Accelerate Open and Good Governance Practices in Goods and Services Procurement (ID0034)
Action Plan: Indonesia Action Plan 2014-2015
Action Plan Cycle: 2014
Lead Institution: Policy Institute for Procurement of Goods / Services (LKPP)
Support Institution(s): NA
Policy AreasAnti Corruption and Integrity, Open Contracting and Public Procurement, Public Participation, Public Procurement
Procurement of goods and services has always been in the top-5 of corruption prone areas. In this action plan, the public is invited to supervise the process together. We expect to achieve that through publication of black listed company/ personnel by the government that can be used as surveillance tool in the procurement of goods and services.
IRM Midterm Status Summary
7. Accelerate Open and Good Governance Practices in Goods and Services Procurement
Procurement of goods and services has always been in the top-5 of corruption prone areas. In this action plan, the public is invited to supervise the process together. We expect to achieve that through publication of black listed company/personnel by the government that can be used as surveillance tool in the procurement of goods and services
1. Encourage community involvement in monitoring the implementation of the procurement of goods and services
a. The existence of regulations governing the obligation to publish a black list
Responsible Institution: Policy Institute for Procurement of Goods/Services (LKPP)
Supporting Institution(s): None
Start: 28 May 2014 End: 31 December 2014
This commitment came from Bappenas who directed the Policy Institute for Procurement of Goods/Services (LKPP) to include it in OGP action plan. In Indonesia, public procurement is one of the most corruption-prone areas. The objective of this commitment is to increase transparency and public accountability by creating regulations for publishing blacklist information and provide the public with real-time information regarding blacklisted companies/personnel.
The obligation to publish blacklisted providers online and in real time is part of Peraturan Presiden Nomor 54/2010 on government goods and services provision. The head of the LKPP first issued technical operational guidelines (Peraturan Kepala LKPP Nomor 7/2011) 1 for the blacklist in June 2011. The guidelines were updated in August 2014 to include a provision on the blacklist in Government Goods and Services Provision (Peraturan Kepala LKPP Nomor 18/2014) 2.
According to an official interviewed, there were no obstacles to implementing this commitment.3 This is due in part to the fact that the work plan regarding publishing blacklist regulations was finalized in 2011 and the blacklist website has been operational since 20124.
All parties involved in material and service procurement can view their status in real time and the public can search the information by the identities of material and service providers (name of company/person, name of director, tax number), address, validity period, date of publication, and the decision letter for the inclusion on blacklist. While the information on blacklisted companies/personnel is updated regularly, the searchable fields have not been updated since 2012.
Two types of information mandated in the 2011 and 2014 LKPP regulations,–the name of the work package and value of total HPS (individual estimated price) –are not included in the information fields on the blacklist website. The absence of these two pieces of information makes it difficult for the public to understand which goods and service provision project led to the provider being sanctioned and the monetary value of the sanction.
In addition, the information displayed on the website often does not include important data points including the name of the director, tax number of the director and tax number of the company. The government officials interviewed explained that this missing data is the result of human error on the part of the budget user (Pengguna Anggaran or PA)/ proxy of the budget user (Kuasa Pengguna Anggaran or KPA) who sent the penetapan penyedia (decision of winning bidder) to the system. The LKPP only serves as a data aggregator for information sent by the PA/KPA and does not currently have the capacity to verify blacklist information for completeness. 5
The government self assessment report did not indicate any plans for resolving the incomplete data nor did it address the absence of the two types of information mandated by the 2011 and 2014 regulations.
Did it matter?
This commitment, as written, does not address the underlying issues preventing the blacklist website from serving as an effective transparency and accountability resource for the public and civil servants alike.
