BLIND SPOTS IN PROCUREMENT AND CONTRCAT MANAGEMENT. Majed M Elbayya The World Bank-Governance Global Practice New Delhi-February 2018

Transcription

1 BLIND SPOTS IN PROCUREMENT AND CONTRCAT MANAGEMENT Majed M Elbayya The World Bank-Governance Global Practice New Delhi-February 2018 Global Procurement Summit 2018

2 Definition of blind spots What is a blind spot? If you say that someone has a blind spot about something, you mean that they seem to be unable to understand it or to see how important it is It's human nature to have blind spots and to be tripped up by them.

3 Some signs of blind spots in procurement and contract management? Arrogance No one can do it better than me I already know it. Not listening Defend its position time after time Avoidance Postpone and not acting. Ignorance Do it my way or

4 Areas of blind spots in procurement & contract management Value of time Extension of bid submission deadline time after time Very long time taken for bid evaluation Time overrun in contract execution Social outcomes Linkage between social aspects and procurement Social policies on labor, human rights, indigenous people, gender, SMEs Disruptive technology E-procurement Smart contracts Professionalization Certifications Skills buildings

5 Value of time Sources of delays Extension of bid submission deadline time after time due to improper design/technical specifications/qualifications requirement/transparency and integrity issues etc Very long time taken for bid evaluation due to lack of capacity and skills/integrity/accountability/ political interference etc Delays of contract completion due to poor deign, weak supervision and contract monitoring, low bid prices, integrity issues, land issues, utility relocations, risks allocation, etc

6 Value of time Economic loss due to delays Direct and indirect cost of project delays One day delay in completion of a contract of US$1 b would account for an economic loss of $100,000. This means 6 month delay would make the people loose about US$18 m worth of benefits. What you can do with this money to the poor? Contractor already included this cost in his bid as part of the risk.

7 Social aspects What is the link between social aspects and procurement Government being the larger purchaser could use government contracts to implement polices including social policies

8 Social aspects How to use procurement to address social aspects Use of local labor Minorities (color, women, indigenous people, equality) Minimum wages, maximum hours of work, child labor Health aspects Preventing sexual abuse Strengthening communities Supporting certain groups e.g blinds, disabled, unemployed SMEs Civil rights

9 Disruptive technology What is disruptive technology A technology that significantly alters the way that business operate Investopedia Examples of disruptive technology Internet and Smartphones Cloud computing Social networks Drones Driverless cars Cashierless supermarkets 3D printing etc

10 Disruptive technology in procurement & contract management Artificial Intelligence Specification preparation Bid evaluation Contract award Contract signature Smart contracts Blockchain Delivery of goods and payment Data analytics Performance indicators Learning

11 Artificial Intelligence Specification and bidding document preparations Tell your computer to prepare technical specifications for purchasing a turbine, a computer, Tell your computer to prepare the bidding document Need of different specifications 3D printing in construction Delivery modes shipping to space and from space Bid evaluation Computer does the complete bid opening, evaluation of bids, contract award, submit acceptance certificate, prepare the contract for digital signature in very short time. Human factor? We need to manage smart machines. Machine learns. Where is the human factor? Do we need all of this number of staff? Where these extra people need to work on? What are the new required skills?

12 Smart contracts Use blockchain Secure, can not be altered, sharable, no central authority need to perform the information sharing What is smart contracts Information are stored in blocks. Add to these blocks codes then you will have a smart contract. In simple terms: If X happens then do Y. If price of computer hits $900, then buy 2000 computer. If computers delivered, then issue invoice. If invoice received and computers received pay 80% of invoice and so on.

13 Smart contracts Are we ready for smart contracts? Simple coding -- We are already there Complex coding -- Still not yet there. But you could be there without knowing.

14 Risk of using smart contracts and disruptive technology Coding is extremely important and require special understanding, team work, multi specialists input and different skills. Quiz? 6*2(2+1) =? 6/2(2+1) =? Social aspects may diminish example amazon cashierless supermarket, social media

15 Data analytics E-procurement? Huge data. How do you store it? PDF?. Are you loosing the benefit of data? Performance monitoring Realtime Integrity monitoring red flags Integrate with contract management information systems Economic impact

16 Professionalization Professional cadre Certifications Skills building Proper compensation Are we expecting a procurement minister position in big countries in the future?

17 Do we need to pack and leave? Procurement, engineers, contract managers, auditors and lawyers specialists will still be needed but with different skills. Focus on building your skill, listen, be ready to be reformed and to influence change, be part of the project, team and beneficiaries. You will continue to be relevant.

18 Thanks