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Amity Center for eAmity Center for eAmity Center for eAmity Center for e----Learning (ACeL)Learning (ACeL)Learning (ACeL)Learning (ACeL)
TitleTitleTitleTitle:
ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY
SubtitleSubtitleSubtitleSubtitle::::
IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC
PROCUREMENT IN CAMEROON
Student’s nameStudent’s nameStudent’s nameStudent’s name::::
NANG AKONO ACHILLE LEGER
A dissertation submitted in partiaA dissertation submitted in partiaA dissertation submitted in partiaA dissertation submitted in partial fulfillment of the requirements ofl fulfillment of the requirements ofl fulfillment of the requirements ofl fulfillment of the requirements of
Masters in Finance and ControlMasters in Finance and ControlMasters in Finance and ControlMasters in Finance and Control
AAAAt thet thet thet the
Amity Center for EAmity Center for EAmity Center for EAmity Center for E----learninglearninglearninglearning
Amity University, NoidaAmity University, NoidaAmity University, NoidaAmity University, Noida
JanuaryJanuaryJanuaryJanuary 2013201320132013
AKNOWLEGEMENTS
Researcher would like to take this opportunity to thanks those who have helped him (in
every single minute to write this research paper. First of all, researcher would like to
thank his family (brothers, sisters and his parents), especially his mother NANG
JOSEPHINE and father NANG Gilles Celestin for their courage, strength, financial
assistance and advice during the research process; Also researcher would like to extend
his grateful thanks to supervisors Mr. Steve MEKA (head of Procurement Management
Unit at Ministry of Labor and Social Security) for his support and contribution to this
research, and Mr. Aristide NYONGORO (Engineer for statistical Application and Assistant
Research Officer at MINEPAT), Mrs. AKAMBA PEGGY ROSELYNE(head of
Procurement Management Unit at Ministry of Transport), Mr. TASSOLIMO
Fabien(Ministry of Transport) for devoting their time to support this research, their
politeness and patency and lastly for their kindness and cooperation. Furthermore,
researcher warmly expressed his thanks to all of persons working at Direction of general
affairs at the Ministry of Transport, and his lovely girlfriend MAYEMI MBIATA JEANNE
CORNEILLE for her advice, politeness and patency. Above all, Researcher would like to
thank almighty God justification for his existence. Lastly, Researcher would like to thanks
his friends who have encouraged and supported him in one way or another to ensure that
he completely successful.
Thank you all.
NANG AKONO ACHILLE LEGER
Yaoundé: 30th
December 2012.
LIST OF ABBREVIATION
C2D Debt Relief and Development Contract
CA Contracting Authority
DCA Delegated Contracting Authority
GESP Growth and Employment Stategy Paper
ICC International Chamber of Commerce
IT Invitation to Tenders
MA Mutual Agreement
MINEPAT Ministry of the Economy, Planning and Regional Development
MINLSS Ministry of Labour and Social Security
MINPC Ministry of Public Contracts
MINT Ministry of Transport
NGO Non Governmental Organization
OIIT Open International Invitation to Tender
ONIT Open National Invitation to Tender
PCRA Public Contracts Regulatory Agency
PE/PSPE Public Establishment/Public and Semi-public Enterprise
PIB Public Investment Budget
PMU Procurement Management Unit
PPA Public Procurement Act
PPAA Public Procurement Appeal Authority
PPRA Public Procurement Regulatory Authority
RIIT Restricted (limited) International Invitation to Tender
RLA Regional and Local Authority
RNIT Restricted (limited) National Invitation to Tender
RQ Request for Quotation
STB Special Tenders Board
TB Tenders Board
GESP growth and employment Strategy Paper
CAD Contracting authority delegate
OB Operating Budget
NA National assembly
PA Proposal amendment
ONP Official News Paper
IAF independent amortization fund
PAI Public administrative institution
SME small and medium enterprise
VSME Very small and medium enterprise
AOD authorizing officer Delegate
NACC National anti-coruption committee
RRI Rapid Results Initiatives
TABLE OF CONTENTS
LIST OF TABLESErreur ! Signet non défini.
LIST OF FIGURESErreur ! Signet non défini.
ABSTRACT.....................................................................................................................................................1
1.0.Introduction..............................................................................................................................................2
1.1.The background of the Study.................................................................................................................2
1.2.The Research Question ..........................................................................................................................5
1.3.Objective of the Study.............................................................................................................................5
1.4.Significant of the Study ..........................................................................................................................5
1.5.Limitation..................................................................................................................................................6
2.0.Methodology .................................................................................. …………..6Erreur ! Signet non défini.
2.1.Introduction..............................................................................................................................................6
2.2.What actually happened-the way it happened......................................................................................7
2.3.Review of Data Collection Methods.......................................................................................................8
2.4.Criteria for Sample Selection .................................................................................................................9
2.5.Pilot Study..............................................................................................................................................10
2.6.Methods of Analysis..............................................................................................................................10
2.7.Limitations .............................................................................................................................................12
3.0.Literature Review...................................................................................................................................12
3.1.Introduction............................................................................................................................................12
3.2.Discussion about literature review......................................................................................................12
3.3.Its relationship to methodology...........................................................................................................13
4.0.Theoretical Framework .........................................................................................................................13
4.1.Introduction............................................................................................................................................13
4.2.Public procurement system ........................................................................14Erreur ! Signet non défini.