The most pressing problem is a lack of awareness and use of the blacklist website by government officials during the procurement process. While the LKPP aggregates and disseminates information on blacklisted companies/personnel, in practice procurement committee members do not check the blacklist website during the bidding process nor does the PPK (commitment-making officials) verify the status of goods and services providers before signing contracts. This leads to situations such as the case of construction of the Jalan Baru border of Sanggau-Sekada city in 20146 where a blacklisted company was awarded a government contract. The government source interviewed indicated that public awareness blacklist website needs to be improved but that there is no dedicated budget for training civil servants to use the website as a resource7. One CSO stakeholder interviewed appreciated this commitment and highlights its importance in reforming government procurement.8 However, it is suggested that the blacklist could be extended to company shareholders and not only the companies (the IRM note that this could be possible when there is a clear evidence establishing shareholder’s malicious intent and the company’s operation).
The second problem is the lack of publicly disseminated information regarding the early removal of the provider names from the blacklist before the end of sanction period (2 years). The website should have informed the public if there are providers which are removed from the blacklist (due to Court’s decision declaring them to be “clean”). The 2014 LKPP regulation created a cancelation mechanism for providers to be removed from the blacklist following a court ruling. 9 In practice, LKPP directly deletes the record of the blacklisted provider once a ruling is issued and does not issue an explanation for why the provider was removed. It is therefore very difficult for the public to monitor the validity of the blacklist cancelation because there is no record on the court ruling explaining the basis for removing the provider from the blacklist. The public can submit questions regarding the matter to the LKPP information and documentation management officer (PPID) but there is no public record of the blacklist cancellation, which undermines transparency and accountability efforts.10
Finally, though the commitment seeks to involve the public in monitoring goods and services procurement, it is unclear from the language of the commitment how the LKPP intended to involve the public in using the information on the blacklist website. While the public could play an important role in verifying the status of providers, currently there does not exist a clear channel for citizens to report blacklisted providers competing for government contracts. It is unclear from the commitment language and the GSAR whether these issues will be addressed in future action plans.
In order to increase procurement transparency, one stakeholder, Sunaryanto recommends that procurement contracts be published and publicly available.11
IRM researcher recommends the following steps:
1. In order for the public to better understand which work packages are easily violated, the portal should include information on name of work package and total HPS (self estimated price) value in portal, in order to create better public understanding about which work packages are more easily violated.
2. To create a comprehensive list of providers who were removed from the blacklist. This list would include the same personal identification information as the blacklist and include the final court ruling and a short description of the reason for removal from the blacklist.
3. Set an expiration period for information on providers who were removed from the blacklist to be removed from the website.
4. Report to the LKPP the name of the budget user/ budget holder who did not collect complete data.
5. The Monitoring and Evaluation agency in the Bureau of Organizational Planning and Implementation should provide on the blacklist webpage a complaint/ report channel for the public to report suspicious activities. This should include a corresponding duty to respond to such complaint in a timely manner.
6. Finally, the publication of procurement contracts could have a potentially transformative impact on governance if the government procurement agency (LKPP) formulates legislation that makes publication of such contracts binding for all public officials.
1 See http://www.lkpp.go.id/v3/files/attachments/5_cSzLjfZtHnaCKJXRLaYeVsaxwwTLyySd.pdf (accessed 7/4/2015 3:26 PM)
2 See http://www.lkpp.go.id/v3/files/attachments/5_QRgwAOsaCtxwxirfEMiFDGErJQsjgoqT.pdf (accessed 7/4/2015 3:28 PM)
3 Interview with Tjipto Prasetyo Nugroho, 2015-06-08
5 Widiyatmoko, Pius, interview by phone with Tjipto Prasetya Nugroho, LKPP, July 23, 2015
6 See http://lensakapuas.com/aneh-sudah-diblacklis-tapi-dapat-proyek/ (accessed 7/23/2015 12:38 PM)
7 Widiyatmoko, Pius, interview by phone with Tjipto Prasetya Nugroho, LKPP, July 23, 2015
8 IRM Researcher, interview with Ilham Saenong, October 15, 2015
9 See article 19, Head of LKPP Regulation No.18/2014
10 Widiyatmoko, Pius, interview by phone with Tjipto Prasetya Nugroho, LKPP, July 23, 2015
11 Widiyatmoko, Pius, interview by phone, October 15, 2015