Procurement Case Study - Chile

Application of the OECD/DAC assessment methodology: Chile’s CPAR Jorge Claro, President and CEO International Procurement Institute, INPRI

Country Procurement Assessment Report (CPAR)
Execution of loans/grants are carried out generally observing the policies of the MDBs
There is intention to utilize national systems
MDB’s Country Assistance Strategies must include procurement considerations
The CPAR is the most important tool to determine the soundness of a national system, allowing MDBs to assess a country’s ability to successfully execute the projects financed by them

Chilean Setting
The process started in 2007 but budgetary constraints and bureaucratic hurdles delayed its start until 2008
2009 is an election year in Chile and the political climate has changed as government priorities have shifted
What was a priority and had a champion in 2007 lost its momentum

Chilean Setting
MDBs leverage in Chile is limited
The Government has easy access to International Capital Markets
IADB made a loan to Transantiago, the Santiago Public Transportation System.
The loan was declared unconstitutional

Chilean Setting
Transantiago is the subject of a major domestic dispute amongst parliamentary factions, centering on effectiveness, rate increases and sources of funding for the system. It has affected IDB’s position in the country
The loan has not been repaid

Chilean Setting
The CPAR must be negotiated at the highest levels of government
Procurement authorities may have their own perspectives or agendas
Chile is not a member of the OECD, but has expressed an interest in joining

Setting
The OECD/DAC methodology is
Highly Participatory
Many stakeholders have to be identified
Represents a serious investment of time and resources, and the participation of many public officials requires political will
Somewhat rigid, missing nuances of the procurement process
Market Conditions
Legal Aspects

Key Players
Government of Chile
Ministry of Finance
Procurement Authority
Ministry of Works
Ministry of Housing
Supreme Audit Entity
IADB/WB Team
Bank Staff
Local Consultants
Legal Consultant
Economists
Procurement Specialists
International Consultants
Procurement Specialists

Key Players
ChileCompra Users
All Ministries
Decentralized Entities
Armed Forces
Local and Regional Governments
Vendors and Suppliers
Small and Medium Enterprises
Importers and Exporters
Organized Constituencies
Chambers of Commerce
Professional Associations
Media
Pro-OECD Lobby

Issues
The OECD/DAC Methodology is not applied in a vacuum
Participation from all sectors and stakeholders is essential
Identifying all of them is difficult
Only a strong central authority will have the authority to convene them
Delays caused initial levels of participation and ownership to wane

Issues
Procurement authorities play a critical role in validation workshops
A procurement strategic plan for 2008 – 2012 was published without inputs from the CPAR
CPAR findings that differed from or meant changes to the plan would have been controversial
Attitudes towards the exercise set the tone
Willingness to learn from others and address problems is essential, but can be constrained by the desire to obtain the best possible grade for a system that is perceived as adequate

Issues
Limited budget had impact on depth and breadth of audit samples and regional coverage
Sample selection requires country knowledge and is key to exercise

Issues
When systems are perceived as poor, Governments are more amenable to finding problems and identifying solutions
When systems are perceived as adequate, Governments prefer not to identify issues and leave the system as-is, as priorities lay elsewhere
Chile is perceived internally as having a very good system and is regarded as the standard-setter in the region

Approaches
The OECD/DAC Methodology appears to be more applicable to emerging economies than to developed countries
The WB/IADB team had to reconcile the OECD/DAC’s scientific rigor to the realities of a highly charged political scenario

Approaches
The WB/IADB team had to find ways to produce a CPAR after the validation workshops yielded results that contradicted the initial findings of the local consultants

Outcome
The CPAR was completed in 2008 and the draft report is currently undergoing revisions (May 2009)
Though the exercise was successful, opportunities for a more in-depth discussion on present and future issues and further refinement of the system could, perhaps, have been exploited further

The end
Comments and questions are welcome
Jorge Claro
President and CEO
INPRI
10708 Lady Slipper Tr.
North Bethesda, MD 20852
Tel 301 230-9011
[email_address]

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Procurement Case Study - Chile

by icgfmconference on May 13, 2009

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Procurement Case Study - Chile — Presentation Transcript