A Multidimensional Study of the Law of Goods and Services Procurement Contracts in Indonesia

Hartanto Hartanto, Gusti Fadhil Fithrian Luthfan, Syakdiah Syakdiah  (Sinta 2)
https://jurnal.unissula.ac.id/index.php/akta/article/view/44787

A Multidimensional Study of the Law of Goods and Services Procurement Contracts in Indonesia

Hartanto¹⁾, Gusti Fadhil Fithrian Luthfan²⁾ & Syakdiah³⁾

¹⁾Faculty of Law, Widya Mataram University, Yogyakarta, Indonesia, Email: hartanto.yogya@gmail.com

²⁾Faculty of Law, Mulawarman University, Samarinda, Indonesia, Email: gustifadhil@fh.unmul.ac.id

³⁾Public Administration, Widya Mataram University, Yogyakarta, Indonesia, Email: syakdiah8@gmail.com

 

Abstract. Government procurement of goods/services always changes in the context of presidential regulations (Perpres), by making these regulations complete and in more detail; In this case, it is certainly a positive development to provide legal protection for contracting parties in the form of goods/services procurement agreements. Agreement or akad (Arabic) which is interpreted as a bond or conclusion; Meanwhile, according to the term, a contract is a mutual agreement or commitment, whether verbal, signed or written, between two/more parties which has binding legal consequences to carry it out. This research analyzes the principle of freedom of contract and balance, which is a principle that is generally used as a reference, even though it seems that there has been a violation of this principle, legally the contract is still acceptable; On the legal side, there is a backbone in the field of civil law, but in its development it often overlaps with the field of criminal law (corruption), and in this research it is linked to Islamic law. The perspective of Islamic law has stated that in the context of civil law a broken promise is qualified as a group that betrays Allah SWT; Meanwhile, according to criminal law, corruption is contrary to the theory of benefit.

Key words: Contracts, Procurement, Goods and Services, Government

 

1. Introduction

The background of this contract law occurred in Rome where promises in a contract were not only considered as promises to humans but also to God. The implication of this understanding is that if there is a denial of the agreement or contract made then the denial is also a denial of religion (Isradjuningtias, 2015:186-187). The group of people who become enemies of Allah in the Hereafter by R. A is told that a (Muslim) who always breaks promises is included in the group that betrays Allah SWT and Rasulullah SAW. The act of breaking promises harms others, but actually also harms oneself. One should not easily "make promises"; Allah SWT says in Al-Qur'an Surah An Nahl verse 91 (Setya, 2022). Contract law developed rapidly in the later 19th century with the classical theory of contract law. This theory was formed as a reaction to the substantive justice tradition that emerged in Europe in medieval times. Contract law scholars at the time viewed individual choice as a contract in itself, not just an element of a contract. As a result, individuals tended to view the ability to choose as a freedom and in the end it seemed that individual freedom was made the highest orientation of existence (Isradjuningtias, 2015:137).

In Indonesia, contract law (BW) refers to Dutch law since 1848, which is as old as the Criminal Code (WvS). This is quite reasonable considering the long period of Dutch occupation in Indonesia. However, with the development of Indonesia after independence until now, laws can be made with the needs and interests of adjusting the values of the Indonesian people themselves. Indonesia has also developed its own agreement law and contract law. A new contract or agreement will work well if the parties involved carry out its contents in accordance with the agreement. This indicates that the implementation of the agreement can be interpreted as doing something or not doing something not only for one's own interests but also the other party in the same agreement.

The procurement of goods and services typically relies on a contractual agreement, as it necessitates the involvement of two distinct parties: the supplier and the recipient of the goods or services.Both have different desires and interests. A service provider certainly wants to benefit from the business he is doing, so he sets the highest possible price for the goods and services he provides according to quality. On the other hand, service users tend to expect the cheapest possible price for the goods and services they get from the provider. Without an agreement to reach an agreement, the two will be very difficult to meet (Pane, 2017a). The procurement sector in our country is prone to corruption, collusion, and nepotism as a sociopolitical reality, which includes three main diseases namely: corruption, terrorism and drugs that come to the soul of the nation and state (Hafid et., al, 2020:74).

