PUBLIC PROCUREMENT REGULATORY COMMISSION

PROCUREMENT CODE OF ETHICS

December 2016

PROCUREMENT CODE OF ETHICS

In conformity with Article 91.2 of the Law No. 04/L-042, on Public Procurement of the Republic of Kosovo, amended and supplemented with the law No. 04/L-237, law No. 05/L-068 and law No.05/L-092, Public ProcurementRegulatory Commission compiles and draws Code of Ethics, which should be respected by allpublic servants, civil servants and other persons employed by the contracting authorities.

“Procurement Code of Ethics”, belongs to Part Dof the public procurement rules. It includes threeannexes of standard forms, as: “Declaration under oath for the Procurement Officers”,“Declaration under oath for the evaluation committee members” and “Declaration under oath for the employees of the PPRC,CPA and PRB”.

Section1

Foreword

Objective and purposeof the Code of Ethics

1.1 Public interest and public values are founded on Ethics which constitute the source of most procurement principles. Ethics also includes the core values upon which any public profession should be based. It is essential that contracting authorities, public procurement professionals, and public procurement stakeholders adhere to a well-defined and established ethical code.

1.2 The objective of this Code of ethics (the Code) is to outline the core principles that must be followed to promote ethical values. It covers those principles and values as well as practices to be pursued by all professionals engaged in order to achieve public procurement goals and to safeguard the public interest.

1.3 The objective of the Code is also to set out the core values and norms of ethical behavior, to define recommended practices, and to set the code of conduct between contracting authorities and tenderers/contractors.This Code is about self-awareness, ensuring that everyone in policing feelsable to always do the right thing and is confident to challenge colleagues irrespective of their rank, role or position.

1.4 It is committed to ensuring that the Code is not simply another piece of paper, poster or laminate, but is at the heart of every policy, procedure, decision and action in Public Procurement.Evidences tell that just having simply a Code of ethics is notenough to reduce unprofessional behavior - it needs to be talked about and discussed as an everyday business consideration. If the public don't have the confidence to trust the police to be fair, acting ethically and in their best interests, they are less likely to assist the police in upholding the law.

1.5 Thus the Code is established and upgraded to encourage an uncompromising adherence to a level of integrity which will create a heightened awareness and promotion of ethical behaviors and best practices. It points the way to be followed by all procurement professionals and others engaged in the rendering of public services through procurement. Itis also intended to guide all those personnel or organisations who participate,at whatever stage and at whatever level of input, directly or indirectly, in procurement processthat uses monies provided from funds rose via the Kosovo Consolidated Budget(KCB) and other public funds or is legallyrequired to follow the Public Procurement Law and procurement rulesof Kosovo.

Section 2

Statement on Purchasing Policy

2.1 It is the policy of the Public Procurement Regulatory Commission (PPRC) to promote andbalance the objectives of protecting the integrity of the Government of Kosovo and theexpenditure of funds provided by the KCB, and other publicfunds by prescribing essential standards of ethical conduct, without creating unnecessaryobstacles to providing an efficient and effective public service.

2.2 Those persons who provide any input, in whatsoever form or contribution, in part or in full,and have been or will be, involved in the process of selecting economic operator(s), directly orindirectly, for the provision of services, goods, equipment, projects, works, consultancy orother such requirements, which are obtained from monies obtained from the KCB and other public funds, or are legally required to follow thePublic Procurement Law and procurement rules of Kosovo, will be obliged to conduct themselves inthe following manner.

Section 3

Principles

Those persons who provide any input in whatsoever form or contribution, in part or in full, and have been or will be, involved in the process of selecting economic operator(s), directly or indirectly are expected to apply and uphold the following principles:

3.1 Integrity

The integrity establishes trust and thus provides the basis for reliance on their professional job and judgment.All procurement officers will maintain an unimpeachable standard of integrity in all their private and professional business relationships and work activities, both inside and outside the organizations in which they are employed.

It is incumbent upon all persons that deal with the procurement activities, to optimize the use of all the resources for which they are responsible to provide, so as to maximum the benefit to their employing organization or on behalf of an organization for which they so provide. That means that related persons shall perform their work with honesty, diligence, and responsibility. They shall not knowingly be a party to any illegal activity, or engage in acts that are discreditable to the PP profession or to the organization. They also must respect and contribute to the legitimate and ethical objectives of the organization.

3.2 Confidentiality

Related persons respect the value and ownership of information they receive and do not disclose information without appropriate authority unless there is a legal or professional obligation to do so.

Where there is any element or suspicion of behavior, which seems inappropriate or raises any ethical concerns, at any stage in the course of a procurement action, then any person(s) who observes or acquires knowledge of such a behavior, is required to immediately report that concern to a senior colleague or superior, or report such behavior to the Ministry of Internal Affairs.

3.3 Proficiency and Competency

Related persons apply the knowledge, skills, and experience needed in the performance of procurement services.Purchasing decisions should be made on reasonable assessments of availability, suitability, quality, service, lowest cost or most economically cost, technical specifications, integrity and objectivity, free from any personal considerations or benefit. Every person that is involved in any form of the procurement activity will ensure that they will not use their authority or position, in any situation, for personal gain, in whatsoever form of benefit.

