Preventing Corruption through Public Procurement - goPRS


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is a fully integrated software designed specifically to:
– Improve public procurement regulatory bodies internal review and monitoring of the
procurement approval process
– Reduce human interaction and personal contacts between
procurement officials (MDAs) and BPP staff that can give rise
to bribery opportunities
– Kick-off BPP’s oversight on budget appropriations versus
reported procurement actions
– Manage and publish procurement-related information (vendors
database, prices lists) to assist suppliers in preparing their
best offers and governments in assessing them to support the
procurement process.

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Preventing Corruption through Public Procurement - goPRS

  1. 1. Tackling corruption at its source Expert Group Meeting on Transparency, Competition and Objectivity in Public Procurement IACA, Austria, 24-26 September 2012 Alain Nkoyock, PhD, Chief, Corporate Networks Unit, ITS, UNOV/UNODC Shadi Al Abani, Systems Development Specialist, Team Leader, ITS, UNOV/UNODC Julia P. Davis, JD, Director, Center for Public Procurement Law & Policy, ILI (U.S.)24-26 September, 2012 1
  2. 2. Outline• BPP Project: Background and Phased-Approach – The problem of public procurement corruption in Nigeria and the reform Agenda – The mission of the Bureau of Public Procurement (BPP) – BPP Project Phase I: ICT Infrastructure and Data Centre (goIDM) completed – BPP Project Phase II: Public Procurement Review Software (goPRS) and training• goPRS Development Strategy – Ten Challenges faced by BPP and goPRS response – Scope of goPRS project – goPRS main features and workflow process – goPRS development: Support and technical approaches – goPRS web-based applications (Interface MDAs-BPP) – goPRS training modules – Potential benefits of goPRS• goPRS: Can the Nigerian experience be replicated? – Some of the challenges prior to PP Act 2007 – Some statistics on PP corruption – Summary of PP and related international/regional instruments – UNODCs Convention against Corruption (UNCAC) and PP issues – Introduction of ICT systems on PP: Various opinions – goPRS and e-procurement systems 2
  3. 3. BPP ProjectBackground and Phased-Approach 3
  4. 4. The problem of public procurement corruption in Nigeria and reform agenda• The introduction of Public Procurement Reforms in Nigeria followed a World Bank Country Procurement Assessment survey conducted in 1999• Outcomes of the assessment report: – Positive relationship between poor/weak public procurement procedures and corruption – Positive relationship between poor/weak public procurement procedures and negative consequences on national development especially in the area of infrastructural development in Nigeria – Out of every 1.00 Naira spent by Government 60 kobos were being lost to underhand practices – An average of 10 billion US$ was being lost annually due to fraudulent practices in the award and execution of public contracts through inflation of contract cost, lack of procurement plans, poor project prioritization, poor budgeting processes, lack of competition and value for money and other kinds of manipulations of the procurement and contract award processes.• The Budget Monitoring and Price Intelligent Unit (BMPIU known as Due Process) was setup in 2001 to address shortcomings• To institutionalize the operations of BMPIU, the Public Procurement Bill was passed by the National Assembly on the 30th of May, 2007 and subsequently signed into Law on the 4th of June, 2007• Establishment of the National Council on PP and the Bureau of Public Procurement (BPP) as the Regulatory Authorities responsible for Monitoring and Oversight of PP and Practices• The Accounting Officer of a procuring entity has the responsibility to ensure that the provisions of the Act and the regulations laid down by the Bureau are complied with. 4
  5. 5. Missions of the Nigerian Bureau of Public Procurement (BPP)• Ensures efficient and integrity-based monitoring of the implementation of all Federal Government capital projects – Provides legal and institutional framework and professional capacity for public procurement in Nigeria (Public Procurement Act 2007)• Specific objectives: – Harmonize existing government policies and practices on public procurement and ensure probity, accountability and transparency in the procurement process – Establish pricing standards and benchmarks – Ensure the application of fair, competitive, transparent, value-for- money standards and practices for the procurement and disposal of public assets – Attain transparency, competitiveness, cost effectiveness and professionalism in the public sector procurement system. 5
  6. 6. BPP Project: Background and Phased-Approach• To achieve its mission, BPP needed to be equipped with modern ICT infrastructure and software – Scope of application: 500+ Federal Government Ministries, Departments, Parastatals, and Agencies (MDAs) – All other Entities outside the foregoing which derive at least 35% of Funds appropriated or proposed to be appropriated for any type of procurement described in the Act from the Federation share of Consolidated Revenue Fund• BPP initiated a Databank Management System Project (ICT infrastructure, software systems, and training) in 2009• UNODC ITS was involved in this project on 26 October, 2009• Phased approach: Phase I: 2009–2011 & Phase II: 2012–2013 6