2. Research Methods

This research is normative research; Normative legal research is research aimed at providing a complete and systematic explanation by  examining various regulations, as well as analyzing the relationship between one rule of law and another through analysis of primary  and secondary legal materials (Shoimah et.al., 2020:3). This research uses three methods, namely: statutory, conceptual, and case approaches (Amiati et.al., 2024:233). Based on the background description, the problem formulation in this study is how the juridical review of the law of goods and services procurement contracts, in relation to the perspectives of civil, criminal and Islamic law. In this case, a conceptual approach is used to clearly understand the principles, through the views of legal scholars / legal doctrine (Tektona, 2019:14).

3. Results and Discussion

3.1. Contract Law

Contracts  from the Arabic point of view are called contracts, which  are interpreted as ties / conclusions, both visible ties (hissyy); contracts according to terms are agreements or mutual commitments, whether oral, signaling, or writing between two or more parties that have binding legal consequences to carry them out (Ardi, 2016:267). The understanding of contract law in positive law is an ongoing relationship between individuals with a set of norms that govern the basis of the relationship. The norms agreed between individuals can give the power to oblige, order, or even prohibit one of the parties or both of them to behave in a certain way. Implementation on the ground, however, often depends on certain conditions that make it possible to order, require, or prohibit. With the existence of a contract, behavior in accordance with the agreed contract can bring incentives or rewards, otherwise behavior that is not in accordance with the agreement can lead to sanctions to the perpetrator. The existence of a contract gives juridical rights to each party to comply with and implement restrictions in accordance with the previous agreement. This is because the existing contract forms a private entity between each party. In law, a law based on a contract is not always implemented in accordance with the purpose and intent of its existence. This is because there may be default by each party to the contract, force, fraud, mistake, or what in Indonesian law is called overmacht/noodweer, but in international law is known as force majure (Isradjuningtias, 2015:139).

          Agreements that are considered valid must fulfill the conditions described in Article 1320 of the Civil Code, including:

1.      There is an agreement between the parties

2.      There is capacity in each party to take action according to the law

3.      There is an object that is the core of an agreement

4.      There is a halal cause underlying the agreement

 

3.2 Procurement of Goods and Services

The meanings of goods and services are definitely different. However, referring to common sense, both can be united as a commodity, where goods are understood to be the physical existence of something with a form, type, and shape, while services are defined as the result side such as payment systems, transportation, and communication. In legal discussions, understanding the definition of goods and services can be done from various perspectives ranging from understanding both based on the most accurate dictionary, civil law perspective, State Finance Law perspective, State Treasury Law perspective, economic perspective, and Accounting system perspective. Procurement itself is defined by the function of bringing something into the system including supplies, raw materials, and other things such as buildings, equipment, and machinery. When referring to Presidential Decree Number 16 of 2018, procurement is defined as "the activities of ministries, institutions, work units, other institutions, whose process is from planning, until the completion of all good and services activities; procurement of goods and services that use costs from APBN/APBD" (Betham et.al., 2019:201).

 

Procurement of goods and services by a state agency must certainly have clear goals and objectives, so that there is no misappropriation of the funds provided; then in the process of procuring goods and services it is necessary to examine Article 1 of Presidential Regulation 16/2018 which states that: Procurement of goods and services is an activity to obtain goods and services by Ministries/Institutions/Regional Work Units/other Institutions whose process starts from planning needs until the completion of all activities to obtain goods/services; furthermore, the essence of this section is the same as Presidential Regulation No. 12/2021. The good and services procurement activities are financed by the APBN/APBD, both those carried out in self-management and by good and services providers (Seputra & Ardana, 2023:57). In essence, the procurement of goods and services is an effort to obtain the goods and services desired by the user with methods and processes that are in accordance with its capabilities. This is done through an agreement with the provider both in terms of procurement time, procurement costs, and other agreements in the agreement. The series of studies on the procurement of goods and services that resulted in philosophical thinking about ethics, namely the ethics of procuring goods and services by following the methods, processes, and principles of procurement of goods and services. This philosophy is useful as a guideline for both users of goods and services and providers so that the procurement of goods and services can be carried out as well as possible. The ethics that must be obeyed by each party in the procurement of goods and services are as follows (Setda, 2020):

1.      Carry out tasks in accordance with the agreement in an orderly manner and fulfill responsibility so that the goals and objectives of the smooth procurement of goods and services are achieved.

