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Matthieu CAHEN Policy Analyst Public Sector Integrity Division
Beirut – 3 June 2015
IMPLEMENTATION OF SELECTED PRINCIPLES OF
THE OECD RECOMMENDATION ON PUBLIC
PROCUREMENT
Increase transparency and
Improve performance through
evaluation of procurement systems
SIGMA Regional Conference
on Public Procurement
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• It stands as a crucial pillar of strategic governance for any government body;
• It is also a high-risk area due to the close interaction between private and public spheres
• Governments face the challenge of ensuring that different priorities are clear, work together and overlaps or conflicts are avoided.
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Public Procurement matters
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Government procurement as share of GDP and of total govt. expenditures
Source: OECD National Accounts Statistics. (2013)
Public Procurement really matters
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Estonia
Hungary
Netherlands
Korea
Japan
Ireland
Luxembourg
Czech Republic
Germany
New Zealand
Canada
Israel
Slovak Republic
Finland
United Kingdom
Sweden
Turkey
Belgium
Austria
Denmark
Switzerland
Spain
Poland
OECD(UWA)
Norway
France
United States
Mexico
Italy
Portugal
Greece
Slovenia
28.1
0 10 20 30 40 50
13.0
0.05.010.015.020.025.0
as % share of total government expenditureas % of GDP
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And it matters for everyone
• From the Business side, public sector efficiency is the second business priority area for reform after product market regulation.
And public procurement the top priority in this sector:
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BIAC Economic Survey, 2014
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Supported governments in reforming public procurement systems for sustainable and inclusive growth and trust in government through:
• Building evidence from useful, reliable and comparable data across OECD countries on the performance of public procurement – Key Performance Indicators
• Undertaking hands-on peer reviews that provide assessment of public procurement systems, either national or sectorial, and tailored proposals to address implementation gaps in specific context – in Italy, Greece, Northern Ireland but also US, Korea, Mexico
• Organising policy dialogue to share insights & shape directions for future reforms, build strategic partnership with private sector - G20
• Identifying good practices and providing international standards on public procurement – Compendiums on Green Procurement, Transparency, Accountability and Anticorruption
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OECD contribution to reforming
public procurement
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Through the MENA/OECD Network on Public Procurement:
• Specific workshops in the region:
– on professionalisation of the procurement workforce,
– e-procurement,
– global procurement strategies (from needs analysis to aggregation mechanisms).
• Manuals and Guides
Application in the MENA Region
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Main findings from the OECD work in Public
Procurement
The OECD’s experience in working with public procurement shows that a sound procurement system includes:
a) procurement rules and procedures that are simple, clear and ensure access to procurement opportunities;
b) effective institutions to conduct procurement procedures and conclude, manage and monitor public contracts;
c) appropriate electronic tools;
d) suitable, in numbers and skills, human resources to plan and carry out procurement processes; and
e) competent contract management.
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•The 2008 OECD Recommendation on Enhancing Integrity in Public Procurement focused on integrity, transparency, accountability, good management, risk prevention and control.
• Interest in governance of public procurement to achieve efficiency and advance public policy objectives has significantly increased.
•The new OECD Recommendation on Public Procurement supports a shift from an administrative and compliance-based approach to a strategic and holistic approach to realise government policies
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A standard for Public Procurement in
the XXI century
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• Supports dedication of public resources to address the increasing complexity of strategic public procurement
• Yields returns as the investment in a sound public procurement brings major outcomes: a 1% saving represents 43 billion EUR per year in OECD countries.
• Supports achievement of policy goals such as job creation, innovation, environmental protection or the development of SME, a crucial pillar of strategic governance and services delivery for any government.
• Supports risk mitigation such as those arisen from public works, complex digital technology or major events.
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Investing in Better Policies
The New Recommendation:
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Participation
Efficiency
Capacity
Integrity
Access
Balance
E-Procurement
Evaluation
Risk Management
Transparency
Integration
Accountability
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The New Recommendation on Public
Procurement: 12 integrated principles
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TRANSPARENCY THROUGHOUT THE ENTIRE PUBLIC PROCUREMENT CYCLE
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How transparency principles could be
implemented?
• Most recent reviews from the OECD suggest that transparency could efficiently be implemented notably by e-Procurement systems if appropriately designed and used
• But why implementing transparency into public procurement?
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Transparency fosters competition
• Fair and equitable treatment of suppliers ranging from SMEs to foreign suppliers
• Need to be balanced with disclosure of information which could be detrimental to competition
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Transparency brings inclusiveness
• Easily and readily accessible online information on public procurement provides suppliers with a coherent view of procurement opportunities
• Rebuild citizens’ trust in governments by offering a platform to review public expenditures
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Transparency enhances visibility
• On average, 2/3 of public procurement is done at sub-central level, hence the potential offered by transparency in understanding procurement patterns at sub-central level
• Greater visibility of public funds provides strategic insights which help shape future public procurement decisions
• Greater transparency provides opportunities for rationalisation and mutualisation of needs, thus economies of scale.
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IMPROVEMENTS THROUGH PERFORMANCE ASSESSMENT OF PUBLIC PROCUREMENT
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Performance evaluation
• Assess periodically and consistently the results of the procurement process to guide future decisions
• Develop indicators to measure performance, effectiveness and savings of the public procurement system
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In Feb. 2013, the Leading Practitioners on Public Procurement asked the OECD to help developing a set of indicators to measure the performance of public procurement systems and their evolution over time.
Four areas for the development of indicators were identified:
1. Efficiency of the public procurement cycle
2. Openness and transparency of the public procurement cycle
3. Professionalism of the public procurement workforce
4. Contract performance management
Towards key performance indicators
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Why implementing performance-based
assessments?
• Procurement is an evidence-based system and so shall be its performance evaluation
• Measuring performance provides insights both at macro and micro-level
• Measuring public procurement performance not only provides assessment of public spending efficiency but also information to governments on achievements of their objectives.
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Yet, measuring is a challenge
• Purchasing entities report difficulties in centralising information on public procurement
• Need for a consensus on what to measure and how to measure it: – Performance indicators vs. Activity indicators
– Common terminology
– Shared vision on the objectives
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An international reference for public procurement standards that shall shape public procurement systems:
• Deepening the evidence base - Key Performance Indicators, comparative data, e.g. for G@G
• Best practice compendiums – green procurement, transparency, integrity and innovations
• Basis for future policy advice – country and sectorial reviews (like Mexico, Greece, Colombia, Korea)
• Implementation toolkit
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Next steps
Implementing the Recommendation
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www.oecd.org/gov/ethics/public-procurement.htm
For more information on OECD work on public
procurement and integrity
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Thank you!
Web: www.oecd.org/gov/ethics/integrityinpublicprocurement.htm
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