  7. 7. Phase I: ICT Infrastructure and Data Centre• Distributed Information Technology and Data Communications Infrastructure (goIDM) – Data Centres, LANs, PCs, etc. – Internet data connectivity• Day-to-Day activities (Email, Documents, Administrative Applications, World Wide Web)• Website• IT Capacity Building: Training (end-user) Prerequisites for goPRS deployment: – Political will to reform – Legal framework – ICT infrastructure environment at BPP 7
  8. 8. BPP’s ICTInfrastructure Environment 8
  9. 9. Phase II: Public Procurement Review Software and Training• Initial funding provided by BPP• Funding Agreement (signed on 15 December, 2011)• Major Deliverables: – Public Procurement Review Software (goPRS): substantive system that would address the monitoring and oversight of public procurement in Nigeria – Training – Handover and Sustainability• Development of goPRS version 1.0 : 2012-2013 9
  10. 10. goPRS Development Strategy 10
  11. 11. 10 Challenges faced by BPP and goPRS response (1/3) Needs goPRS Response1 National price database Having a “National Price Database” would BPP receives requests to issue a “Certificate of no Objection” for dramatically reduce corruption by promoting projects above certain thresholds from 500+ MDAs. Monitor the transparency, value for money, and credibility. prices of tendered items and keep a national database of At the moment, this process is totally standard prices. unmanaged with ample room for corruption.2 Contractors and Service Providers Database goPRS makes available a Vendors database to This is the vendor registration database that assigns a unique solve the following issues: award of contracts to contractor identification number, categorizes, classifies and friends, relations and use of primordial disseminates vendor performance data in support of federal considerations in exercising PP decisions (by government procurements and awards. Accounting Officers in MDAs). See also 4) below. Three government organizations were in charge of the registration of vendors.3 Procuring entities (MDAs) database goPRS provides the database to manage and Information about the procuring entities (700 to 800) is maintain this, making it readily available to BPP institutional knowledge in BPP. The need arises to share this departments and procurement officers. knowledge among different departments within BPP in a timely manner.4 Capital budget (Appropriations)/projects database Kick-off BPP’s oversight on budget The budget is released “in print” by the government and includes appropriations versus reported procurement the planned projects and procuring entities (MDAs). The need actions to avoid the abandonment of arises in BPP to tackle this huge amount of information which is government projects after huge sums of money time consuming. had been paid out to unqualified and ill- 11 equipped contractors (BPP and National Council)
  12. 12. 10 Challenges faced by BPP and goPRS response (2/3) Needs goPRS Response5 Complaints management module (9 steps) Provides the necessary management and workflow BPP can manage complaints from a tools that help make this task easier to handle. contractor/consultant/MDA if the Accounting Officer (AO) fails to The Bureau shall make its own decision within make a decision regarding a complaint within the given period or the twenty-one (21) working days after receiving the complainant is not satisfied with his decision. The complainant may complaint and give reasons for its decision and forward his complaint to the Bureau within ten (10) days from the date he received a response from the AO. remedies granted if any.6 Audits goPRS provides the necessary reports and The Act empowers BPP to review the procurement and award of intelligence tools for an early detection of contract procedures of every entity to which the Act applies and to deficiencies. Whenever a deficiency in the perform procurement audits and submit reports to the National procurement process occurs, it will most likely result Assembly bi-annually in costlier procurement, fraud or corruption.7 Reports module goPRS reporting module would render this problem At the moment, BPP’s reports are manually collated from different trivial. In addition to their regular reports, BPP would systems and departments. This is very time consuming and involves have access to other reports and information on disrupting the daily tasks of departments. demand. 12
  13. 13. 10 Challenges faced by BPP and goPRS response (3/3) Needs goPRS Response8 Investigation module (intelligence) to Intelligence can only be achieved by having the necessary information in a detect various offences structured manner. This is a normal second step that can only start once Collusion, unlawful influence, undue interest, goPRS is functional and in use in BPP. At that stage, information would favour, fraudulent agreement, bribery or have been ready to be queried and analyzed. corruption; Directly or indirectly or attempting to influence the procurement process to obtain an unfair advantage in the award of a contract Splitting of tenders to enable evasion of monetary thresholds set9 MDA Support and continuity module As in any successful system, goPRS would have a support module for MDAs communicate with BPP through MDAs. Requests would be systematically channeled and answered by different unstructured channels “calls, responsible parties. Support would usually hone down the issues and letters, media, etc…” recommends better ways of doing things. The need arises to have this line of As with all our products, UNODC would ensure the continuity and support communication more formal and for goPRS and integrates new functionalities and recommendations. transparent. The number of MDAs further makes this task a daunting one.10 Communication standardization with goPRS, being a Procurement Review Software, does not interfere with the e-procurement systems MDAs choice of using any of the readily available e-procurement systems in the market. However, having the role of Review and Oversight, there is a need to interface with such e-procurement systems. goPRS as a response defines the standards of electronic communication. 13