All procurement officers will continually foster the highest possible standards of professional competence amongst those for whom they are responsible and with their associates. Additionally it is the duty of all officers involved in procurement, to enhance their own knowledge, technically, legally and commercially and to continually improve the status and standing of the procurement profession.

All persons that deal with public procurement will be expected to comply in confidence the Public Procurement Law of Kosovo, other Laws of Kosovo and inter-governmental agreements signed within the Government of Kosovo and international institutions.

3.4 Objectivity

Related persons must exhibit the highest level of professional objectivity in gathering, evaluating, and communicating information about the procurement activity or process being examined. They also should make a balanced assessment of all the relevant circumstances and are not unduly influenced by their own interests or by others in forming assessments and judgments or participate in any activity or relationship that may impair or be presumed to impair their unbiased assessment.

This participation includes those activities or relationships that may be in conflict with the interests of the organization.Procurement officers shall not accept anything that may impair or be presumed to impair their professional judgment and should disclose all material facts known to them that, if not disclosed, may distort the reporting of activities under review.

Section 4

Rules of conduct

4.1 Declaration of interest

Where there may be any personal interest, directly or indirectly, either through business, familyor friends or through other associations, which may influence or might reasonably be seen byothers to influence that persons judgment and impartiality, in any matter relevant to his or herduties, then that interest should be clearly declared to superiors, before any action or furtheraction is taken in the procurement process.

4.2 Separation of duties

It means that the authority of a person(s) to approve and sign approval in one area of responsibility does not also include those of another area of responsibility. The specialist disciplines of contract preparation (legal & technical), contract implementation and payments (invoices) must be kept as separate activities with separate signatory approvals. The Chief Financial Officer, the Procurement officer and the receiving Unit/Project manager may not sign any documentation outside their area of responsibility

4.3Gratuities and kickbacks

It is an offence to bribe or attempt to bribe any official or former official, directly or indirectly,in what so ever position or to solicit, demand, accept or agree to accept from another person, agratuity or an offer of employment in connection with any decision, approval, disapproval,recommendation, preparation of any part of a program requirement or purchase request,influencing the content of any specification or procurement standard, rendering of advice,investigation, auditing, or in any other advisory capacity in any proceeding or application,request for ruling, determination, claim or controversy, or other particular matter pertaining toany procurement requirement or a contract or subcontract, or to any solicitation or proposal thatmay be pending or in process.

4.4Confidentiality and accuracy of information

The confidentiality of information received in the course of duty should be respected and shouldnever be used for personal gain. Also any information given in the course of duty should be trueand fair and never designed to mislead participants or colleagues, in any part of the procurementprocess.

4.5Registered Economic Operators

No individual or organization is allowed to deal with or purchase from, to agree to or to sign, anycontract, with any organization, that is neither a registered Kosovo company and/or does not payKosovo taxes. This clause applies to Economic Operators who function and operate within Kosovoterritory.

4.6Fair Competition

Every effort should be made to create an equal and fair competition between Economic Operators. The Economic Operators should be confident that the procurement process, the specification, its evaluation arestrictly controlled and the process conducted openly and transparently and in compliance withthe Public Procurement Law.

4.7Contractual Obligations

Contracts are legally binding agreements between the parties and therefore care needs to be taken atall stages, within the contract process. No changes may be made by either party, without theexpress agreement in writing, of both parties. Additionally, special attention needs to be taken,where potential changes may cause cost increases to previously committed funds.

4.8Business gifts and Hospitality

Business gifts, other than items of very small intrinsic value, such as end of year promotionalpens, diaries or calendars, should not be accepted. If there is any doubt, then such an offershould be brought to the attention of a supervising official.

Very modest hospitality is an accepted courtesy of a business relationship. However, anyhospitality accepted should not be significantly greater than the recipient’s employer would belikely to provide in return.The recipient should not allow him or herself to reach a position whereby he or she might be ormight be deemed by others, to have been influenced in making a business decision, as aconsequence of accepting such hospitality:

Factors to be considered if offered a gift or the offer of hospitality:

a)Motive of the donor, i.e., whether the gift is a token of appreciation or a bribe;

b)Value of the gift or the hospitality;

c)Type of gift or the nature of the hospitality;

d)Manner in which the offer is made, i.e. openly or surreptitiously;

e)What strings, (if any, are attached)?

f)What impression the gift or hospitality will make on superiors, colleagues, subordinates;

g)Bear in mind the human propensity to always think the worst;

h)What would be the employer's reaction, if the matter was brought to his attention?

i)Whether the buyer can honestly be satisfied that the gift will not influence his/her objectivityin dealing with Economic Operates.

What is acceptable?

j)Minor hospitality in the provision of courteous food, biscuits/cake, soft drinks etc.;

k)If the individual does not have transport, then at the end of visit, the organization provideslocal transport to the nearest connecting transportation Centre.

