ecuador’s public procurement agency, SERCOP was in the process of upgrading its e-Procurement system to use the Open Contracting Data Standard, allowing users to disclose data and documents at every stage of the contracting process.
At the start of April SERCOP unveiled a public monitoring tool for emergency buying on its e-Procurement platform.
A video released via Twitter showed how to search for contracts issued during the pandemic and the public were encouraged to become whistleblowers, reporting cases of wrongdoing through an online form.
Using social media also enabled users to provide feedback on the tool in real-time, identifying areas to improve.
A image shared on Twitter by SERCOP encouraging the public to help monitor emergency buying
only use emergency buying to contract works, goods and services related to the pandemic
publish the details of emergency contracts on the public procurement portal within 48 hours
monitor suspicious behaviour from suppliers, such as bid rigging and 'price gouging', charging excessive prices to take advantage of increased demand
The results
The open data provided by the tool enabled several cases of price gouging to be exposed.
One of the worst involved the country's social security department, the IESS, buying thousands of surgical masks at US$12 each, three times the normal price.
Following the exposure of the price discrepancies on Twitter, all procurement operations within the IESS were halted.
US$200m of public money had been spent through emergency buying between April and July 2020
20% of the contracts went to just ten companies
the highest items by value included surgical masks and gloves, drugs such as paracetamol, and Covid testing kits
The report prompted investigative journalists to delve further, revealing that two individuals had received over $15.3m in public money.
Data showing that over a fifth of contracts were awarded to just 10 suppliers; image credit: Fundación Ciudadanía y Desarrollo
Challenges
The FCD report pointed out several areas in which the data and the tool itself could be improved:
• searching for information, particularly unit prices, was not a simple process and would take too long for most members of the pubic
• contracts did not indicate which buying procedure, for example direct award, was used during the emergency
• coding errors meant that many contracts had to be manually checked to ensure that data was correct
COVID-19 has made people aware of the costs of bad buying. The costs of getting it wrong have been uniquely apparent.
Next steps
Since the release of the public monitoring tool, over 45 corruption-related investigations have been launched in Ecuador, with an estimated loss of over US$12 million in overpayments.
As well as improving the data issues in the tool, the SDP report recommended changing Ecuador's procurement regulations to take account of emergency situations and prevent another crisis being abused in the future.
