FALCON releases 3rd policy brief: “Combatting Corruption and Fraud in Public Procurement”

The FALCON project unveiled its third Policy Brief, focusing on strategies to combat corruption and fraud in public procurement. The policy brief provides evidence-based recommendations for EU policymakers and stakeholders involved in legislative and policy initiatives aimed at improving transparency and accountability in public procurement processes.

Public procurement, which involves the acquisition of goods, services, and works by government entities, is one of the most corruption-prone areas of governance. The high financial stakes, complex procedures, and interactions between public officials and private actors create vulnerabilities that can lead to inflated costs, substandard infrastructure, and inefficient resource allocation.

While existing EU legislative frameworks (Directives 23/2014, 24/2014, and 25/2014) provide robust guidelines, their limited scope leaves significant gaps in enforcement and harmonisation across member states. These gaps create opportunities for corruption to thrive.

To address these challenges, the Policy Brief outlines five key recommendations:

1. Strengthening Oversight of Sub-Threshold Public Procurement: Many public procurement contracts fall below the thresholds set by EU Directives, leaving them outside the scope of procedural requirements. The brief advocates for targeted oversight of these smaller tenders using risk-based monitoring tools, such as FALCON’s Corruption Intelligence Pictures (CIPs), combined with open-source intelligence (OSINT) and company data.
   
   
2. Promoting E-Procurement Measures: Electronic procurement systems can enhance transparency and efficiency. The brief recommends standardising public procurement data formats, improving interoperability, and providing training for stakeholders to adapt to digital systems.
   
   
3. Integrating AI and Machine Learning Tools: Artificial intelligence and machine learning can revolutionise corruption risk assessment by analysing large datasets to detect patterns and red flags. FALCON is developing a cutting-edge platform with over 36 advanced indicators to support law enforcement agencies and anti-corruption bodies in real-time or near-real-time risk assessment.
   
   
4. Limiting the Use of Direct Awards: Direct awards, where contracts are granted without competitive procedures, pose significant corruption risks. The brief calls for stricter provisions to limit direct awards to emergency or security-sensitive situations, coupled with rigorous oversight and documentation requirements.
   
   
5. Increasing Accountability Mechanisms: The institutionalisation of corruption risk indicators and red flag systems is essential for effective monitoring. The brief emphasises the need for robust data infrastructure and organisational capacity to investigate potential corruption cases, alongside the identification of best practices for risk detection frameworks.

The implementation of these recommendations aims to reduce corruption risks, enhance transparency, and foster collaboration across institutions. By standardising rules and procedures, policymakers can better address the challenges posed by corruption in public procurement.