On Monday, September 30, 2024, Indonesia Corruption Watch (ICW) launched a policy paper titled "Vendor Performance Assessment of Public Procurement: Accountability and Public Oversight Efforts (Comparison with the United States and Canada)." The event, held at Aone Hotel Jakarta, was attended by key stakeholders including the National Public Procurement Agency (Lembaga Kebijakan Pengadaan Barang/Jasa Pemerintah or LKPP), USAID, and the Regional Executive Board of the Indonesian National Construction Association (BPD Gapensi). A total of 15 participants attended the launch, consisting of 3 women and 12 men.

Supported by USAID INTEGRITAS, the agenda aimed to present a comparative study on performance appraisal methods in Indonesia, the United States, and Canada. ICW analyzed the implementation of contractor performance assessments using both statutory and empirical approaches. Erma Nuzulia Syifa, an ICW researcher and presenter, highlighted that in 2022, only 13.8% of vendors were assessed by government agencies. This increased slightly to 16.4% in 2023, with about 18,000 packages assessed out of a total of 555,000 packages. These low percentages reveal a significant gap in the accountability of vendor performance assessments.

The research found that local governments have the lowest rates of vendor performance assessment, largely due to the lack of sanctions for Procurement Officers (Pejabat Pembuat Komitmen - PPK) who fail to carry out assessments. Other contributing factors include weak enforcement of regulations and inadequate capacity among PPK officers, both in quantitative and qualitative terms. Additionally, the absence of integration in the procurement information system further hampers effective assessments. By comparing Indonesia’s practices with those of the United States and Canada, the study seeks to identify areas for improvement in Indonesia’s procurement system.

Emin Adhy Muhaemin, Director of SPSE Development at LKPP, was invited to share insights. He emphasized the challenge of assessing the performance of thousands of procurement packages, ranging from small to large scale. Currently, performance assessments are primarily conducted on projects related to the National Capital City (Ibu Kota Nusantara or IKN). Muhaemin expressed hope that LKPP Regulation No. 4 of 2021 on vendor performance assessment could be revised to address existing obstacles.

During the question-and-answer session, Erma further explained the more structured performance appraisal systems used in the United States and Canada. In these countries, companies that commit fraud face significant hurdles in re-engaging in procurement projects, including mandatory coaching programs. She also pointed out that strong public awareness is a crucial factor in the success of these systems.

The policy paper provides recommendations for revising LKPP Regulation No. 4 of 2021, focusing on three key areas: (1) improving the implementation of performance assessments, (2) refining assessment methods, and (3) establishing coaching programs for problematic vendors. ICW plans to extend its advocacy efforts to relevant stakeholders, including the Ministry of Finance, the Ministry of Administrative and Bureaucratic Reform (KemenPan RB), the Ministry of Home Affairs, and the Corruption Eradication Commission (KPK).

Author
Amelia Augustine Aan Putri (Parahyangan Catholic University Intern)
Windi Julia Wulandari (Parahyangan Catholic University Intern)

Editor
Wana Alamsyah (Head of Knowledge Management Division)