4.3.Analysis of procurement according to economic theory..................................................................14
4.4.Dynamic of the process: New rules, articulations and innovations ................................................23
4.5.Dynamic procedures by the multiplicity of actors and factors in explaining the consumption of
PIB……………………… ................................................................................................................................27
5.0 Empirical Findings……………………………………………………………………………………………. 32
5.1 Introduction……………………………………………………………………………………………………...32
5.2 Examination and assessment of the system……………………………………………………………...32
5.3 Analysis of the effectiveness and the reliability of the system………………………………………..39
5.4 Empirical analysis of the behavior of the curve of expenditure devoted to public investment….52
6.0 General conclusion…………………………………………………………………………………………….55
6.1 Conclusions……………………………………………………………………….........................................55
6.2Implications and Recommendations…………………………………..........................57
LIST OF TABLE
Table-1 : Steps of the call for tenders procedure...........................................................23
Table-2 : Steps of the OTC procedure……………………………………………………….24
Table-3: Attrition of procedures…………………………………………………………….34
Table-4: Amounts of public procurement and Endorsements by Contracting Authority and nature of
services in 2010……………………………………………………………………………36
Table-5: Breakdown of credits Delegates by Region in 2010……………………37
Table-6: Credits delegate by region in 2011………………38
Table-7: Processing Time of bids by type Contracting Authorities in 2006…..38
Table-8: Evolution of programming files per category of stakeholders……………41
Table-9: Percentage of invitations to tender and award results published…………..42
Table-10: Percentage of endorsements by reporting to the total number contracts awarded……47
Table-11: Invitation to Tender subject of appeals to the number of Invitations to Tender launched.47
Table-12: Ratio of credits delegated removed……………………………………………………………….48
Table-13: Distribution of markets earned on international competitive bidding by type of
enterprise…………………………………………………………………………………………………………..49
Table-14: Local bidders selected through the markets in international competitive
bidding……………………………………………………………………………………………………………50
Table-15: Level and quality of implementation of projects in terms of
number………………………………………………………………………………………………………….51
Table-16: PIB rate consumption
1
LIST OF FIGURES
Figure-1: Overview of Tasks Required by the Project and Procurement Planning……………….4
Figure-2: Amount of Contracts and amendments (billion FCFA) from 2006 to 2011…………14
Figure-3: reason for choosing negotiation………………………………………………………….16
Figure-4: Schematic diagram of preparation of the Annual Finance Act…………………….30
Figure-5: Evolution of annual allocations compared to annual consumption…………….31
Figure-6: situation of programming by contracting authority………………………………33
Figure-7: Consistency of contracts issued and allotted……………………………………33
Figure-8: comparision between contracting authority…………………………………….34
Figure-9: RQ by category of the contracting Authorities in 2008…………………………….35
Figure-10: RQ by category of the contracting Authorities in
2011………………………………………………………………………………………………………….35
Figure- 11: Evolution of Studies…………………………………………………………………………..40
Figure -12: Change against the number of contracts awarded following a call for tenders or
OTC………………………………………………………………………………………………………………..44
Figure-13: Percentage of the amount of the subtotal price Endorsements of the basic Markets and
total value of contracts …………………………………………………………………………………….44
Figure-14: Unfavorable opinions expressed by STB……………………………………………………47
Figure-15: Appeal unfounded to the number of appeals
received……………………………………………………………………………………………………………48
Figure-16: public contracts awarded to national or local
bidders………………………………………………………………………………………………………………49
Figure-17: Evolution of physical cumulative output rate……………………………………………………………………52
Figure-18: Autocorrelation of the series of physical achievements on the basis of statistics LJUNG BOX
……………………………………………………………………………………………………………………………………………………53
Figure-19: Autocorrelation of the seasonally adjusted series ……………………………………………………………55
Figure-20: tactical and operational procurement process…………………………………………………..56
2
1
ABSTRACT
Public procurement is the means by which the state and its subdivisions carry out work or
studies and acquire goods and services. Thus, the quality of public expenditure is
dependent on the performance of the public procurement system in the phases of
planning, execution and performance of contracts.
Between 2010 and 2012, the share of public investment budget has increased from
26.5% to 28.30% of the state budget. This heading change target of 30% by 2020,
considered in the growth and employment Strategy Paper, as necessary to reduce the
infrastructure deficit.
Nowadays, all government expenditure depending fully in private sector for products or
services, a good example is within stationery items, construction of roads, cleaning
works, transportation and so forth. These procurements have been associated with
many scandals such as favorism in awarding of procurement contracts to some
companies.
However, despite the efforts made by the Authorities to increase the performance of our
public contracts system, it is still subject of request for improvement by several actors
notably with regard to the heavy procedures, need for celerity, fight against corruption
and the effective application of sanctions. To attain this objective, the creation of a
ministry exclusively devoted to public contracts in the wake of the major achievements
theme is therefore aimed at solving these problems and rendering our system more
efficient.
The aim of this thesis is to assess the relevance of organized programming and
procurement process, and their impact on public spending following an analytical
approach developed on a quarterly sequence from the first quarter 2003 to the fourth
quarter 2011. This study has targeted observation and data collection about the rate of
public investment budget during this period which have shown there is ineffective of
the public procurement process that are injected by the public procurement Act of
2004 and others are caused by inadequate budget to pay suppliers on time, limitation
of skills and knowledge to the ministerial staffs and PMU staffs.
Furthermore, researcher has recommended that there is a need to emphasis training of
user PMU staffs and thinking how to dematerialize procurement process. However this
new Ministry is not panacea – solution of everything but it must be dynamic to
accommodate (new issues as it will be raised new techniques and principles that will
insure accountability and efficiency on procurement. However there is a need to put in
place also TV programs of public procurement to enhance information in fighting against
bad behavior during procurement process.
2
1.0. Introduction
It is present the background and the nature of the problem being considered. Thus, the
study is set in context explaining why this research is important, highlighting significant
issues, problems and ideas. Finally stated the aim and objectives of study.
1.1.The background of the Study
Within the perspective of becoming an emerging country by 2035 Cameroon set
objectives based on growth and employment in the growth and employment Strategy
Paper (GESP).The Government thus intends to invest heavily in infrastructure, convince
about their driving role in facilitating exchange and promoting strong growth.
Cameroon adopted the 2009 growth and employment Strategy Paper (GESP), as a
framework for government action for the Decade 2010-2020. This strategy focuses on
achieving more sustainable infrastructure and quality. This requires a proper
implementation of public expenditure, which requires that the national system of public
procurement to be efficient.
However, despite the efforts made by the Authorities to increase the performance of our
public contracts system, it is still subject of request for improvement by several
stakeholders notably with regard to the heavy procedures, need for celerity, fight against
corruption and the effective application of sanctions.
To attain this objective, the creation of a new ministry exclusively devoted to public
contracts in the wake of the major achievements theme is therefore aimed at solving
these problems and rendering our system more efficient.
The issue of the effectiveness of public expenditure is acute. Improving the performance
in this area can be obtained through two essential modalities. First, it would reduce
losses along the chain of expenditure, which would concentrate a greater level of
resources at the end of string. Secondly, it should initiate actions to improve the impact of
resources that reach the end of the chain. At resources unchanged, an increase in the
efficiency of public expenditure therefore increases the supply of public goods1
.
To make its market system efficient and harmonize with international standards,
Cameroon enriched the legislative framework relating to several texts2
, namely:
1
BIDIAS (Benjamin), Les finances publiques du Cameroun 2eme édition, B.B., S.A.R.L., 1982, Yaoundé
2
http://www.armp.cm/textesmp.htm
3
Box: Some national laws governing the procurement process in cameroon
- Decree n ° 2004/275 of 24 September 2004 on Public Procurement Code;
- Decree n ° 2004/275 of 24 September 2004 to institute the Public Contracts Code;
- Decree n ° 2003/651 of 16 April 2003 laying down detailed rules for the implementation of tax
and customs regime of public procurement;
- Decree n ° 2005/5155 of 30 November 2005 laying down the operating procedures of the Special
Allocation Account for the regulation of public procurement;
- Decree n ° 2001/048 of 23 February 2001 establishing the organization and functioning of the
Public Contracts Regulatory Agency (PCRA)
- Decree amending and supplementing certain clauses of Decree No. 2012/076 of 8 March 2012
on the establishment, organization and functioning of the Public Contracts Regulatory Agency
(PCRA)
- Decree N ° 2012/075 of 8 March 2012 on the organization of Minister of public contract
- Decree establishing the organization and functioning of the Tenders Board.
- Decree 97/049 of 5 March 1997 on the organization and functioning of the Board of budgetary
and financial discipline;
- Decree 97/047 of 5 March 1997 on the organization of services of Supreme State Control;
- Decree 89/913 of 31 May 1989 on the organization of the standing committee on defense
procurement and security;
- The order N°070 / CF / in June 20th, 2003 carrying regulator's delegation of power of the
Managing director of the Agency of Regulation of Procurement contracts;
- The order N°092 / CAB / PM of November 05th, 2002 fixing the allowances of session of the
Presidents, Members and Secretaries Reporters of Special Tender Board
-The order N°093 / CAB / PM of November 05th, 2002 fixing the amounts of the pledge of
submission and the expenses of the file of call for tenders (CAD);
- The order N°032 / CAB / PM of February 28th, 2003 fixing the modalities of application of the
request for quote;
- The order N°111 / CAB / PM of December 24th, 2002 carrying organization and functioning of
the Permanent Secretarial department with Special Tender Board
In effect, this ministry, responsible for the organization and smooth functioning of public
contract, issues call to tender in collaboration with the ministries and structures
concerned, awards contracts and controls the execution on the ground, takes part,
where necessary, in financial preparation of projects, subject of public contracts.
