Transparency Principle in Iran’s Public Procurement in the Light of WTO and EU Rules

دانشنامه حقوق اقتصادی

Volume 27, Issue 18, June 2021, Pages 295-324   

Document Type: Scientific research

DOI: 10.22067/lowecon.2021.49340.0

Authors

Mostafa Rezaei¹; Assadalloh Yavari^{* 2}

¹PhD Candidate in Public Law, Faculty of Law, Shahid Beheshti University

²Assistant Professor, Faculty of Law, Shahid Beheshti University

Abstract

 
Extended Abstract
Introduction
Public Procurement involves a large amount of government economic activity, and because they are financed from the public budget, the principle of transparency must rule to them. Transparency is an important element in public procurement policy and law. Particularly given the socially significant nature of the system needed for the proper use of public money by all public institutions and commercial companies, the basic principles governing such spending should be well defined, and the most important of these principles is transparency. In all aspects of public procurement the public sector can influence the market structure, affect the competitive process between the market participants, and affect significantly the economic behavior of the participants in procurement processes. As a rule, contracting authorities rely on the competitive environment in public procurement to achieve the most efficient use of their budgets. They are interested in buying goods and services at low prices and of high quality, since their resources are usually more constrained than the needs to be met. In a market economy, an effective competitive process can lead to lower prices or higher quality, or more innovation in the goods or services offered. So transparency promotes competition, guarantees equality and equal treatment prevents corruption and achieves legal certainty. Therefore, one of the most important reasons for legislation in this area is transparency. In general, transparency in public procurement includes six rules: 1. Advertising contracts throughout the country, 2. Establishing competition among tenderer’, 3. Excluding tenderer from participating in the tender only for legal reasons, 4. Observance of time periods in different stages of the tender to ensure the presence of all companies in the tender, 5. Awarding the contract based on the results of the competition based on the criteria mentioned in the law and contract notice, and 6. Informing the decisions about the tender to the tenderer. However, despite the fact those more than two decades, enacting of the public procurement law in Iran, an analysis of this law and its regulations in the light of the rules of the World Trade Organization and the European Union show that public procurement in Iran has many weaknesses in terms of transparency.
Theoretical framework
This study first of all analyzes the relationship between the transparency principle and other principles of public procurement like equal treatment, competition and integrity. Then, the relationship between the transparency principle and confidentiality and protection of trade secrets is discussed. Finally, we focus on elements of transparency in public procurement like a publication of laws and regulations, documentation, a publication of contract notice and contract award notice, access to all information and documents about the process of procurement and access to verdicts of the judicial and quasi-judicial authorities.
Methodology
This study attempts to answer the main questions of this research based on the descriptive-analytical method by criticizing and analyzing laws and regulations regarding public procurement with a comparative study of European Union and WTO law.
Results & Discussion
Analysis of laws and regulations regarding public procurement regulations in the light of the rules of the WTO and the European Union show that public procurement in Iran has many weaknesses in terms of transparency, including the lack of obligation to announce cost in the contract notice, lack of clear criteria on the proliferation of newspapers, lack of obligation to inform qualitative selection, the non-publication of regarding regulations and verdicts of judicial and quasi-judicial authorities and lack of contract award notices. So these elements of transparency there aren’t in public procurement law and its regulation of Iran and these rules should be amended. This situation provides grounds for increasing corruption in public procurements and hurts to integrity of public procurements. In addition to, rights of tenderer might be violated in this circumstance. Therefore, in addition to documenting and protection of tenders’ information, it is necessary to inform the public and access information. In fact, the purpose of transparency and documentation is to make people aware of the events so that they can hold officials and executive bodies accountable based on this awareness. Also, information about tenders is important in terms of tenderers' rights in order to ensure the integrity of the procurement process; otherwise they can use this information to claim the right.
So, to make transparent of public procurement process, it is necessary to document and inform this process, publish all laws and regulation, publish contract notice and contract notice and all information and documents about the process of procurement and verdicts of the judicial and quasi-judicial authorities is accessible. It should also be noted that transparency governs all stages of the public procurement process and that information about that must be equally available at all times.
Conclusions & Suggestions
According to Findings of this research is necessary to codify and amend the relevant laws and regulations: contracting authorities are required to announce the cost of the transaction in the contract notice; Instead of publishing public procurement in newspapers, they should all be published in a single official system or journal; Qualitative selection criteria should be announced in the contract notice; The verdicts of the judicial and quasi-judicial authorities should be published in this regard and the contract authorities should be required to publish the contract award notices.

Keywords

Public Procurement; Transparency; Access to Information; Documentation; Competition

Supplementary Files

Transparency Principle in Iran.doc

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