Moving forward with Key Performance indicators for wellfunctioning public procurement systems Paulo Magina Head of the Public Procurement Unit, OECD e-procurement Forum: Enhancing Public Spending Vienna Dec. 2015
WHO WE ARE
The OECD is the global organisation that drives better policies for better lives: The OECD provides a forum where countries compare and exchange policy experiences, identify good practices, discuss emerging challenges and adopt recommendations for better policies. The OECD s mission is to promote policies that improve economic and social well-being of people around the world. www.oecd.org 3
34 member countries, 3 + 2 accession 5 Key partners 4
Fast facts 5
Part of a global community 6
PUBLIC PROCUREMENT MATTERS
Public Procurement really matters Government procurement as share of GDP and of total govt. expenditures 12.1 Netherlands Korea Japan New Zealand Estonia Czech Republic Australia Germany Israel Canada Slovak Republic Finland United Kingdom Sweden Iceland OECD (WA) Luxembourg Hungary Poland Norway France United States Austria Belgium Denmark Switzerland Spain Ireland Slovenia Mexico Italy Portugal Greece 25.0 20.0 15.0 10.0 5.0 0.0 0 10 20 30 40 50 as percentage of GDP as share of total government expenditure % % Source: OECD National Accounts Statistics. (2013) 29.0 8
OECD contribution to reforming public procurement Supports 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 Government at a Glance; 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, Colombia 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 9
The 2015 Recommendation on Public Procurement: 12 integrated principles Transparency Accountability Access Participation E- Procurement Efficiency Evaluation Integration Capacity Integrity Balance Risk Management 10
Implementing the 2015 Recommendation: Encompassing OECD procurement activities Vision: An international reference for public procurement standards, good practice and forward-thinking Implementation of the Recommendation 2015-2018 Policy instrument Network Toolbox - Building evidence: - Assessment tools, MAPS - Key performance indicators - Strategic use of PP => Green, SME, innovation - Professionalisation - G@G - eprocurement Reviews Data - Toolbox - innovative, practical, collaborative solutions 11
E-PROCUREMENT IN OECD COUNTRIES 12
9.3 E-procurement Functionalities provided in e-procurement systems 100% 100% 100% 97% 90% 80% 81% 87% 87% 70% 60% 61% 68% 55% Provided in e-procurement systems 50% 40% 42% Mandatory in a central eprocurement system 30% 20% Mandatory within a given threshold (defined in the law or other decrees) 10% 0% Publishing Announcing Provision of Electronic etendering eauctions (in Notification of procurement tenders tender submission of tendering) award plans (about documents bids (excluding forecasted Number of OECD 29 countries providing for by the emails) functionalities in e-procurement systems government Mandatory and Provided needs) Not mandatory but provided Ordering Electronic submission of invoices (excluding by emails) Expost contract management Mandatory in eprocurement systems of specific procuring entities Source: 2014 OECD Survey on Public Procurement 13
9.3 E-procurement Use of e-procurement systems by sectors Use of e-procurement systems by sectors Central e-procurement systems are used Sector specific e-procurement systems are used e-procurement is not used. 100% 90% 80% 70% 3% 7% 7% 17% 7% 29% 10% 10% 10% 10% 10% 13% 13% 10% 10% 10% 10% 10% 7% 10% 60% 50% 40% 80% 86% 79% 80% 79% 79% 79% 80% 77% 30% 64% 20% 10% 0% Health General public services Defence Public order and safety Environmental protection Recreation, culture and religion Education Social protection Economic affairs Housing and community amenities Source: 2014 OECD Survey on Public Procurement 14
9.3 E-procurement Main challenges to the use of e-procurement systems Main challenges to the use of e-procurement systems faced by procuring entities Do not know Difficulties caused by proprietary interfaces/processes (e.g., need for special Low knowledge/ ITC skills 50% 40% 30% 20% 10% 0% Low utility given to the kind of goods purchased by the entity Low knowledge of the economic opportunities raised by this tool Low innovative organizational culture Main challenges to the use of e-procurement systems faced by potential bidders/suppliers Do not know Low propensity to innovation Difficulties caused by proprietary interfaces/processes Low knowledge/ ITC skills 50% 40% 30% 20% 10% 0% Low knowledge of the economic opportunities raised by this tool Difficulties in the use of functionalities (e.g. catalogue management) Difficulties to understand or apply the procedure Source: 2014 OECD Survey on Public Procurement 15
KPI ON PUBLIC PROCUREMENT PRELIMINARY FINDINGS OF THE PILOT PROJECT
Towards key performance indicators 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
The stocktaking report In November 2013 a report was prepared by the OECD providing an overview of what public procurement data is collected by countries in each of the aforementioned four areas. The main conclusions are: Countries are already collecting a significant amount of data. Mostly, they use the information to promote an open, fair and transparent procurement system. However, still some challenges need to be overcome to be able to have complete, clear or timely dataset allowing the creation of indicators.
1. Efficiency of the public procurement cycle 1.1 Use of contracting mechanisms (2011-2014) In terms of value In terms of number. 100% 100% 90% 80% 20% 23% 26% 32% 90% 80% 21% 22% 29% 25% 70% 70% 60% 50% 40% 30% 20% 10% 38% 37% 36% 34% 41% 40% 36% 34% 60% 50% 40% 30% 20% 10% 34% 34% 46% 44% 34% 34% 37% 41% Framework agreements Consolidated contracts One-off contracts 0% 2011 2012 2013 2014 0% 2011 2012 2013 2014
1. Efficiency of the public procurement cycle Uptake of e-procurement (in %) 1.2 Uptake of e-procurement 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2010 2011 2012 2013 2014 Pilot AVG
1. Efficiency of the public procurement cycle 1.4 Savings Services 28% Goods 72%
1. Efficiency of the public procurement cycle 1.4 Savings Energy (incl. Electricity) 25% Services 28% Goods 72% Software Licensing, 13% Hardware and IT equipment Fuel and LGP 8% Mobile Communications 8% Paper and Stationery 6%...
1. Efficiency of the public procurement cycle 1.4 Savings Goods 72% Services 28% Facility management 15% Landline Communications 4% General consultancies Insurance and financial services 3% 4%
2. Openness and Transparency of the public procurement cycle 2.1 Promoting competition: procurement procedure 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2011 2012 2013 2014 Open Tendering Single source contracting (direct award) Restricted Procedure 2.2 Promoting competition: number of bids and number of international bids 2.3 Transparency of public procurement information
MAIN CHALLENGES AND POSSIBLE IMPROVEMENTS
Main challenges Lack of extensive nation-wide data on public procurement Discrepancy between CPB s roles across countries Use of different contracting mechanisms and classification of sectors
Next steps Review the types of data collected and methodology Stricter definition of the scope of data More extensive data collection and coordination Aligning the OECD and national classification methods
For more information on OECD work on public procurement www.oecd.org/gov/ethics/public-procurement.htm
paulo.magina@oecd.org Thank you 29