Project governance : ethical decision making in project procurement in the Malaysian public sectors

Managing public sector projects in Malaysia is a unique challenge. This is because of the ethical issues involved during the project procurement process. These ethical issues need attention because they will have an impact on the quality, cost and time of the project itself. The ethical issues here include conflict of interest, bid shopping, collusive tendering, bid cutting, corruption and the payment game. In 2006, 17.3% of 417 Malaysian government contract projects were considered sick due to contractors' performances that failed to conduct the project according to the project plan. Some of the sick projects from these statistics are due to the ethical issues involved. These construction projects have low quality due to the selection of the contractors, done unethically due to personal relationships instead of professional qualifications. That is why it is important to govern the project procurement processes to ensure the accountability and transparency of the decision making process to ensure that these ethical issues can be avoided. Extensive research has been conducted on the ethical issues in the tendering process or the award phase of project management. There is a lack of studies looking at the role of clients, including the government client, in relation to unethical practice in project procurement in the public sector. It is important to understand that ethical issues not only involve the contractors and suppliers but also the clients. Even though there are codes of ethics in the public sectors, ethical issues still arise. Therefore, this research develops a project governance framework (PGEDM) for ethical decision making in the Malaysian public sectors. This framework combines the ethical decision making process together with the project governance principals in guiding the public sectors with ethical decision making in project procurement. A triangulation of questionnaire survey and Delphi study was employed in this research to collect required qualitative and quantitative data. A questionnaire survey was conducted among the public officials (the practitioners) who are currently working in the procurement area in the Malaysian public sectors, in identifying the ethical behaviours and factors influencing further ethical behaviour to occur. A Delphi study was also conducted with the assistance of a panel of experts consisting of practitioners that have expertise in the area of project governance and project procurement as well as academician, which further considered the relationship and the influence of the criteria and indicators of ethical decision making (EDM) and project governance (project criteria, organisational culture, contract award criteria, individual criteria, client's requirements, government procedures and professional ethics). Through the identification and integration of the factors and EDM criteria as well as the project governance criteria and EDM steps for ethical issues, a PGEDM framework was developed to promote, and drive consistent decision outcome in project procurement in the public sector. The framework contributes significantly to ethical decision making in the project procurement process. These findings not only give benefit to the people involved in project procurement but also to the public officials in guiding them to be more accountable in handling ethical issues in the future and to have a more transparent decision making process.