What is not acceptable?

l)Free tickets to sports meetings, theatre, art galleries, entertainment venues or similar;

m)Paid weekends away, free travel or air flight tickets, holidays, accommodation in Hotels etc.;

n)A paid per diem, payment of any travel costs, either in or out of the country;

o)Offers of employment for the individual, family, friends, associates;

p)Assistance or gain, in what so ever forms, to family, friends, or business associates basically,all forms of gifts or hospitality should be strictly avoided.

4.9 Use of Assets

The practice of using public funded property in the form of assets, vehicles, equipment, servicesor taking advantage of official contracts of the organization, for own or others use, should bediscouraged. If there is a valid reason for allowing such an action, then the action may only beundertaken with the approval of the Head of the Organization. Should there be any consumablesitems used during the personal use, then the cost of the consumables used, must be paid for bythe individual concerned.

4.10 Allocation of cost or expenses

All costs and expenses occurring, whether directly or indirectly, and associated either withhospitality or any part of the procurement process, a site or works inspection, an overnight stayin a hotel, airfares or transport costs, preparation of models or drawings, equipment preparation,testing or test parts, are to be paid solely by the Government organizations or contractingauthorities responsible for creating those costs and expenses.

Section 5

Conflicts of interest

5.1 Public procurement, which is at the interface of both public and private sectors is an area particularly vulnerable to conflict between public officials’ duties and their private interests. Conflict of interest arises when public officials’ decisions during the public procurement are influenced by their private interests. For instance, common sources of bias in public decision-making include financial interests, family relationships, and post-employment. If not adequately identified and managed, these conflict-of-interest situations provide opportunities for public officials to take advantage of their public position for their personal benefit.

For the purpose of this code,conflict of interest means any situation where contracting authorities or procurement service provider`s staff members of either that acting on behalf of the contracting authority are involved in a procurement procedure that could influence the outcome. Or in the other words that procedure could have, directly or indirectly, a personal financial benefit, economic or any other interest that could be perceived as a compromise to their impartiality and independence in the context of the procurement procedure.

5.2 Conflict of interest in public procurement could emerge not only at the individual/personal level, but also at the level of the organization as a whole. Thus it can be clearly divided into “personal” and “institutional” types; each has its circumstances for conflict and its manifestations:

Preconditions for “personal” conflict of interest:

  • A willed lack of transparency.
  • Some official functions involve decision-making based on subjective (personal) appraisals.
  • Imperfect or lack of accounting, monitoring and audit system.
  • Lack of regulations to settle emerging conflicts of interest.

Preconditions for “organizational” conflict of interest:

  • Differing objectives of a public office/department and the state because of misunderstandings or inaccurate/ambiguous formulation of departmental tasks.
  • Short-term plans for organization prevailing over long-term ones.
  • Imperfect legislative, monitoring and audit systems.

5.3Procurement officers shall at all times act in a manner which is consistent with theirresponsibilities to their position and shall exercise particular care that there is nodetrimental effect to their organization, which results from conflicts between their interestsand those of the organization.

5.4 There are three specified points of a public procurement procedure where conflict of interest could arise:

  • within the Contracting authority
  • between the Contracting authority and Tenderer
  • between the one prepared the technical specification/other supporting documents and the Tenderer

5.4For the purposes of this statement, an individual is considered to have a conflict of interestwhen the individual, or any of his family or associates:

a)Has an existing or potential financial or other interest which impairs or might appear toimpair the individual's independence of judgment in the discharge of responsibilities to theOrganization; or

b)May receive a material, financial or other benefit from knowledge of information which is ofa confidential nature. The ‘Family’ of an individual includes his or her spouse, parents,siblings, children and other relatives.

5.5An “Associate” of an individual includes any person, trust, organization, or enterprise,in or with which the individual or any member of his or her Family:

a)Is a director, officer, employee, member, partner, or trustee;

b)Has a financial interest that enables him or her, acting alone or in conjunction with others, toexercise control or influence policy significantly; or

c)Has any other material association.

5.6 If an individual believes that he or she may have a conflict of interest, the individual shall promptly and fully disclose the conflict to a senior officerin the organization. The person shall refrain from participating in any way in the matter to which the conflict relates, until the conflict question has been resolved.

5.7 „Red flags“ for unethical or wrong behavior may indicate or warn of unethical practices. It includes, but are not limited to the following signs:

  • deviations from proper procedures;
  • overcharging by the Economic operator, e.g. billing of unfinished work or engagements beyond the contract;
  • poor record keeping;
  • missing files;
  • poor or no separation of duties;poor control (for example, only one person signs a contract without double signature method or “four eyes principle);
  • public sector employee’s extravagant life style;
  • public sector employee’s frequent absence from the office;
  • resistance to audit;
  • reluctance to delegate;
  • excessive secrecy;
  • dictatorial management style;
  • unnecessary meetings with Economic Operators;
  • not allowing other staff to deal with certain Economic Operators;
  • established suppliers’ reluctance of entering competitive tendering;
  • Only one economic operator is the provider in a certain domain for an extended period of years; or
  • Economic Operators cartels.

Section 6