Procurement planning is a necessary condition to ensure proper use of funds,
transparency procedures and compliance. Conclusions of studies carried out in the
domain of public contracts indicate the existence of a programming journal of contracts
as the source of the numerous cases of breaches of regulations, low consumption of
investment credits and poor quality of executed services as well as the lack of readability
of the whole process.
After the previous four editions jointly organized by the public contract regulatory Agency
(PCRA) and the Ministry of Economy, planning and Regional Development
(MINEP/ESPPT) the 2012 programming Conferences were effectively organized from 21
to 24 February 2012 all over the national territory3
.
3
MINPC file
4
Figure-1: Overview of Tasks Required by the Project and Procurement Planning4
Programming of public contracts aims at:
- A consumption of all budgeted or delegated credits through the award of all
programmed projects
- Transparency of procedures through wide communication and respect of
programming
- Respect of the rules and procedures in force
- Avoiding abusive recourse to the exceptional procedure of mutual agreement
- Mastery of deadlines in the award of contracts and running costs of tenders
Boards
- Preparation of a control panel, aid tool or precious guide for all public contracts
actors.
In this context budgetary conferences5
are one of the greatest moments of administrative
life. They offer a particularly important and delicate framework not only for the arbitration
of all project to be included in the state budget, but they specially give the opportunity to
ministries and other government departments to express their priorities in compliance
with the development policy. It is actually during the said conferences that the budgetary
allocations which would be necessary for the running of the nation for the next 12 months
are made.
The quality of the execution of public expenditure largely depends on the content that is
given to these budgetary conferences. The global objective is to select and include in the
state budget, sufficiently mature projects in order to bring about growth. In other words, it
is a question of rationalizing the budget choices in order to attain efficiency so that
expenditure should henceforth effectively contribute to the attainment of development
goals. In a more precise manner, budgetary conferences permit us to make the choice of
the projects to be retained for financing more rigorous and objective. It is the ultimate
step in appraising the degree of maturity of the project.
In general, the principal phases of the budgetary conferences are based on the following
points:
4
smartcardalliance.org
5
Passage guide at the public investment budgetary conferences copyright by MINEPAT
5
- Presentation of the state of execution of the budget of the current financial year
while laying emphasis on the hindrances to its proper execution;
- Expression of the budgetary needs for the next financial year;
- Presentation of justifications of the proposed;
- Projects.
1.2.The Research Question
Recognizing this longstanding problem of procurement process and its direct relationship
to attain efficiency in public investment expenditure, it is better to respond to these
specifics questions:
1. How do the procedures of markets influence negatively the efficient execution of
the PIB?
2. Within the framework of the execution of the PIB, what impact the multiplicity of
the actors can have on the good consumption of the credits of investment?
In fact, analyze the behavior of the pace of expenditure in connection with the execution
of investment projects in order to develop a better approach to optimize the efficiency of
public expenditure in relation to the new orientation results-based budgetary.
The sketches of answers to these questions will be organized in the general framework
of the objectives pursued in connection with the hypotheses of research formulated
afterward.
1.3.Objective of the Study
The general objective of this study is to show that the process of execution of the public
spending dedicated to the investment does not allow reaching the objectives of
performance of the administration regarding consumption of the credits of investment.
This general objective is pursued through the following specific objectives:
1. Analyze the process of procurement contracts in connection with the execution of
the PIB;
2. Measure the impact of the actors of the chain of consumption of the credits of
investment on the good execution of the PIB.
Within the framework of this work, the hypotheses of are:
Hypothesis 1: the long procedures of procurement public have a negative effect on the
good consumption of the credits of public investment
Hypothesis 2: the multiplicity of the actors of the chain of consumption of the BEEP has
a negative effect on the good execution of the projects of public investment
1.4.Significant of the Study
The system of procurement contracts appears as the instrument which allows the
processing of the financial potential (budget) of a country into infrastructures and social
equipments (roads, schools, hospitals). By this fact, it is considered as an essential
vector against poverty and as means important for the improvement of the populations
living conditions.
6
In Cameroon, the volume of markets on the basis of the information available on the
PCRA represents 2010, 661,2 billion of FCFA for 5461 contracts and in 2011 (on
31/10/2011) 490,2 billion FCFA for 3774 contracts, whereas in 2012, the PIB represents
28,30 % of the Budget. A trend which if it is maintained in the next years, according to the
persons in charge of the MINEPAT, the 30 % cape, aimed in the GESP should be
reached from 2013.
The interest of such a study can be appreciated at various levels. The approach by
quarterly observations of the level of consumption of the credits of investment states the
opportunity and the impact of choices by projects hired on the global objective of the new
economic policy which will be implemented in 2013 with the effective application of the
Budget-program; an approach tending to organize better the programming of the supply
of the State in goods and services
An approach which aims at endowing the contents of the process of procurement
contracts in Cameroon of sensible additional elements to strengthen the current
dynamics of consumption of the credits of investment by a better organization of the
actors of the chain of the spending expense and an adjustment of the procedures.
After all, the aforementioned study focuses on the reform of the public policies regarding
efficiency of the public spending; in particular the expenses were dedicated to the
investment sector for a better appreciation of the level of realization of the projects on
outside and internal resources. Of more the method of Box and Jenkins about the
chronological series highlights the factors which influence significantly the consumption
of the credits of investment in an optics forecaster to anticipate Ex-ante factors of
disturbance or incentive in the optimality of the execution of the PIB.
1.5.Limitations
Within the framework of these works, it is important to raise certain observations:
• At first, it would be necessary to notice that the data observed on the evolution of
the rate of the PIB every 03 months were not still produced by the statistical
departments, in this particular case the rate of the PIB for year 2012 considering
the fact when the consumption of the PIB becomes generally considerable from
the second quarter of the year of the exercise and reports are produced at the end
of exercise. It is the reason for which, in the optics to make more significant our
data, it seemed convenient to exploit data from 2003 to 2011.
• Besides, in view of the fact that the secondary concerning data the rate of
execution of the PIB appears in cumulative value of successive quarter at the
other one, it was agreed to make more relevant our empirical results to proceed to
a centering of these variables by considering that if the variable X represents the
rate of execution of the PIB to the first quarter and Xt+1 successive rate
accumulated for the next quarter, then the real value of the successive rate will be
X * = ( Xt+1) - ( Xt); what allows to a certain extent to eliminate the effect of the
colinearity of variables to be explained.
2.0 Methodology
2.1 Introduction
The used methodological frame allows placing the context of the study as well as the
explanatory factors of the phenomenon bound to the spending, the participants and the
7
approaches related to the processing of the problem. Thus, the purpose of this chapter is
to indicate what actually is done so that to evaluate the design procedure and findings of
the study.
