Dark Purchasing: The Hidden Threat in Procurement

In the realm of procurement, efficiency, compliance, and transparency are prized above all. But lurking in the shadows of well-documented processes is a silent disruptor: Dark Purchasing.

Imagine an iceberg: what you see above water is your managed procurement, while beneath lurks “Dark Purchasing” – unseen, unmanaged, and potentially dangerous. This stealthy issue plagues organizations, draining resources and undermining compliance. Let’s explore how to shine a light on this shadowy practice.

Though it may sound like something out of a spy novel, dark purchasing is a real and growing challenge – especially for organizations with large, decentralized operations. Let’s explore what it is, why it matters, and how procurement professionals in Bangladesh and beyond can shed light on it.

🔍 What is Dark Purchasing?

Dark purchasing refers to unauthorized, undocumented, or invisible procurement activity. This includes purchases that:

• Bypass official procurement systems,
• Are made without proper approvals,
• Are not tracked in the organization’s records,
• Or are executed by departments outside the procurement team’s purview.

Think of it like shadow IT – when teams install and use unapproved software. Dark purchasing is the same idea, but with goods and services.

🧾 Examples of Dark Purchasing

• A department head buying printer cartridges from a local shop without following procurement protocols.
• A field team arranging for logistics services in cash during a project without any invoice trail.
• Sub-units using petty cash to purchase items that should have gone through the e-GP system or ERP.

📊 Why It Happens

There are a few key drivers behind dark purchasing:

• Cumbersome procurement processes: If it takes too long to get approval, teams may resort to shortcuts.
• Lack of training: Staff may not understand the rules or the importance of compliance.
• Lack of Awareness: Unclear policies or inadequate training lead to unintentional breaches.
• Poor system integration: Without centralized procurement systems, purchases can slip through the cracks.
• Emergency needs: In urgent situations, users often bypass procurement for speed.
• Perceived Cost Savings: Misguided beliefs that alternative vendors offer better deals.

⚠️ Why It’s a Problem

Dark purchasing might seem harmless—after all, many of these purchases are small or urgent—but it opens the door to serious issues:

Lack of Control & Oversight

When purchases happen off the record, procurement officers lose visibility. This limits their ability to manage supplier relationships, negotiate better prices, or assess compliance.

Increased Risk of Fraud & Corruption

Unmonitored spending can be a breeding ground for fraud, favoritism, or inflated pricing—especially in environments with weak internal controls.

Budgetary Headaches

Without proper recording, actual expenses can exceed budgets or leave gaps that go unnoticed until audit season.

Non-Compliance with Procurement Laws

In Bangladesh’s public sector, such purchases may violate the Public Procurement Rules 2008 or the directives of the Central Procurement Technical Unit (CPTU). This can lead to penalties or blacklisting.

🛡️ How to Combat Dark Purchasing

To minimize dark purchasing, organizations should:

✅ Streamline Procurement Processes

Make it easier for users to go through the correct channels. Automate routine tasks and reduce red tape.

✅ Implement Spend Visibility Tools

Use procurement software or e-GP systems that track all purchases in real time, even at the micro level.

✅ Train Non-Procurement Staff

Education is key. Make sure all departments understand the procurement policy and their roles in it.

✅ Regular Audits & Spot Checks

Internal audits can uncover unapproved spending. Create a culture where transparency is the norm.

✅ Set Clear Policies on Petty Cash & Emergency Purchases

There should be guidelines even for exceptions—define when, how, and who can make off-system purchases, and ensure documentation follows.

📊 Real-World Impact

A 2022 survey by Gartner revealed that 35% of organizational spend occurs outside procurement’s visibility, costing firms up to 20% in missed savings. One tech firm reduced dark purchasing by 50% after introducing a mobile-friendly procurement app, slashing approval times from days to hours.

💡 Final Thoughts

Dark purchasing might not always be malicious – it’s often a result of broken systems or poor awareness. But left unchecked, it can become a significant threat to organizational integrity, especially in public procurement where accountability is vital.

Dark purchasing isn’t just a minor oversight – it’s a systemic risk requiring proactive measures. By blending technology, education, and cultural shifts, organizations can transform procurement into a strategic asset.

For Bangladesh, as we continue to modernize procurement through platforms like e-GP, the next frontier is ensuring compliance at every level. And that means pulling dark purchasing out of the shadows – one purchase at a time.