2.      Perform work independently and professionally based on honesty and the principle of maintaining the confidentiality of documents that must be kept confidential in the process of procuring goods and services to minimize irregularities.

3.      Avoid exerting adverse influence either directly or indirectly, so that unfair competition can be avoided.

4.      Be responsible and accept the decisions that have been agreed upon in the agreement by the parties.

5.      Prevent and avoid conflicts of interest of parties directly or indirectly involved, during the procurement process.

6.      Preventing and avoiding the risk of leaks that cause waste of state finances

7.      Preventing and avoiding abuse of authority or collusive practices with the aim of taking personal advantage of other parties or groups in the contract either directly or indirectly.

8.      Refuse, do not give offers / promises to accept / give rewards, to anyone who is clearly proven to have a connection with the procurement of goods and services

 

Presidential Regulation No. 16/2018 specifically regulates the legal juridical procurement of government goods and services. This is intended so that there is a legal umbrella that oversees the problems related to the procurement of goods and services. Previously, the procurement of goods and services was regulated in Presidential Regulation No. 54 of 2010, but with the developments that occurred, new arrangements were needed to adjust the application in the field and the times. This new Presidential Regulation regulates in detail the procurement of goods and services. Article 28 paragraph (1), for example, regulates the elements that must exist in the procurement of goods and services, including(Pane, 2017:151) : Proof of purchase/payment, receipt, work order (SPK), agreement letter (contract), order letter. In Presidential Regulation No. 12/2021 in Articles 29 and 29a, there is a separation of goods and products; Products are goods made or services produced by Business Actors; while what is meant by goods is tangible, or intangible, movable or immovable objects, which can be traded, used, used, or utilized by users of goods.

 

The purpose of procurement of goods and services is relatively fixed, limited to changes in Article 4g to encourage economic equality, in Perpres No. 16/2018 to be expanded in 4g Perpres No. 12/2021, namely realizing economic equality and expanding business opportunities. The Self Estimate Price (HPS) is also expanded to become an estimate of the price of goods and services determined by the PPK including indirect costs, profit and Value Added Tax (VAT).

 

Perpres No. 54/2010 The definition of good and services procurement starts from planning until the good and services are obtained; in Perpres 16/2018 expands the phases/stages of goods and services procurement, namely from identification of needs to the handover of work results. Perpres No. 54/2010 regulates PPK only as an executor, while in Perpres No. 16/2018 and Perpres No. 12/2021, the Commitment Making Officer (PPK) is given wider authority and responsibility, namely as an official authorized by the PA / KPA to make decisions and/or take actions that can result in the expenditure of the state budget/regional budget.

 

Procurement of goods and services by the government can be carried out in various ways including goods, labor services, consultant services, and other services and goods. However, the goods and services procurement agreement must basically always follow the Civil Code (backbone). This is because the Civil Code is the main reference in the agreement implementation process. Generally, the validity of the agreement is very important to make an agreement, including the agreement for the procurement of goods and services. The conditions governing the validity of the agreement are regulated in Article 1320 of the Civil Code as described in the theoretical study. Then referring to the same article, every agreement will definitely give rise to rights for each party and binding obligations. In legal terms this is referred to as an achievement. Goods and services procurement agreements have similar provisions, where the performance according to the agreement in the agreement can be fully fulfilled, not fully fulfilled, or only partially fulfilled. Cancellation of agreements often leads to disputes after the agreement is canceled and efforts to resolve these disputes emerge (Rawis et.al., 2021:66). 