2.2 Explanation of the things happened-the way it happened
The recurring problem of the low consumption of the credits of investment, while
Cameroon fell on a trajectory of two-digit growth for in terms on the horizon 2035 to
become an emerging country, raises questioning and analyses on the explanatory factors
of this state of thing.
So, studies were led by the MINEPAT, the concerned ministerial departments, the PCRA
and today the MINPC on this problem; the relevant results which were come from these
studies did not still allow stopping this insufficiency.
To redraw the behavior of the curve of spending of public investment to better seize the
problem, we opted for an analysis of the statistics on procurement contracts resulting
from the PCRA and the quantitative data observed quarterly on the evolution of the BIP
to make more significant the explanatory factors of the rate of execution of the public
purchases and thus formulate an additional approach of the process of procurement
contracts.
2.2.1 Persons concerned
The low consumption of the BIP concerns the various actors of the chain of the spending
dedicated to the investment, in this particular case: the regulators, the controllers, the
public accountants, the public and private economic actors involved in the process of the
procurement contracts and the citizens which expect for the impact from it at the level of
their purchasing power.
2.2.2 Results expected
As we are going to see it, the quality of the spending is influenced in phase of
programming, signing and execution of markets; so, the improvement of the efficiency of
the procedures of the State’s supply in public goods and services favors the creation of
positive externalities in the economy.
2.2.3 Trends of solutions
Surrounding areas of solutions concern:
1. The anticipation and the pressure widely taken into account within the
framework of the participation and the collaboration of the actors of the chain
of spending at the conferences of programming;
2. The improvement of the communication and the training of the participants
in the process of planning and execution of the projects of markets;
3. The dematerialization of the procedures by the development and the use
of the computing software of programming and follow-up of the projects
registered on the PIB.
8
2.2.4 Approach to data
The data exploited within the framework of this study concern the quarterly observations
accumulated by the rate of execution of the PIB from 2003 till 2011, as well as the
statistics on the signing, the execution and control of procurement contracts over the
period 2004-2011.
Besides, the guide of elaborate interview allows accentuating more particularly the data
on the vision and the impact of the actors of the chain of consumption of the credits of
investment as well as their behavior throughout the process.
2.3 Review of Data Collection Methods
2.3.1 Explanation of the data collection methods chose the best suited to fit
the research question
The method of data collection is based at first on the exploitation of the essential
secondary data of the evolution of the PIB emanating from the newspaper of the
projects of government services and from annual physico-financial reports strengthened
by the technical departments of the MINEPAT, as well as the statistics on markets from
2004 till 2011 were supplied by the PCRA.
These data collection method6
was chosen because it provides the raw description of the
topic, also by using tools such as interview to enhance more information about the
different actor’s perception of the procurement process and recommendation on how to
improve effectiveness of budgetary consumption.
2.3.1.1 Secondary Data
2.3.1.1.1 Secondary data used
The data necessary for our estimations arise from statistical offices and from reports of
physico-financial execution of the public capital budget published by the MINEPAT over
the period 2003-2011, as well as from statistics on markets from 2004 till 2011 edited by
PCRA.
2.3.1.1.2 The way it feed into the current research
These data are an emanation of field works made by the local committees of follow-up of
the PIB and relieved by government services and strengthened by the technical
departments of the MINEPAT, the MINPC, and the PCRA for the production of report.
So, these secondary data operate by their significance a symmetric inking with the
problem on the level of consumption of the credits of investment. In the sense that the
length of the procedures and the multiplicity of the actors explain the dynamics of the
rhythm of consumption of the PIB.
2.3.1.2 Primary Data
2.3.1.2.1 A detailed description of research conducted and design of the tool
6
Silverman, D. (2006) Interpreting Qualitative Data, 3rd Edition Sage Publications India Pvt ltd, New Delhi.
9
Primary data from a field study conducted with an interview guide7
addressed to those
involved in the procurement process and execution of public contracts.
The primary data consist of an additional insight into the behavior of these actors subject
to various practices and consequences such as: the red tape, favoritism practices, (...)
etc. Thus, there was talk of surrender, where possible, with local committees to monitor
the PIB and officials (CAD) concerned.
Ultimately, the primary data collection was done by an interview guide for committed
individuals to advance targeted because of their involvement or experience in the
budgetary framework and more specifically procurement procedures public.
2.3.1.2.2 Description of fieldwork and specific procedures used
The study concerns the data on the implementation of Ministries’ PIB made up of projects
as well as projects on assigned funds in the decentralized services of the Public
Administration, as of Decentralized Territorial Communities, Settlements and Public
sector companies and Para-public.
Given the national scope of this study, it was discussed in addition to the data mentioned,
crop gathering additional data, by the exploitation of the interview guide.
2.4 Criteria for Sample Selection
2.4.1 Number of total sample
The first sample consists of the execution rate in absolute and relative cumulative PIB
observed at the end of each quarter for each year from 2003 to 2011, considering that
each quarter consists of a statistical unit equal to the rate of execution PIB this period,
we obtain a sample volume of 36 statistics units.
Another more diverse sample statistics for multiple procurement developed by the PCRA
from 2004 to 2011. These statistics relate to the activities of key stakeholders in the
system in this case the Contracting Authorities, Delegated Contracting Authorities and
Tenders Boards.
2.4.2 Characteristics of sample and method of selection
Given the methodology on the econometrics of time series by use of the method of Box
and Jenkins8
to characterize the study sample, we will discuss this method of focusing
the analysis on projections evolution of consumption PIB from the perspective of an
analysis of pre-evaluative program budget which comes into effect in 2013.
7
See Appendix
8
The Box and Jenkins (1970) methodology , named after the statistician George Box and Gwilym Jenkins applies autoregressive
moving average ARMA or ARIMA models to find the best fit of a time series, in order to make forecasts
10
2.5 Pilot Study
2.5.1 To whom was the study administered
This work, developed as a tool for decision support, will improve the government strategy
through a better use of credits for investments in the improvement of the optical everyday
lives.
Furthermore, this work is of a scientific nature, will be useful to researchers and students
be interesting in the field of finance and control and more generally to all actors in the
chain of consumption in Cameroon.
2.5.2 Changes made to the research tool
Generally, studies related in the field of effectiveness of PIB have focused analysis of
cost, namely in this case scientific publications belong to Naegelen and Mougeot9
(1997)
on discrimination in the markets.
In their demonstration, they show that the prohibition of discrimination in public
procurement is not a priori optimal competition policy when the social cost of public
funds, the comparative advantages and distributional goals are taken into account.
Also the article by Marechal and Morand 10
(2002), dedicated to outsourcing and
amendments in the procurement perspective has two different regulations relating to the
temporality of the announcement of the terms of subcontracting.
Following the considerations of the auction formats which solve the problems of adverse
selection and collusion of bidders, the optimal Bayesian’s auction goes beyond putting
the allocation system away from the moral hazard in the implementation phase of the
market.
It is clear that many aspects remain unexplained or unclear, the results of the research
will attempt to clarify some of these issues by pursuing an exploratory approach to the
development of part of the expenditure devoted to investment in 09 years data intra-
annual to shed new light on the relationship discussed in the literature between the
execution rate of BIP and the factors explaining the procurement process.
In particular, it will be through an econometric time series according to Box & Jenkins
methodology to formulate a model to represent a chronicle with the ultimate aim to
predict ex-post changes in the PIB and the necessary adjustments seen better planning
and execution of public contracts.
