Risks of Public Procurement for Construction Works

Abstract

Conducting a public procurement process is prone to conflict if it deviates from procurement principles. Based on Presidential Regulation number 16 of 2018, the public procurement principles are efficient, effective, transparent, open, competitive, fair, and accountable. Problems in public procurement process may occur at every stage, starting from identifying procurement needs to delivering the results of the completed work. Many problems are likely to occur if risk identification is not implemented at public procurement process. If the risk is not identified early, it will be a potentially significant budget loss of government’s construction projects. This paper is an initial research to discover the risk variables in the public procurement process. The purpose of this study is to identify risks that may arise in the process of public procurement. Research variables in this study were obtained from related literature studies. The data in this study were acquired from questionnaires and interviews with several parties related with the public procurement. Mean and Standard Deviation (SD) were employed to assess the relevant variables from questionnaires. According to the experts’ opinion, there were 13 variables in the Planning and Preparation Stages and 9 variables in the Implementation Stage.