© OECD

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

SIGMA Regional Conference on

Public Procurement

Strengthening Public Procurement SIGMA’s Principles of Public Administration and their

application to public procurement

Beirut, 2 June 2015

Beirut, 2 June 2015

Karen Hill Head of SIGMA

Daniel Ivarsson Senior Adviser, SIGMA

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Aim and focus of Principles

• SIGMA has worked with EU accession countries for over 20 years, including many countries which are now EU member states with valuable reform experience.

• The Principles of Public Administration recently developed by SIGMA comprise key requirements and criteria in line with European values.

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Aim and focus of Principles

• Derived from EU acquis, international standards and requirements, and good practice in EU/OECD countries, the Principles enable benchmarking of performance and provide a guide for countries in their reform processes.

• Designed particularly for countries that seek EU accession and receive EU assistance through the Instrument for Pre-accession Assistance (IPA).

2

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Overall framework

• Strategic framework for public administration reform

• Policy development and co-ordination

• Public service and human resource management

• Accountability

• Service delivery

• Public financial management

(including public procurement)

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Overall framework

• 19 key requirements outline general characteristics of good public administration

• 48 Principles grouped under key requirements focus on: Implementation Evidence based monitoring Performance of the system in practice

• Sub-principles then define more precisely which components need to be in place

• Analytical framework describes how application of the Principles can be followed and measured

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Implementation of reforms

• The Principles of Public Administration are for you to use - the level of a country’s commitment determines the success of its public administration reforms

• Final destination is good public administration that achieves Government’s objectives and delivers for citizens but priorities for your country will vary over time, depending on previous reform record and specific challenges

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Key issues for public administration reform

Public financial management — this includes a more comprehensive approach to improving the overall budgetary process and the management of public finances, including public procurement.

6

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Why public procurement matters I

Public procurement is what allows public entities to function well and to deliver good services:

Get the right thing for meeting the right needs, at the right price and conditions

Get value for money by creating competition, encouraging wide participation

Take advantage of using best available sources for goods, works and services

Orderly public procurement improves governance and helps combat fraud and corruption

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Why public procurement matters II

Important for business development:

Public procurement often 1/6 of GDP

Big potential market for local firms

Access to foreign public procurement markets improves export opportunities

Warehousing, distribution, maintenance etc. gives local business opportunities also with foreign inputs

Opportunity to acquire know-how, build partnerships, enter international value chains

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Principles for Public Procurement

• Provide a guide for countries in their reform processes: What should a well-functioning public procurement system look like?

• Framework:

3 key requirements for the general characteristics of a well-functioning public procurement system

5 Principles (Principles 10 – 14) grouped under the key requirements

Sub-principles under the principles 9

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Compatibility with other frameworks

• EU Directives: • Public Sector Directive 2014/24/EU

• Utilities Sector Directive 2014/25/EU

• Concessions Directive 2014/23/EU

• Remedies Directives 89/665, 92/13, 2007/66

• Defence and Security Directive 2009/81

• EU Commission communications, CJEU case law

• Government Procurement Agreement / WTO

• UNCITRAL model law

• Multilateral development bank rules

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

What good procurement requires?

Key requirements in SIGMA’s Principles: 1. Public procurement is regulated by duly enforced policies and

procedures that reflect the principles of the Treaty on the functioning of the European Union and the European Union acquis, and are supported by suitably competent and adequately resourced institutions.

2. In case of alleged breaches of procurement rules, aggrieved parties have access to justice through an independent, transparent, effective and efficient remedies system.

3. Contracting authorities are adequately staffed and resourced and carry out their work in accordance with applicable regulations and recognised good practice, interacting with an open and competitive supply market.

11

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Principles of public procurement (1)

Principle 10: Public procurement regulations (including public-private partnerships and concessions) are aligned with the acquis, include additional areas not covered by the acquis, are harmonised with corresponding regulations in other fields, and are duly enforced.

Principle 11: There is central institutional and administrative capacity to develop, implement and monitor procurement policy effectively and efficiently.

Principle 12: The remedies system is aligned with the acquis standards of independence, probity and transparency and provides for rapid and competent handling of complaints and sanctions.

12

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Principles of public procurement (2)

Principle 13: Public procurement operations comply with basic principles of equal treatment, non-discrimination, proportionality and transparency, while ensuring the most efficient use of public funds and making best use of modern procurement techniques and methods.

Principle 14: Contracting authorities and entities have the appropriate capacities and practical guidelines and tools to ensure professional management of the full procurement cycle.

13

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Example: Principle 11

There is central institutional and administrative capacity to develop, implement and monitor procurement policy effectively and efficiently.

• 10 sub-principles

• Good public procurement practice requires a sound policy making framework, and institutional structures and arrangements that will ensure the regulatory system functions effectively.

14

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Principle 11 – sub-principles

1. There is a clear political and legal mandate for an entity with a policy making function to initiate, outline, implement and monitor public procurement reform in all sectors (unless allocated differently, e.g. in the case of public-private partnerships and concessions) and all aspects (e.g. capacity building, modernisation of procedures, green procurement and integrity) and within the whole public administration.

2. There are clear and comprehensive policies for the orderly, longer-term development of the public procurement system, which may take the form of a national strategy and action plan, whether specific to public procurement or covering public financial management at large.

15

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Principle 11 – sub-principles

3. Dedicated capacity is available and well-used for implementing and revising the strategy for developing public procurement (including public-private partnerships and concessions).

4. A designated entity with the mandate and the capacity to communicate with the European Union institutions and co-ordinate European Union-related public procurement matters (including public-private partnerships and concessions) is in place and working.

16

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Principle 11 – sub-principles

5. The legislation defines the distribution among the central procurement and public-private partnership/concession institutions of their respective functions and responsibilities, which typically would include:

• long-term policy framework; • primary legislation; • secondary policies and regulation; • international co-ordination; • oversight and monitoring; • advisory and operational support; • publication and information; • professionalisation and capacity building; • operational development and co-ordination. 17

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Principle 11 – sub-principles

6. Potential conflicts of roles and interests are avoided, addressed in applicable legislation and built into the organisational design of the institutional structure.

7. The public procurement institutions have the necessary authority and resources to exercise their functions and duties effectively and efficiently, and do so.

8. A well-functioning central electronic portal is in place for the publication of tender and contract notices, as well as other important information and guidance.

18

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Principle 11 – sub-principles

9. Advice and guidance to contracting authorities and entities and economic operators on applying the procurement legislation is available on demand and is practical and useful.

10. An oversight and monitoring system for public procurement is in place, providing ready access to data on public procurement operations and, thereby, on implementing all applicable principles, policies and regulations.

19

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Are the Principles followed?

• Good procurement requires reforms

• Effective procurement reforms call for evidence based decision making

• Understanding what’s happening helps define objectives and set priorities

• The Principles provide a standard for evaluating the situation, setting objectives, measuring progress

20

A j

oin

t i

nit

iati

ve o

f th

e O

EC

D a

nd

th

e E

uro

pe

an

Un

ion

,

pri

nc

ipall

y f

ina

nced

by t

he

EU

Thank you for your attention!

21