Conflict of Interest

Conflict of Interest

As I was reading the Zambian Public Procurement Act No. 8 of 2020, the issue of conflict of interest got my attention. According to the PPA 8 of 2020 section 19 (6) a person has a conflict of interest with respect to a procurement if that person or a relative of that person:

(a)???Seeks, or has a direct or indirect pecuniary interest in another person who seeks, a contract for the procurement; or

(b)???Owns or has a right in any property or has a direct or indirect pecuniary interest that results in the private interest of the person conflicting with that person’s duties with respect to the procurement.

Rather than define conflict of interest, I would want to know how to identify it in its different manifestations and unique situations. While the Zambian Public Procurement Act is clear on actual conflict of interest, there seems to be a grey area on perceived conflict of interest.?My understanding of Conflict of Interest is in two-folds, a position to be influenced and a position that appears to be influenced. I appreciate that in the two forms of conflict of interest our personal or private interest threatens to compromise our duties.

An actual conflict of interest occurs when an employee making the financial decision holds a position where he/she realistically may be influenced. This does not mean the employee has acted on the conflict; it only means that the conflict exists, such as when a potential vendor is a relative of the employee making the procurement decision. In a perceived conflict of interest, the employee holds a position where he/she can appear to influence or be influenced e.g., the head of the procurement could have a financial interest in a potential vendor. While he/she does not make the actual procurement decision, it can be perceived that he/she may influence the buyer who does.

• Jorge Lynch stated that as procurement practitioners, we have the responsibility to manage the procurement process within the procurement legal framework and principles (Conflict of Interest in Public Procurement, 2021). Our personal preferences, and those of our family, friends and associates, should not interfere with or influence the decisions we make in the execution of our official duties.

In addition, it is of great importance to establish robust procedures and processes that demonstrate strong probity principles and minimize the potential for procurement practitioners to be exposed to such risks or allegations.?While most employee contracts have clauses forbidding staff members in participating in tenders within the organization, much needs to be said about former employees with influential ties at their former places of work. Would such a situation lead to a conflict of interest for procurement practitioners or pose a challenge for entrepreneurship opportunities???

Unfortunately, mistakes do happen and the response to a probity breach should be appropriate for the nature of that breach.

Let me categorically state that Conflict of interest and corruption are not the same thing. Corruption usually requires an agreement between two partners and a bribe/payment/advantage of some kind. A conflict of interests on the hand arises where a person may have the opportunity to put private interests before his or her professional duties.

Some ‘Red Flags’ in the procurement process, which could indicate a conflict of interest might be present, may include

• The person overseeing the award of a contractor has a relationship with the best evaluated bidder.
• Overuse of direct bidding.
• One supplier often favored.
• ?No records of why a specific vendor was selected.

According to the Organization for Economic Cooperation and Development (Managing Conflict of Interest in Public Service, 2016), the Government of South Australia’s Department of Planning, Transport and Infrastructure has listed situations that would be considered as a material conflict of interest of a staff in relation to a company submitting a tender including:

1. A significant shareholding in a small private company which is submitting a tender;
2. Having an immediate relative employed by a company which is tendering, even though that person is not involved in the preparation of the tender and winning the tender would have a material impact on the company;
3. Having a relative who is involved in the preparation of the tender to be submitted by a company;
4. Exhibiting a bias or partiality for or against a tender (e.g. because of events that occurred during a previous contract);
5. A person, engaged under a contract to assist the Institute with the assessment, assessing a direct competitor who is submitting a tender;
6. Regularly socializing with an employee of tenderer who is involved with the preparation of the tender;
7. Having received gifts, hospitality or similar benefits from a tenderer in the period leading up to the call of tenders;
8. Having recently left the employment of a tender;
9. Considering an offer of future employment or some other inducement from a tenderer.

In conclusion, it is important to impede conflict of interest of anyone involved in the evaluation, selection and contract monitoring processes. Therefore, whenever we find ourselves in a situation of potential, perceived or actual conflict of interest, we must take the necessary action to disclose it by formally declaring ourselves disqualified from participation in a particular procurement process due to possible bias given our personal and/or financial interest.

Conflicts of interest are not wrong in themselves. Any conflict of interest should be properly identified, declared effectively and transparently managed. Disclosing actual or potential conflicts is a continuous process, because conflict situations may change over time.

“Let us not just be objective but also be seen to be objective in our daily execution of duties.”