  14. 14. Scope of goPRS project 14
  15. 15. goPRS Main Features• Oversight: – enhance the ability of a PPRA to oversee and monitor individual procurements and to review specific contract awards which fall above prior review thresholds (the issue of cumulative contracts needs to be borne in mind ie where framework agreements are used) – increase the efficiency of the procurement process in terms of both time and money and to ensure that each procurement follows the UNCITRAL principles of accountability, fairness, transparency and equality• Management and Monitoring: – organise data and information to provide MDAs with the information needed to better manage the procurement process as a whole. – By identifying inefficiencies, gaps and redundancies in procurement procedures, efficiencies in both time and money can be achieved. – Importantly, MDAs will be able to reference pricing data and access information on the eligibility and qualifications of specific bidders. 15
  16. 16. goPRS Main Features• Prevention and detection: – gather data and knowledge of corruption patterns and modalities in procurement by focusing on understanding the actual experience of corruption, its forms and the areas of vulnerabilities. – goPRS is an evidence-based tool that collects and analyzes data on patterns of unexpected prices or other information to provide more solid and actionable evidence of possible corruption and its nature. – The goal of goPRS is not to simply score or rank, but rather to produce information for analysis, management and decision- making to obtain greater value for money and to deter fraud and corruption. 16
  17. 17. goPRS Development Strategy: Main Features and workflowgoPRSis a fully integrated software designed specifically to: – Improve BPP’s internal review and monitoring of the procurement approval process – Reduce human interaction and personal contacts between procurement officials (MDAs) and BPP staff that can give rise to bribery opportunities – Kick-off BPP’s oversight on budget appropriations versus reported procurement actions – Manage and publish procurement-related information (vendors database, prices lists) to assist suppliers in preparing their best offers and governments in assessing them to support the procurement process. 17
  18. 18. goPRS:Proposed Workflow Process 18
  19. 19. goPRS: Workflow and Key Modules 19
  20. 20. goPRS:Functions of BPP and MDAs 20
  21. 21. goPRS Development: Support and technical approaches• Various supports received – UNODC – UNCITRAL – Dr. Julia Davis, Expert adviser, International Law Institute, Washington D.C. – BPP’s experts• Requirements analysis proposal document – Serves as a starting point for the discussions between UNODC ITS and BPP to facilitate the understanding of the Public Procurement Act 2007 by narrowing down its technical aspects – Contains additional recommendations reflecting acknowledged international procedures, guidelines, and standards – Highlights the development stage and modules of goPRS• Development of the web-based application (Interface MDAs – BPP)• Discussion with BPP’s officials 21
  22. 22. goPRS Development Methodology• Agile software development approach• Core practices: – Small releases – Continuous integration – Refactoring – Collective ownership – Simple design – Testing – Onsite customer – Coding standards 22
  23. 23. Interface BPP-MDAs: goPRS home screen 23
  24. 24. goPRS– Login screen 24
  25. 25. goPRS– Registration form 25
  26. 26. goPRS– Department /Parent Ministry screen 26
  27. 27. goPRS Learning Modules• Development of training courses and case studies linked to public procurement used by BPP• goPRS training modules can be used by PP training centres such as ILI, IDLO, etc.• PP courses will be fully consistent with procurement requirements of the International Financial Institutions (IFIs), particularly the World Bank.• goPRS training modules will also support the implementation of the 2011 UNCITRAL Model Law as it is adopted in many Member States. 27
  28. 28. goPRSCan the Nigerian experience be replicated? 28
  29. 29. Potential Benefits of goPRS• Transparency, participation and competition: – publishing the rules of the system allow more relevant information to be made available at reasonable cost than previously; it can give better market access as the market is opened up to entrants that might not otherwise participate• Enhanced administrative efficiency (time and costs):• Process efficiencies with the development of the workflow• Supporting integrity and preventing corruption: – Reducing human interaction and the personal contacts between procurement officials and BPP that can give rise to bribery opportunities – A more strategic approach to procurement: using data gathered through goPRS to allow performance to be guided by information and analyses (comparison of budget appropriations and procurement actions, performance of MDAs and procurement officials, etc.) – Traceability – i.e. records of each procurement process – gives the ability to monitor, evaluate and improve not only individual procurement procedures but overall system performance and trends, and to detect and prevent corruption. 29
