Enacting a public procurement law to replace the current ineffective purchasing rules would help reduce corruption in Thailand's state projects, a UN assessment suggests.
The report says malpractice in project bidding and the lack of a public procurement law have allowed some policymakers and cabinet members to exercise power incorrectly.
"Thailand currently has no law on public procurement, only regulations based on best practices of the 1990s," said Peder Blomberg, a United Nations Development Programme (UNDP) consultant on risk assessment in public procurement.
"The fact that an economy as big as Thailand doesn't have a law is surprising," he said.
The UNDP conducted the assessment with help from the Public Procurement Management Office, the Anti-Corruption Organization of Thailand and the State Enterprise Policy Office.
A law would provide legal mechanisms such as enforcement, regulation of bidding and measures to prevent officials from committing fraudulent activities.
The assessment also calls for mandatory use of e-auctions for every public procurement and reference prices that can be re-examined.
"The e-auction is built on a lowest-price basis, so it is not suitable for some procurement projects such as complex construction projects where factors like quality and functionality have to be taken into consideration. The contracting authority should have the right to make that decision," Mr Blomberg said.
The lowest reference price is often seen as a price-control system that bars quality-oriented companies from winning bids even when their bid prices are set correctly.
As a solution, an indicative or maximum price could be used.
Moreover, training is crucial to develop know-how and integrity among those dealing with the procurement process.
"If Thailand wants to be a signatory to the Government Procurement Agreement (GPA), the procurement law will be necessary. It would allow Thai companies to bid on procurement projects abroad and vice versa," Mr Blomberg said.
The GPA is the World Trade Organization agreement that ensures open, fair and transparent conditions of competition in government procurement markets.
Thailand has not signed the GPA.
The UNDP findings were welcomed by the private sector and academics.
Bandid Nijathaworn, president and chief executive of the Thai Institute of Directors, said he agreed with the recommendations broadly, but added that they did not go far enough because Thailand has many problems in public procurement and adapting best practices to the current framework would be problematic.
Some academics argued that more regulations alone might not reduce corruption, and that good and transparent procurement should let the public access information.
"Corrupt people can find a loophole in the new law anyway," said Duenden Nikomborirak of the Thailand Development Research Institute.
"But, if we open all terms of condition of bids to the public, then the public could help inspect the procurement and prevent officials from favouring any bidders."