 

The agreement when implemented may have the potential for parties to violate the provisions / procedures of the goods and services procurement agreement, then it can be subject to (Pane, 2017:149).

1.     Administrative sanctions

Administrative sanctions in the context of public procurement contracts refer to sanctions imposed by authorized administrative bodies or agencies. These administrative sanctions are usually imposed as a result of violations of applicable provisions or regulations in the procurement of goods and services, such as violations of procurement procedures, administrative requirements, or other provisions set by the procurement body or agency.

The imposition of administrative sanctions may vary depending on the laws and regulations applicable in a country or jurisdiction. Such sanctions may include:

a.      Administrative Fines: Sanctions in the form of payment of fines to the specified authorities. The amount of the fine is usually stipulated in the regulations or guidelines governing the procurement of goods and services.

b.      Disqualification: A sanction that denies or disqualifies the offending party from participating in future procurements of goods and services. This may mean that the party cannot take part in a tender or bidding process, or is prohibited from contracting with the same body or institution.

c.      Contract Termination: If the violations committed by a particular party are particularly serious, the procurement body or relevant agency may decide to terminate the ongoing contract and impose additional sanctions as appropriate.

d.      Reprimand or Warning: Sanctions take the form of a written reprimand or warning to the party that violated the procurement rules. This reprimand can serve as a first warning and can be followed by more severe sanctions if the violation continues

e.      sanction of collateral disbursement;

f.        Sanction of being blacklisted

2.     Civil lawsuit

Civil tort sanctions refer to sanctions imposed by the court in civil proceedings as a result of a breach of a procurement contract. When one party fails to fulfill a contractual obligation or commits another breach of the contract, the aggrieved party may file a lawsuit in court to recover its rights.

3.     Claim for compensation

A claim for damages in the context of a procurement contract refers to an aggrieved party's attempt to obtain financial compensation as a result of a breach of contract committed by another party. Indemnification aims to restore the injured party to the position it would have been in had the breach not occurred.

4.     Criminal sanctions.

Reporting sanctions in the criminal context in Indonesia, related to violations of procurement contracts, in forms such as fraud, corruption, or other criminal practices. These criminal sanctions certainly require precision in their application, given that the backbone of public procurement law is based on civil law (based on contracts/agreements), and given the doctrine of W. Blackstone quoted in his commentary that it is better to acquit 10 guilty people than to convict 1 innocent person (Zuhir et.al., 2019:160).

 

The criminal sanctions that can be associated are:

a.      Law No. 31/1999 on the Eradication of Corruption amended & supplemented by Law No. 20/2001: This law also addresses the prevention, prosecution and eradication of corruption in Indonesia. There are provisions regarding the reporting of corruption crimes and the handling process.

b.      Law No. 8/2010 on the Prevention and Eradication of Money Laundering (TPPU); which regulates the reporting of money laundering crimes and the obligation of parties to report suspicious transactions.

 

Fiqh critically examines the issue of corruption with various interpretations, for example: "Ghulul (embezzlement), Risywah (bribery), Ghasab (forcibly seizing other people's rights), Sariqah (theft), Hirobah (robbery)." However, the study of corruption and its countermeasures in the perspective of Islamic law is still rare (Roja & Zafi, 2020:249). These possibilities are the dynamics in the procurement of goods and services organized by the government in accordance with the provisions of the applicable laws and regulations, so that they will directly have an impact on the process of procurement of goods and services. The author expands the legal field contained in the procurement process, which is sui generis, namely:

1.      State Administrative Law or State Administrative Law. This law regulates the law between users (government/ASN/non-ASN employees) and providers (private parties) during the preparation and issuance of the agreement letter.

2.      Civil Law. This law regulates the law on providers and users from the time the contract is signed until the contract ends.

3.      Criminal Law. This law regulates the law on users and suppliers from the beginning of the needs identification stage, preparation until the procurement agreement is completed.

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