THE EXTENT OF SINGLE SOURCING IN DEFENCE PROCUREMENT AND ITS RELEVANCE AS A CORRUPTION RISK: A FIRST LOOK

Abstract

Single‐source, or non‐competitive, defence procurement is a widespread phenomenon that is prevalent both in developing countries and in advanced arms exporting countries. The usual competitive bidding process – which assists in both value‐for‐money evaluation and in lowering corruption risk – is used much less often than expected in defence procurement. Whilst there can be good reasons for single sourcing, the opportunities and inducements for corruption are significantly escalated. Further, some countries that claim to employ single‐source only in rare instances are found to have high percentages of non‐competitive defence procurement. This is of particular concern as defence is perceived to be one of the more corruption‐prone international business sectors, as identified in the 2002 Bribe Payers Index (Transparency International, 2002), with procurement presenting a significant source of corruption risk. The work presented here gives data on the percentage of defence single source procurement in a number of countries. Some countries were transparent and open about this data, even where it showed them in an unfavourable light. Most were not, citing sensitivity reasons or even that the data did not exist as reasons for refusal.

Acknowledgement

An earlier version of this paper was presented at the conference ‘Public Procurement’, University of Nottingham, 19–20 June, 2006. The authors express their thanks to Professor Sue Arrowsmith.

Notes

¹ Details available at www.defenceagainstcorruption.org

² Steve Shaw is the US Air Force Debarment and Suspension Official

³ The dataset with explanatory notes is publicly available at http://www.transparency.org/policy_research/surveys_indices/bpi

⁴ For more details see http://www.eda.europa.eu/genericitem.aspx?id=153

⁵ http://www.namsa.nato.int/suppliers/gen-prov_e.htm

⁶ Professor Christopher Yukins is Associate Professor and Co‐Director of government Procurement Law Program, George Washington University. Professor Yukins’s papers are publicly available at http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=333989

⁷ Federal Procurement Data System. https://www.fpds.gov/common/html/login.html

⁸ ‘Iraq Rebuilding Plan Reviewed’ Washington Post, 31 March 2004.

⁹ ‘Report Required by Section 812 of the National Defense Authorization Act for Fiscal year 2004’ (Public Law 108–136), Foreign Sources of Supply: Assessment of the United States.