2.6 Methods of Analysis
2.6.1 Brief explanation on how to analyse the data
To achieve the research, objectives will be adopted methodological approach both
statistical and econometric. This approach uses tools such as charts and graphs, the
9
Mougeot, M. et F. Naegelen (1997), «Marchés publics et théorie économique : un guide de l'acheteur», Revue
d'Economie Politique, vol 107, n°1, p. 3-31.
10
Maréchal, F et P. Morand (2002), «Sous-traitance et avenants dans les marchés publics: une illustration», Revue
d'Economie Politique, Vol 202, n°1, p 103-120.
11
assumptions will be verified using statistical analysis provided by the PCRA and time
series using the method of Box and Jenkins.
The Box & Jenkins methodology is to formulate a model to represent a chronicle with the
ultimate aim to predict future values. This methodology suggests a four-step procedure:
Model Identification
Model estimation
Model validation (diagnostic test)
forecast
a) Model Identification
In this first step, the object is to determine as from the observation of the autocorrelation
functions and partial single family type models ARIMA (p, d, and q)
the appropriate model.
Informal tests include the analysis of moments and plots to detect stationarity11
, but they
are only testing stationarity assumption. Then check these intuitions (informal tests) are
made by the application of formal testing including unit root test of Dickey Fuller12
.
b) Model estimation
This step is to estimate the model appropriate parameters selected.
c) Model validation
Model validation refers to various statistical tests to determine if the specification is
congruent model that is to say it can not be set to default. These statistical tests are to
test the residuals of the model do not precisely estimate the white noise but come close
in other words to be autocorrelated residuals and do not exhibit heteroscedasticity.
d) Forecasting
Forecasting of the sample is not actually part of the study model of Box and Jenkins; it
seemed relevant to incorporate in its purpose as part of the sample studied.
2.6.2 A description of the type of software.
Within the statistical treatment of data, we use SPSS13
because of its exploratory
analyzes and statistical graphics quickly get a description of the data. More specifically,
assess the needs of users (do they meet services to user needs?) Evaluate the quality of
services (users are they satisfied with the services?) Assess the performance of services
(services reach - their objectives?). Similarly, we can associate the graphics smoothing
curves to synthesize information. The models proposed by this software range from
simple regression statistical regression to the most complex to treat panel data, and even
time series processing.
11
Statistical stationarity: A stationary time series is one whose statistical properties such as mean,
variance, autocorrelation, etc. are all constant over time.
12
It is named after the statistician D.A Dickey and W.A. Fuller, who developed the test in 1979
13
SPSS software was created by two students of Stanford University, Norman Nie and Tex Bull (SPSS Inc
Administrators.) for data analysis in social research in the 60s.
12
2.7 Limitations
2.7.1 The limitations of the using of this software for the study
SPSS has three important limitations that need to be aware of:
Users have less control over statistical output than, for example, Stata or Gauss
users. For novice users, this hardly causes a problem.
Has problems with certain types of data manipulations, and it has some built-in
quirks that seem to reflect its early creation. The best known limitation is its weak
lag functions, that is, how it transforms data across cases.
Certain types of analyzes are sometimes problematic to achieve (graphical
longitudinal data contrasts factorial ANOVA codes, etc.).
2.7.2 The way to overcome these limitations
For novice users, this hardly causes a problem. But, once a researcher wants greater
control over the equations or the output, she or he will need to either choose another
package or learn techniques for working around SPSS's limitations
For new users working off standard data sets, this is rarely a problem. But, once a
researcher begins wanting to significantly alter data sets, he or she will have to either
learn a new package or develop greater skills at manipulating SPSS.
Estimating the parameters for the Box-Jenkins models is a quite complicated non-linear
estimation problem. For this reason, the parameter estimation should be left to a high
quality software program that fits Box-Jenkins models. Fortunately, many statistical
software programs now fit Box-Jenkins models.
These techniques require computer software to use. Fortunately, these techniques are
available in many commercial statistical software programs such as SPSS that provide
ARIMA modeling capabilities.
3.0 Literature Review
3.1 Introduction
This stage is a critical review of the existing literature (published and unpublished)
relating to the research question and aim and objectives of the study. In some cases it
will be to discuss about literature review and its relationship to methodology.
3.2 Discussion about literature review
Many studies have been carried out on public procurement. We may mention Naegelen and
Mougeot’s article (1998) on discrimination in public procurement. This article shows that the
prohibition of discrimination in public procurement is not a priori an optimal competition
Policy when the social cost of public funds, the comparative advantages and distributional
goals are taken into account.
It also shows that the traditional argument against preference relating to the lack of
incentives for cost reduction is limited in scope and that the principle of dichotomy, the
attribution rule should remain discriminatory. Also the Marechal and Morand article (2002),
dedicated to outsourcing and amendments in the procurement perspective has two different
regulations relating to the temporality of the announcement of the terms of subcontracting.
13
In addition, In et al. (2002) examined the impact of corruption on the competition in public
procurement. Under the assumption that a corrupt bureaucrat gives a company the
opportunity to readjust its offer in exchange for a bribe.
They lead to the following result:
- First, corruption negatively affects competition insofar opportunities resubmission granted
by the corrupt bureaucrat encourage bidders to form a price cartel;
- Secondly, the control firms is increased efficiency in this environment, for allowing the
restoration of price competition.
-Third, when the bureaucrat provides additional favors to a company or to the phase of
contract award, or implementation phase, monitoring activities become pests resulting in the
exclusion of certain companies’ allocation process or the execution of public procurement.
3.3 Its relationship to methodology
Developments preferred in the literature review have addressed aspects ranging from cost
analysis on discrimination in public procurement, the question of comparative advantages,
reflections devoted to subcontracting and amendments in the procurement. A consideration
on the auction formats which solve the problems of adverse selection and collusion of
bidders.
The methodological framework will in addition to assessing the impact of these policies on
the expected total cost of the market and the probability of obtaining a negative ex-post
profit of the contractor, to clarify some these aspects pursuing an exploratory approach to
the development of part of the expenditure devoted to investment in 09 years in intra-annual
data.
This approach will shed new light on the relationship discussed in the literature between the
execution rate of PIB and the factors explaining the procurement process. In particular, it
will be through an econometric time series according to Box & Jenkins methodology to
formulate a model to represent a chronicle with the ultimate aim to predict ex-post changes
in the PIB and necessary adjustments related.
Therefore, the researcher will model the problem studied on the behavior of the curve of
spending devoted to investment by the constitution consists of a time series based on its
past and present values to determine the appropriate process.
That is highlight of the explanatory variables on the level of consumption of the BIP to
capture the significant variables and to derive policy recommendations on the strategy for
better planning and execution of public contracts. And from reports on the effectiveness
of the public procurement system published by the ARMP, to analyze the dynamics
annual prevails.
4.0 Theoretical Framework
4.1 Introduction
Public procurement is a means by which the state and its subdivisions carry out work or
studies and acquire goods and services. Economic theory is developed analyzes to
better understand the variation in the level of consumption rate investment credits.
14
4.2 Public procurement system
The procurement system appears to be the instrument that allows the transformation of a
country's financial potential in infrastructure and social facilities (roads, schools,
hospitals...).
Thus, it is considered an essential tool for fighting against poverty and as an important
means for improving the living conditions and wellbeing.
