Third of firms view kickbacks as ‘part of the game’: report

Việt Á COVID-19 test kits, the latest scandal in medical supply procurement contracts, has resulted in former ministers and a number of high-ranking CDC officials being arrested and investigated. VNA/VNS Photo

HÀ NỘI — One out of three businesses considered kickbacks a norm in bidding, especially for contracts financed by the State budget according to the latest report by the Vietnam Chamber of Commerce and Industry (VCCI) and the United Nations Development Programme (UNDP).

The findings were released on Thursday during a conference in Hà Nội to discuss shortcomings and limitations experienced by businesses in bidding for public procurement contracts through a survey designed by VCCI and UNDP integrated into the annual Provincial Competitiveness Index (CPI) evaluation programme, which the chamber has been running for several years in a row. 

According to the report, businesses often had to allocate a significant chunk of money on under-the-table deals to rig the game in their favour, which severely undermined the bidding process’s efficiency and fairness. 

As many as 35 per cent of participating businesses said they accepted kickbacks as a norm or part of the game.

“Businesses often accepted they must spend a large amount of money in under-the-table deals during preparatory steps. Many who refused to had seen their bids delayed or returned, which typically cost them significantly more. They also likely faced much greater scrutiny than other contractors.” said an unnamed business representative in the report. 

It was especially bad during the pandemic with as many as  50 per cent of medical equipment and 38 per cent of medicine suppliers for COVID-19-related contracts admitting they spent “a large amount of money” on kickbacks to win contracts.

According to the report, one out of four admitted they took the first step to offer kickbacks, one out of three in the medical field. One out of ten said they were advised by inviters to offer kickbacks, one out of five in the medical field. This clearly indicated that the perverse culture of offering kickbacks to businesses has become rampant and out of control.

VCCI and UNDP voiced their concerns over how said culture has severely undermined the country’s ability to effectively combat the pandemic and how existing loopholes have allowed individuals and businesses to pocket a massive amount of money, causing great loss to the State budget. 

Đậu Anh Tuấn, VCCI deputy secretary-general, said identifying what problems businesses have to deal with is the first step in finding solutions to help improve transparency, efficiency and legality in public procurement and the business environment in Việt Nam. 

Some other issues faced by businesses were an extraordinarily short amount of time for them to effectively put together a bidding, unpublicised bidding invitations and seemingly-impossible requirements for both contracts and contractors.

This has been said to be particularly common in contracts put out by public hospitals. Businesses often chose not to speak out for fear of being discriminated against for future contracts, for lack of trust in public institutes’ ability to resolve or address complaints and out of concerns of additional time and costs to follow through. 

The report recommended a number of adjustments and additions to the current Law on Bidding with a focus on strengthening transparency and competitiveness in selecting contractors and advanced technologies. VCCI also called for greater oversight, inspection and auditing of public procurement contracts by governmental offices. 

Last week, the authorities arrested former health minister Nguyễn Thanh Long, former science and technology minister and chairman of the Hà Nội People’s Committee Chu Ngọc Anh, former science and technology deputy minister Phạm Công Tạc for corruption related to Việt Á COVID-19 test kits, a joint venture with the Military Medical Academy.

The kits, with support from the two above-mentioned ministries, were marketed and sold to almost all cities and provinces across the country. So far, a large number of high-ranking CDC officials have been investigated for their involvement with Việt Á. — VNS