Olmert vs Tenders

Our politicians have come up with many and myriad a way to pamper the boys, or just associates: sweetheart jobs and deals, wink-wink arrangements at income tax, fast-tracked land rezoning, you name it. And, naturally, tailoring tenders.

It is good, for the businessman, to do business with the state. The government is the biggest procurer in the land. It buys billions worth of goods and services each year. And now, as you read, the prime minister is trying to change the way it does business.

Prime Minister Ehud Olmert and his director-general Raanan Dinur want to change the regulations requiring the government to publish a tender every time it wants to buy something.  They want the power to pass from the accountant-general at the Finance Ministry, to the directors-general at the ministries themselves.

The prime minister would emasculate the tenders law. He could be opening the door to corrupt deals at the ministries, where lucrative tenders could be sewn up for cronies of the people in power.

The tenders law was enacted in 1992, precisely because of rampant corruption in government procurement. Since then, all major contracts have had to pass through the Finance Ministry's accountant-general.

The law achieved several goals: public money was saved, corruption was frustrated and equal opportunity was opened before all businesses, not only ones owned by friends of friends.

The tenders law made it much harder for ministers to reward their faithful sidekicks. They can't just sign an overpriced contract on a wink and nod. Therefore, the ministers did not like the law. It constrained them, and the government then set out to weaken its power.

First the government set up a panel to reexamine the law, but the panel let it down. The panel recommended maintaining the system of tenders and supervision by the treasury's accountant-general.

Try, try again

So the Olmert government set up a new panel, headed by Yarom Ariav, the new director-general at the Finance Ministry. Dinur is also on the committee. The committee readdressed the issue and reached a startling conclusion that severely shackles the law.

In the name of increasing efficiency and speed, they suggest that it isn't necessary to obtain the accountant-general's approval of each and every contract. He is a bottleneck, the panel decided. Tenders up to NIS 4 million should be exempt, and in fact, why hold a tender at all? In such cases the director-general of the relevant ministry should solicit bids from a few businessmen and be done with it.

Isn't the burden on the director-general a bit, well, onerous? The director-general  is appointed by the minister himself and might feel beholden to the minister, not to the public.

But the problem lies much deeper: abolishing the demand for a tender simply invites corruption.

Sources at the office of accountant-general Yaron Zelekha say the claim about a bureaucratic bottleneck is nonsense. There have been reforms and most tenders are immediately accessible by Internet, they point out. Not so, say the ministries; the delays are real.

Fine. So open the bottleneck somehow. Don't throw the baby out with the bathwater.

Olmert for his part hasn't signed off on the panel's recommendations - they don't go far enough for him. They do not eliminate the accountant-general once and for all: they leave him the option of appealing. And Olmert hates Zelekha (who testified against him regarding corruption) more than he hates the Hamas.