  30. 30. Public Procurement Corruption: Some Statistics• Public procurement represents over 80% of the world’s merchandise and commercial services (Organization for Economic Cooperation and Devt., 2004)• The losses associated with public procurement bribery are estimated to exceed 400 billion US$ per year worldwide (Transparency International) 30
  31. 31. Some of the challenges prior to Public Procurement Act 2007• Absence of legal and institutional framework• Absence of standard bid documents• Non advertisement for projects• Absence of precise criteria for selection of successful bidders prior to bidding process• Influence peddling and sycophancy. 31
  32. 32. Summary of PP and related international/regional instruments• Anti-corruption instruments that covers PP: – UN Convention Against Corruption (UNCAC) (2005) – African Union Convention on Preventing and Combatting Corruption (2003) – OECD Anti-Bribery Convention (1997)• Procurement instruments implementing principles of UNCAC in PP (transparency, competition, objectivity): – WTO Agreement on Government Procurement (GPA, (2012) - Plurilateral agreement – Asia-Pacific Economic Cooperation (APEC) non-binding principles on Government Procurement (1999) and Transparency Standards on Government Procurement (2004) – regional – EU Procurement Directives 2004/17/EC and 2004/18/EC (in process of revision) – regional – COMESA Procurement Directive and Regulation (2003 and 2009) – regional – North American Free Trade Agreement (NAFTA, 1994, PP in Chapter 10) – regional – UNCITRAL Model Law on Public Procurement (2011) + Guide to Enactment (2012) – World Bank, EBRD, and other regional development banks have their own procurement standards and guidelines, which as a general rule must be used for bank-financed procurement 32
  33. 33. UNODCs Convention against Corruption (UNCAC)• UNCAC - entered into force on 14 December, 2005 (• Convention Highlights – Prevention (goPRS???) – Criminalization – International cooperation – Asset recovery• Signatories: 140 Parties: 159 (as of 6 January, 2012) 33
  34. 34. goPRS vs. e-procurement systems• goPRS 1.0 is not an e-procurement system but can interface to e-procurement systems• E-procurement (procurement through ICT): organization of tenders by electronic means via an internet portal.1) Same potential benefits as goPRS: – Transparency, participation and competition; Enhanced administrative efficiency (time and costs); Process efficiencies; Supporting integrity and preventing corruption; evidence-based analyses and traceability.2) Caveats: – lack of information systems and deployment complexity at individual MDA, culture, number of MDAs per countries, security, reengineering of processes, costs and sustainability, hosting issues, etc.3) ICT deployment with the support of the national regulatory body4) Need to update the national legal system to accommodate 3). 34
  35. 35. goPRS vs. e-procurement systems• goPRS 1.0 is not an e-procurement system but can interface to e-procurement systems• E-procurement (procurement through ICT): organization of tenders by electronic means via an internet portal.5) Introducing eGP involves a significant investment in ICT, and it should be considered as an opportunity to reform the entire PP process and to enhance governance standards managed by the national regulatory body6) goPRS will be part of the ICT investment in a PP system with the provision of an e- procurement module accessible by all MDAs/bidders to conduct their procurement actions7) Question: Is the UNCITRAL Model Law (2011) was designed with this approach expressly in mind? 35
  36. 36. Introduction of ICT in PP: Opinions• Recognition that a fully-integrated IT procurement review system will involve a lengthy reform program, most effectively implemented through a staged approach with different considerations for each stage in the procurement process.• UNCITRAL: A longer-term, but equally important potential benefit [of IT] is that it allows a more strategic approach to procurement, harnessing the data that IT can generate to allow the pursuit of goals and performance to be guided by information and analyses rather than by procedures alone. Benefits through internal transparency, integrity support and efficiency savings can be achieved. Internal transparency and traceability – meaning better records of each procurement process – gives the ability to monitor, evaluate and improve not only individual procurement procedures but overall system performance and trends. Model Law Guide; Paragraph 49.• The United Nations Convention Against Corruption through its Article 61 [Collection, exchange and analysis of information on corruption] mandates that each State Party “shall consider analyzing, in consultation with experts, trends in corruption in its territory, as well as the circumstances in which corruption offences are committed” and “shall consider monitoring its policies and actual measures to combat corruption and making assessments of their effectiveness and efficiency. 36
  37. 37. Thank you Dr. Alain Nkoyock, Chief Email: Mobile: +43 699 1459 5979 Information Technology Service Division of Management UNOV/UNODCWebsites:, 37