How do Whistleblowers increase security in the public procurement sector?

23.3.2022 21:40
How do Whistleblowers increase security in the public procurement sector?

The public procurement sector is one of the areas covered by the provisions of Directive (EU) 2019/1937 of the European Parliament and of the Council. Therefore, people who report irregularities in this area are legally protected against any retaliation and contribute to the improvement of the quality of the workplace. Security for the public procurement sector is essential to avoid corruption or fraudulent situations.

What is public procurement?

Public procurement is a paid contract concluded between the contracting authority and the contractor. The public procurement system consists of detailed procedures that indicate how public entities should purchase goods or services. The contracting authority may be government administration and local government units. Moreover, it is also an element of public finances, which includes detailed solutions concerning the procedures for spending public funds.

Public finances include the state's monetary resources, which consist of the processes of collecting and distributing public funds held by the authorities. As early as 2010,regulations were implemented that introduced the obligation of management control to units in the public finance sector. Their goal was to ensure compliance of operations with the regulations and internal procedures, operational efficiency, protection of resources, the effectiveness of information flow, and risk management.

As in the case of other sectors, also in the area of ​​public procurement, there may be irregularities or situations in which the law is violated. In order to identify violations and eliminate such cases, a directive was created to protect Whistleblowers. Legal protection of Whistleblowers is essential to improve the enforcement of European Union law in the public procurement sector. It is also equally important that the rules are complied with, both by national contracting authorities and by entities that use the works, supply products, or provide a service.

What are the consequences of violations of public procurement activities?

Public procurement activities are defined by law and contain obligations that must be complied with by both the entities responsible for the preparation and conduct of the procurement procedure. Violation of these provisions may lead to distortions of competition, increase the costs of running a business and have a negative impact on the interests of investors, shareholders, or partners. The occurrence of such irregularities also adversely affects the functioning of the internal market, as any situations in which the law is violated reduce the investment attractiveness and increase the unequal treatment of enterprises in the Union.

In order to prevent this type of illegal practice, a directive has been adopted that protects Whistleblowers and imposes obligations such as:

- the need to implement channels for reporting irregularities,

- conducting internal remedial actions,

- management of the register of notifications,

- Whistleblower protection.

Moreover, the directive imposes on entrepreneurs the obligation to create internal procedures and channels for reporting irregularities. Whistleblower is the system that complies with the legal requirements of the Act and guarantees the protection of the identity of the persons who submit the reports.

Which public procurement legislation is mentioned in the Whistleblower Protection Directive?

Directive (EU) 2019/1937 of the European Parliament and of the Council defines provisions in the field of:

- granting concessions,

- procurement in the field of defense and security,

- fulfillment of orders by entities operating in the sectors of water management, energy, transport, and postal services,

- coordination of procedures for the award of contracts for works, supplies, and services by institutions orentities in the fields of defense and security.

In summary, public procurement is legally regulated by statutes that must be adhered to and the methods provided for therein must be followed. In order to prevent corruption, favoritism, fraud, and to prevent political pressure from others, it is necessary to follow the guidelines of the directive, which ensure that reporting of irregularities may not have any repercussions under the law. By signaling violations, it is possible to improve the workplace and eliminate problems at an early stage of their occurrence. People from the public procurement sector can use the SignalR system, which is designed to send, receive and handle notifications.