Procurement Modernization

Transcription

1 The practice of Procurement Modernization Enzo de Laurentiis Regional Procurement Manager Latin America and the Caribbean The World Bank

2 Procurement as a hindrance to service delivery? Systems over-legislated, rigid, formalistic, fragmented, obsolete Crises addressed with more regulation (transparency equated to process) or hasty reforms under public pressure Attention to compliance, not to results - Form over substance Kicking decisions up the system (delays) High transaction costs and slow and inadequate service delivery Lack of innovation Stagnation of officers and waste of talent

3 The 1990s marked a watershed in the push for transparency and service delivery 1990s European Union WTO GPA, FTAs MDBs Response e-gp Anticorruption Init. TI OECD Work UNCITRAL Law Public Procurement From Administrative task To Strategic government function

4 Today, government procurement is becoming more complex and strategic back office function central to strategic management sourcing considerations strategic business decisions largely goods complete service solutions suppliers simple process strategic partners complex contracts & relationships low value, low risk high value, high risk

5 as it moves from conformance to performance Management standards Process Performance Trend is for improved value and faster program delivery Regulatory administration

6 Performance stands atop the procurement modernization hierarchy Performance Capacity Institutions Legal and regulatory framework

7 The Performance approach is adaptive and responsive rather than prescriptive What are our objectives? Where do we stand? Wide stakeholder buy-in Transparency as key link with tax payers and civil society Short-, medium-, and longterm parallel efforts Performance (effective and efficient service delivery)

8 Over the past 10 years several tools have helped countries move from compliance to performance Strategic Sourcing / Quick Gains Address key performance problems OECD Baseline and Performance Indicators Some Tools for procurement modernization Value for Money Sector Analysis Electronic Procurement

9 OECD indicators enable performance measurement and focus policy dialogue on performance Tool OECD Indicators Key Points A tool for policy dialogue Guided self assessment vs. MDB-led Government team vs. consultant's Opportunity to discuss and question Truths Performance vs. theory The law says vs. This is how it s really done Integration with other stakeholders Private Sector Civil Society Government Buyers

10 Strategic sourcing ( Quick Gains ) is a particularly powerful way to drive efficiencies Tool Quick Gains Key Points High-level assessment of purchasing and contracting practices Aims to identify opportunities for achieving greater efficiencies and economies of scale Given the regulatory framework, considers potential to implement enablers such as e- procurement and/or framework contracts Identifies pilot cases for immediate savings that can be undertaken without proceeding with major reforms of the procurement system

11 Shaping Second Generation Reforms Key Economic and Social Development Objectives Roadmap for reform agenda Holistic picture of procurement as a strategic function rather than an activity Procurement planning and budget process Standardization Use of technology Improving government procurement capacity Competition and value for money Capacity building and professionalization Monitoring and evaluation, efficient control Low hanging fruits ; bottom-up All stakeholders brought to the table Stakeholder buy-in is key

12 Sector-specific analyses allow for targeted measures when these are necessary Tool Sector Analysis Key Points Sectors linked to government policy agenda: Health Medicines Food programs Education Books Infrastructure Roads Maintenance Focus on: Competition Savings Efficiency Transparency

13 e-procurement is a broad term with many manifestations, but it is essentially an enabler of transparency, efficiency, and control Tool Manifestation Area of Impact e-procurement Web-based posting wall Transparency Purchasing management system (with or without links to budgetary system) Transaction capable B2G and G2C interface e-reverse auctions e-bidding e-catalogs Framework contracts Efficiency, control Transparency, efficiency, control

14 Value for Money is both a tool and an approach to enable performance-based government procurement Whole life costs Quality Return Performance Value for Money Rationalization End user satisfaction Spend Full list of requirements Value for Money, in effect, brings together all of the latter tools: value has multiple dimensions

15 Value for Money can only result from the concerted effort to utilize an objective, tailored methodology to drive it Some of the elements of such a methodology can be: Detailed understanding of the underlying need Conscious effort to standardize, rationalize, and simplify Clear familiarity with the supply base and its cost structure Multi-prong strategy to engage stakeholders frequently, openly, and equitably Focus on Total Ownership Cost (TOC) rather than purchase price alone Long-term investment in capacity development for the procurement function Well-established and enforceable planning cycle at various levels Viable mechanism to protect competition (for example, by managing the risk of bid rigging) Tracking of end user satisfaction and performance relative to agreed-upon outcomes

16 Performance is key rationale for change Government procurement continues to evolve from compliance to performance, a trend that started in the 1990s By the mid-2000s, indicators, measurement, and ITdriven results-based management went mainstream Today, middle-income countries in LAC and elsewhere fully realize procurement s strategic relevance Low-income countries can and should benefit from this trend as well