Friday 915 Public Procurement Reforms Bigart

Public Procurement Reform and Importance in the Current Economic Climate Contributions to Economic Stability and Growth Pamela Bigart World Bank 22 May 2009

Importance of Procurement
Public Procurement systems are at the center of the way public money is spent since budgets get translated into services largely through the government’s purchase of goods, works and services

What’s Procurement Got to do with It?
Percentage of GDP
Economy, Efficiency and Value for Money
Service Delivery
Foreign Investment in Country
Investment in Building Private Sector Capacity
Trade Policy – Opening Doors for Growth and Competition

GDP and Percentage of Budget
Overall spending on procurement by governments has been estimated to be 15% of GDP (much higher in many countries)
Procurement as a percentage of budget expenditure ranges from to as high as 70%
Clearly, efficient procurement translates to obtaining more value for money

Size of Procurement in Selected Countries
Country
Global
Angola
Azerbaijan
Bulgaria
Dominican Republic
Malawi
Vietnam
% Total Expenditure
12-20%
58%
34%
30%
20%
40%
40%

Economy, Efficiency and Value for Money
Economy and efficiency are traditional principles of a well functioning public procurement system – generally delivered through competitive marketplace
Value for money is expanding traditional focus to include achieving results through the public procurement system – brings into play the concept of quality and other criteria as a means of determining effective use of public funds and service delivery

Service Delivery
Many systems are focusing less on the input side (paying for goods, works or services) to a focus on the service delivery side.
Ensuring that goods, works and services purchased through the government system provide for the needs of the citizens
Use of result focused instruments with payment based on delivery of required services or on performance criteria

Foreign Investment
Public procurement helps define the business environment in a country
Attracting new business investors into the country requires a fair playing field where foreign investors see the opportunity for development and growth

Building Private Sector Capacity
Competition
Partnership
Training
Facilitation
Governance environment
Information

Opening Doors for Growth and Competition
Cross border trade agreements
Exposure to competition
Reducing dependencies on governmental protectionist policies

Role of Technology
Expands access to market
Provides for greater transparency
Increases confidence in governance
Increases efficiency
Captures data for better management and results
Involves stakeholders

What is Procurement Reform?
Creating a sound, transparent and fair legal framework
Supporting implementation with tools, documents and procedures
Ensuring quality and capacity of those implementing procurement
Sound, transparent and fair governance and public financial management system with full integration

Procurement Reform (continued)
Supporting a competitive market
Feedback mechanisms to ensure that system remains relevant
Controls and accountability
Access to Information
Reliable partner
Stakeholder involvement

What Lessons have we Learned?
Procurement reform costs money and takes time
Some reforms can deliver results in the short term
Reform cannot be effective if isolated from broader public sector management and financial management reform
Reforms require long term commitment to achieve sustainable results

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Friday 915 Public Procurement Reforms Bigart

by icgfmconference on May 13, 2009

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Friday 915 Public Procurement Reforms Bigart — Presentation Transcript