A model for assessing procurement irregularities in decision making process at the tendering stage of construction projects

Abstract

The public procurement in Malaysia has always been regulated by a comprehensive procedure of tender preparation, evaluation and award. Though these measures are meant to insulate unwarranted behaviors or biased decisions of the procurement officers, the public procurement is still plagued with recurring irregularities. Therefore, this study aimed to review and investigate the factors causing irregularities in the current contractor selection and award process. In addition, a conceptual model for improving the procurement decision making process has been developed based on the notion of bounded rationality. In the context of a procurement committee, the individuals were not only influenced by their cognitive limitation, they are also susceptible to irrational group behavior, namely groupthink. The compound of both influences has substantially undermined the deliberation process and hence resulted irregularities in procurement decisions. This research employed quantitative approach and was participated by 289 procurement officers from Malaysian local authorities. Partial Least Square - Structural Equation Modelling (PLS-SEM) statistical analysis technique was employed to test the model. The model confirmed that three antecedents namely accountability, prior knowledge and work experience directly impact the procedural rationality. Whereas, two antecedents namely group insulation and group cohesiveness were directly related to groupthink. Besides, procedural rationality was confirmed to mitigate groupthink effect, whereas groupthink induced defective decision making. In addition, both procedural rationality and defective decision making were found to be associated with procurement decision irregularities. The model was validated for its capability to detect the likelihood of irregularities decisions in the public procurement context.