In Cameroon, the amount of contracts awarded14
in 2010, 661.2 billion FCFA for 5461
contracts and 2011 (31/10/2011) 490, 2 billion FCFA for 3774 contracts. The state
budget for 2010 allocated to public investment represents 26.65% of the overall envelope
equal to 2570 billion FCFA, for the year 2011, the public investment budget is 26 46% out
of a total of 2571 billion CFA francs and 28.30% of a total of 2800 billion FCFA in 2012.
A trend that if continued in the following years, according to officials of MINEPAT, the
rate of 30% referred to in the GESP, to be achieved by 2013.
Figure-2: Amount of Contracts and amendments (billion FCFA) from 2006 to 2011
Sources: PCRA files
Therefore it appears that the economic and social development of a country is largely
dependent on the effectiveness and integrity of the procurement system.
4.3 Analysis of public procurement according to economic theory
Procurement is part of an economic logic indirectly related to the needs of populations.
Of the politico-economic procurement vision, it will be presented economic analyzes that
govern the process.
4.3.1 Procurement and economic Policy
4.3.1.1 Public Purchasing and economic Policy
Public Purchasing represent a considerable amount of funds in the state budget (490.2
billion CFAF 3,774 contracts in 2011). Several sectors of the economy depend largely on
these purchases.
• determining a right Price
In general, so far, the determination of right market price is based on public competition.
Given the reduction or elimination of public competition process occurred gradually with
14
on the basis of information available in PCRA
15
OTC and tender, particularly in certain sectors such as: electrical equipment, aerospace,
railway equipment, telecommunications, prices are not always objective.
Aside from the limited foreign competition, there are two possibilities:
- The negotiating skills of the public purchaser;
- The information and surveys on costs, prices and cost of providers
• Action on public procurement sectors of economic activity
Can Procurement policy be an instrument of industrial organization and political action on
the sectors of the economy? In fact, the importance of public procurement in some areas
leaves no choice.
Purchases can not have an effect on industrial structures. In both cases, the role and
responsibility of the purchaser public than those of a simple traditional buyer only
concerned to get the work and supplies.
4.3.1.2 Elaboration of a public procurement policy
But there are still major concerns for the general interest which are not met by the
principles contained in the legislation on public procurement. These include concerns
which tend to link procurement policies to economic policy.
In fact, the weight of procurement is such that in some areas, it is very urgent and
important to assess their economic impact and how these sectors which contracts with
the administration respond to these procurement operations.
Hence the urgent need to implement ways to integrate public procurement policy in a
political sense of the fact that there is indeed a contradiction between the administrative
and legal framework of public procurement and economic concerns of the state.
This is particularly true of the difficulties there's savings to maximum, that is to say, to
obtain better prices suppliers. This objective can only be achieved on the basis of large
orders for the implementation of series or orders corresponding to a small number of
uniform types.
It is necessary that an effort be accomplished in terms of economic data, the level of
procurement authority by implementing processes census studies to assess the
economic impact of public procurement.
4.3.1.3 Public purchases and the economic situation
This problem can not be dissociated from the variation of the budget depending on the
situation. But in practice, the complexity of the problem is obvious:
- The multiplier effects of government spending
- The economic impact of public spending
- The time between the decision to buy and execution of the order.
Difficulties and Avatar of political control costs in terms of stabilizing public expenditure 15
15
Laffont, J. J. ET J. Tirole (1993), A Theory of incentives in Procurement and Regulation, MIT Press, Cambridge.
16
4.3.2Economic analyzes that govern the process
Despite their importance in the State budget, procurement was not a priority for economic
analysis. But with the development of reflections on the topic including auction theory and
incentive contracts, a rigorous analysis of procurement of goods taken by the state body
in the body of economic research methodology.
Thus, the relative efficiency of the call for competition and negotiation in public
procurement, it will issue highlighting agreements and capture in public procurement.
4.3.2.1 Opening to competition and negotiation in public procurement
A comparison between the call for competition and negotiation will lead to the
presentation of different competitive procedures for awarding public contracts.
4.3.2.1.1 Comparison between the call for competition and negotiation
The competition means the formal procedures of the common law relating to bidding and
restricted. While trading refers to informal procedures characters called derogations or
markets traded OTC.
Work on the call for competition was conducted in 1997 by Mougeot and Naegelen. This
work, it is considered the purchase of an indivisible goods by a purchaser neutral vis-à-vis
the risk facing potential sellers who are neutral vis-à-vis the risk.
In this context symmetrical, they admit that the costs of all enterprises are distributed
according to the same law of distribution function and density function of the common
knowledge of the buyer and suppliers.
At first sight, the buyer does not know the company competitive and must therefore seek a
rule of contract award and payment that results in retaining the company with the lowest
cost and reduce the rent it can be attributed due to information asymmetry.
This in conditions such that when the bidders select their strategy, they do not know if their
bid wins, the purchaser selects a rule that reduces disability informational. This is the
specific auction procedures characterizing the call for competition in public procurement.
Figure-3: reason for chosing negotiation
Source: survey
Indeed, the use of a call for tenders depends on the comparison between the cost of
organization (need specific personnel, the establishment of ad hoc committees,
17
dissemination of information etc..) and the gain associated with it; either ex-ante, the
difference between the expected cost and the second highest cost.
If this difference is small (low cost differentiation in the sector concerned), the gain
associated with the consultation of an additional supplier is low and may be lower than the
cost of the procedure. Therefore, they recommend the use of negotiation with one company
when the cost of the call for tenders procedure is higher than the expected gain from the
competition.
Indeed, the structure of supply is in some cases an exogenous variable (when barriers to
entry result from the nature of production processes, the evolution of markets or legal
specifications) and in others an endogenous variable (consequence of the choice of the
quality of goods or practices favoritism).
The buyer is not neutral in this regard may have chosen to deal with a monopoly which
refers to the possibility of a coalition with the supplier. Even if the legislation does not take
into account the endogeneity of the market structure.
They planned markets called "negotiated" in the case where only a summary competition
can be organized (in the case of research, call for expression of interest and tests,
emergency, Construction work or secrets relating to National Defence, in the case of
monopoly legal or space, if unsuccessful market) or impossibility of competition (in the case
of legal monopoly of asset specificity, project type, extension).
Similarly Bajari, P., R. Mc Millan ET S.Tadelis.16
(2003) propose a framework for
comparison between auctions and negotiations starting construction contracts to private
implications for procurement works.
Their main conclusion is that the more complex projects with an anticipation of
endorsements, more negotiation is needed, while auctions are effective for simple projects.
Indeed, in the auction, bids are often the only information held by the public purchaser.
Whereas in the negotiation, the buyer and the supplier to discuss all aspects of the project
before signing the contract.
The importance of communication and coordination between the buyer and the supplier in
complex therefore provides an alternative explanation for the correlation between the
complexity of a construction project and the use of OTC.
After briefly the different contexts in which are relatively effective the call for competition and
negotiation, we will now discuss the different procedures or competitive bidding.
4.3.2.1.2 Competitive procedures for awarding public contracts
Since the pioneering work of Vickrey17
, theorists distinguish four main types of auction
(bidding in the first price tender Vickrey auction down hollandaise and English ascending
auction) can be grouped into two families procedures auction:
16
Bajari, P., R. McMillan ET S. Tadelis (2003), «Auctions versus Negotiations in Procurement: An Empirical
Analysis».NBER Working Paper n° 9757.
