Surprising many, President Joko “Jokowi” Widodo annulled the Presidential Regulation (Perpres) No. 39/2015 this week on increasing the allowance advance payment for officials, shortly after it was announced. The presidential instruction (Inpres) had entitled legislators and othertate officials to Rp 211 million (US$16,300) in cash for a down payment on a car.
President Jokowi signed the final regulation on March 20, leading to anoutcry over the policy, as ordinary citizens still faced problems, such as high electricity bills, high fuel prices and other basic needs. The most surprising statement was when the President said, “I know nothing about this [down payment]”.
The procurement of official cars should be based on principles of government procurement — it needs to be efficient, sufficient and effective. Government policy should be transparent and accessible to the public, but the President seemed to deny what was stated in the procurement policy.
The electronic procurement (e-Procurement) policy implementation, which began in 2006, extending up through the Government Regulation No. 17/2012, became a new source of hope for the people and for the government-procurement process.
People could start to directly oversee the procurement process, including monitoring the auction, bidding and s
election of the supplier in order to prevent the misuse of the government budget.
Compliance and spending is a significant means of checking quality and the price.
Moreover, e-Procurement has been introduced as a way to achieve better, more cost-effective procurement systems to solve many administrative problems in the public sector.
Since the implementation of the policy, government agencies have been required to publish procurements on their official websites. Through the website, the public will be able to participate and monitor the procurement process. In principle, e-Procurement strategies are emerging as a powerful means of attaining the goal of cost reduction and productivity enhancement.
Approval of vehicle procurements should, therefore, be transparent, so that people can monitor each government procurement process from planning through implementation.
To prevent public mistrust, transparency would help avoid corruption. The Corruption Eradication Commission (KPK) in 2013 found that from 43 corruption cases studied, about 77 percent involved corruption in procurement.
Furthermore, Indonesia Corruption Watch (ICW) in 2013 noted that in the first semester of the government audit, there were 293 corruption cases and in the second semester there were 267 cases, mostly regarding procurement. This proved that the government’s ability to implement the e-Procurement policy was feeble. In 2011 and 2012, more than 20 regents and mayors were involved in corruption cases regarding procurement.
In 2007-2010, the central government allocated Rp 12 trillion per year for procurements. Meanwhile, according to the KPK, from 2009 to 2011 total state losses in procurement reached Rp 689.2 billion.
There are various benefits of e-Procurement for the government. One is compliance benefits. Within an organization, compliance and spending is a significant means of checking quality and the price. This is essential to maximizing the financial benefits of strategic sourcing. Price benefits will enhance abilities to negotiate.
Payment benefits are the ability to better manage the efficient payment of suppliers due to more streamlined procurement processes, providing more timely and accurate information.
Finally, transparency in government procurement is vital so as to involve the public’s participation.
The writer is the advocacy officer at the Indonesia Forum for Budget Transparency (FITRA), fellowship at The University of South Carolina in 2008 and currently a masters candidate in international development administration at Western Michigan University, US.