17
William VICKREY brought the auction description in terms of game theory in 1961.
18
- Procedures for first-price auction in which the contract is awarded to the lowest
bidder,
- Procedures for second-price auction in which the contract is awarded to the
lowest bidder who is, however, paid the second lowest price.
The bid first price auction and down within the first hollandaise family while ascending
English auction and call for tenders for are the Vickrey second.
Therefore, this section will focus on the comparison between these two types of
procedure. This will be done in two different settings, depending on the symmetry and
asymmetry of suppliers.
a) Comparison in a symmetric framework
Such a comparison procedures auction was made by Mougeot and Naegelen (1997), first
under the assumption of neutrality vis-à-vis risk and absence of transaction costs, and other
under the assumption of hostility risk suppliers.
• Assumption of neutrality towards risk and the absence of transaction costs
Referring to Vickrey, the expected profit is independent strategies when agents use their
optimal strategy. They conclude, therefore, that if the contract is awarded to the lowest
bidder, all procedures provide the same benefit to the winner and therefore the same
discounted price for the buyer.
In call for tenders in the first price, the submission of each company is equal to the sum of
the cost and a "mark-up" strategy where each adopts a strategy Bayes-Nash symmetric.
Strategy increasing and decreasing at a point in another, being chosen by the winner, then
the buyer pays the lowest cost increased by annuity that appropriates the company due to
information asymmetry.
Buyer pays so hope this average cost. However, given the fact that the second-price
auction is revealing in dominant strategies, the outcome of the bidding in the first price in
expectation perfectly equivalent to a second-price procedure.
Under the assumptions stated above, all the procedures leading to the award to the lowest
bidder and ensures zero profit for the company less efficient, are equivalent. They therefore
lead to the same discounted price for the award.
• Hypothesis of hostility to the risk of suppliers
Under the hypothesis that all bidders are risk averse, the equivalence of the discounted
price is not verified. This can indeed be understood intuitively. Procedures in second price,
the optimal strategy is always to announce its true cost, firms are neutral or not.
In contrast, in the first call for tenders prices, arbitration between maximizing profit when you
win and that the probability of winning is changed so that the "mark up" is reduced to
increase it.
The price offered when all bidders are risk averse is lower than the price offered in case of
neutrality. As a result, the winner's prize is lower on average than the winner of the call for
tenders second price, which is equal to the price in case of neutrality.
19
Therefore, if the buyer is not known whether the providers are all neutral or risk-averse, he
had better choose the first call for tenders price which gives a result equivalent or better.
When all suppliers are characterized by the same attitude vis-à-vis the risk that the rent that
company appropriates due to information asymmetry decreases when the degree of risk
aversion increases. As a result, the supply of each agent decreases and therefore the
expectation of the purchase price: the more suppliers are risk averse, the higher the price
paid by the government is low.
This factor is particularly important that the companies concerned depend on public
procurement for a large part of their Sales.
b) Comparison in an asymmetric Framework
The symmetry assumption implies that so far adopted all suppliers is as homogeneous as
regards the allocation of costs that a priori attitude vis-à-vis the risk.
But the heterogeneity of agents is common. Regarding costs, the disparity of opportunity
costs, the use of different production techniques, the location or size of business factors that
could cause differences a priori beliefs about the costs.
These factors are also likely to lead to different attitudes vis-à-vis risk, firms with few
controls showing, for example, more aversion vis-à-vis risk than those whose capacities are
saturated. What becomes of the strategies highlighted when firms are heterogeneous a
priori?
As regards the cost asymmetries, Griesmer, J. H., R.E. Levitan and M. Shubik. (1967)18
,
Maskin, E. S. and J.G. Riley (1986)19
, have revealed a complex set of results. On the one
hand, the equivalence theorem of discounted price is disabled. On the other hand, the
system of differential equations characterizing optimal strategies has no general analytical
solution.
For the differentiation of the attitude vis-à-vis risk work of Cox and al. (1982 Mougeot, M. et
F. Naegelen (1991)20
showed similar effects: no general analytical solution of differential
equations, the equivalence theorem invalidation cost, differentiation strategies depending on
the degree of risk aversion vis-à-vis the risk.
The heterogeneity of providers limits the previous result when different agents are treated
the same way. The buyer may however use this heterogeneity to his advantage by adapting
the allocation rule.
In addition, Eklöf (2003)21
highlighted the social costs of an inefficient allocation of markets
through the process of call for tenders in the first price in the presence of asymmetric
18
Griesmer, J. H., R.E. Levitan and M. Shubik (1967), «Toward a Study of Bidding Processes. Part IV, Games with
unknown Costs», Naval Research Logistic Quarterly, Vol 14, n°4, p. 415-433.
19
Maskin, E. S. and J.G. Riley (1986), «Asymetric Auctions», Working Paper, University of California-Los Angeles.
20
Mougeot, M. et F. Naegelen (1991), «Duopole de Bertrand, asymétrie d'information et bien être collectif», Revue
Economique, Vol 42, n°6, p 1027-1046.
21
Eklöf, M. (2003), «Assessing Social Coasts of Inefficient Procurement Design», Working Paper Series, Uppsale
University, Department of Economics.
20
agents. This asymmetry implies that the first call for tenders price is based adverse
selection observed during the execution. According to this author, this is inefficient and
social costs are not negligible. Therefore recommends to the purchaser, the use of second-
price auction, which remains effective in such circumstances.
After highlighting of the relative efficiency of the call for competition, negotiation and
different call for tenders procedures, it is important to analyze the phenomenon of
recurrence in collusion with the undeniable Public Procurement.
4.3.2.2 Capture and agreements in public procurement
The existence of cartels and capture in public procurement seems to be public
knowledge. There are two types of collusion or two forms of cooperation in a game
theoretical uncooperative.
4.3.2.2.1 Cartels in public procurement allocation
Collusion22
refers generally the behavior of companies entering into agreements or work
together to make decisions in markets, often on their pricing, intending to limit or impede
free competition in these markets.
The market then leads to high prices and a misallocation of resources in terms of
efficiency that is to say in terms of a criterion evaluating the needs of society as a whole.
It is not simply a failed-transfer from consumers to companies, but a situation in which all
stakeholders could benefit from a different allocation of resources. Cartels represent a
cost to society and a social inefficiency.
According to Hendricks and Porter (1989), the existence of a cartel or collusion can take
many forms and occurs mainly in repeated bids: Winners rotation associated with bids of
ghosts equalities, bids abnormally high ... etc.
The detection of these agreements is difficult because the observed phenomenon may
be attributed to other explanatory factors such as the existence of diminishing returns or
limited capacity. It is therefore a difficult problem both from a practical standpoint that the
theoretical point of view.
However, we can find an econometric analysis of the problem in Porter and Zona (1993).
Rare literature has favored the explanation of the internal workings of the agreement
(supply determines that each member file, choose the winner of the call for tenders
among cartel members, determine how the surplus obtained by the coalition will be
shared).
McAfee and MacMillan23
(1992) have highlighted mechanisms coalition optimal in the
case of symmetric bidders. These works, even if they have the highlighting of the role of
reserve price as deterrent agreements, however, has a limited practical because they are
mainly second-price auction.
22
Collusion is a phenomenon that distort the optimal price and where some players agree not to exceed bid and
overbid («Auction Theory: A Guide to the Literature », p. 25-26).
23
Mc Afee, R. P. et J. McMillan (1992),«Bidding Rings», American Economic Review, Vol 82, p. 579-599.
21
In addition, the public purchaser has several ways to make unstable coalitions reducing
the opportunities for cartel members to detect non-cooperative behavior and reducing the
leeway of the cartel.
Mougeot and for Naegelen (1997), with the aim of reducing the agreements, the buyer
may reduce the possibility of collective manipulation by setting a reserve price or become
unstable cartels opening markets to competition, reducing the time response by
modifying the list of firms consulted by limiting the information provided on the ex-post
market outcome.
4.3.2.2.2 The capture in public procurement allocation
• Capture into the award of contracts
In a public contract, bidders are not the only actors. One or more agents representing the
public entity is in charge of organizing the market, choose the award procedure followed
to select qualitative criteria and their relative weights for judging a bid multi, grant
additional time to respond to the tender invalidate the result of a call for tenders or
authorize bidders to change their bids etc..
These public employees are involved in the process and play an active role due to their
discretion. Capture or corruption is therefore a coalition between the buyer and one or
more suppliers. Mougeot and Naegelen (1997) distinguish three main forms:
- The payment of benefits fictitious or "bribe" by all participants equates to a cost of
participation raises the price by an amount greater than the bribe;
- The award of the contract to the lowest bidder who actually receives ex-post
higher prices as a result of an amendment which compensates the side payment to the
buyer;
- The allocation according to economically most advantageous offer based on a
subjective preference.
For them the discretionary power enjoyed by the buyer is usually sufficient for the
emergence of favoritism. Thus we can not fight against it by reducing this power.
Reduction retaliatory power justifies the payment of bribes by all suppliers, limiting the
possibilities of endorsements, reducing the possibility of preferential selection of quality.
However, they are aware that this reduction can have perverse effects (reduction of the
number of competitors, for example) and it is impossible to define a general rule.
For Caillaud (2001)24
, public officials, like all economic agents react to their own
motivations, such as ethical or moral priorities, or imposed on them by their socio-
economic environment, such as those relating to their administrative career professional
or political.
Indeed, the public official can be influenced by the prospect of a career, future contracts
or other legal or financial compensation, and diverting the procedure for the benefit of the
company that can provide him such prospects.
24
Caillaud, B. (2001), «Ententes et capture dans l'attribution des marchés publics»,
Document de Travail, CERAS-ENPC.
22
The personal relation and various psychological factors involved in the careers of these
agents are also sources of lack of objectivity. There can therefore be no analysis
procedures for awarding public contracts without taking into account the risk of capture.
In addition, the author indicates that this side of distortion in the choice of agents due to
multiple incentives to which they are subject, there are also forms of fraud where a
capture agent turn away public proceedings in exchange for favors such as illegal travel
services for private, bribes, kickbacks, secret financing activities or political campaigns
etc..
Moreover, the author distinguishes capture by a bidder that several bidders. First capture
the public official by a bidder will generally result in a bias in the allocation of markets or a
situation generally referred to favoritism. The terms of the allocations themselves can be
altered so that it takes place at a more advantageous price for the bidder or as technical
specifications or less trade restrictive.
As for the capture a set of bidders, the goal is for them to organize and coordinate an
agreement between them through the official. The capture and agreements are
inseparable and then feed each other.
The consequences of capture are very similar to those of collusion among bidders. In
case of capture, especially of favoritism, the contract award is diverted for the benefit of
bidder who can offer attractive consideration to the Civil servant, a criterion unrelated to
the fact that the company has for example the lowest cost or offer the most efficient.
The inefficiency will be the rule in capture situations. The capture also led to price
manipulation of public procurement to the benefit of the company that carries so at the
expense of public finances.
• Capture in the performance of contracts
Capture or corruption is here, the collusion of the contractor and the company for the
successful operation of the principal that is to say the State. As reference work, we will
rely exclusively on one of Meleu 25
(1998).
Meleu focused on corruption in public procurement in the context of a model of principal-
supervisor-agent. For him, basically capture results from the combination of two
assumptions:
The first is the information asymmetry between the principal and supervisor or
agent
The second is the divergence of objectives or interests between the principal and
the supervisor.
Indeed, the discretion available to the supervisor combined with his private interests is
the cause of capture. For example, "In terms of road surface contracts, the parties may
agree to the thickness of the shape of road.
25
Meleu, M. (1998), Asymétrie d'information et contrôle de la corruption dans la gestion
de développement, Thèse pour le Doctorat d'Etat en Sciences Economiques, Université d'Abidjan Cocody.
23
The civil engineer of the Ministry supervising the work, after finding that the company
undertaking the project has not met the standard thickness agreed, has the ability to hide
this information to the Department. It happens to make some policy elements fight
against corruption. These are:
The quashing of monopoly in the provision of public services,
Reducing the margin of discretion of state officials, accountability,
Dissemination of information to increase the likelihood of detecting the capture,
Creation a system of reward and punishment, the moralization of public
management.
Thus, the use of different types of auctions or agreement must be supported by a
rigorous analysis on factors such as the complexity of the project, the confidentiality of
the project, the number of bidders, their attitude towards risk, the structure of their costs,
reputation etc…
4.4 Dynamics of the process: New rules, joints and innovations
The government circular of March 8, 2012 Clarifies procedures and roles of each
stakeholder in the new classification system procurement.
4.4.1 The authority of public contracts
Since the reorganization of the Government on 9 December 2011, the Ministry for the
Presidency of the Republic in charge of Procurement is in control of this area in place of
the Prime Ministry ensured that before the role of Public contracts Authority.
However, the architectural of the stages of procurement process remains little changed.
Otherwise some adjustments for steering the mastery of large works now delegated to
MINMAP, as well as the monitoring and control of the entire process.
Table-1 : Steps of the call for tenders procedure
N° Restricted Invitation to Tender Open Invitation to Tender reference Code
1 Beginning pre-qualification - Art. 12
2 Notice to candidates - Art. 12
3 Report of prequalification by the CA or CAD - Art. 12
4 Finalisation of IT document
Preparation and completion of the
IT document
Art. 17, 18, 19
5 transmission of IT document to TB
Transmission of IT document to
TB
Art. 124
6 Signature of the IT Art. 111
7 Publication of invitation to tender in the procurement newspaper Art. 20
8 Preparation of bids by bidders Art. 21
9 Submission of the offers to the CA or CAD Art. 24
10 Opening - Processing
Art. 24, 25, 26,
125
11 Constitution of the Subcommittee of analysis Art. 125
12 Preservation of original tender by the President of the TB Art. 125
13 Transmission at PCRA of a copy of each tender (72 hours)
14 Receipt of the analysis report by the TB Art. 27, 124
24
15 Award proposal
Art. 8, 32, 33, 33,
35, 37
16 Signature of the award decision Art.
17
Publication of the award decision and the outcome of the IT in the procurement
newspaper
Art. 33, 119
18 Notification of the decision to the successful tenderer Art. 33
19 Drafting of the proposed contract by CA or CAD Art. 55, 56, 57
20 Transmission of file to TB Art. 124
21 Signature of the contract by the CA or CAD Art. 38, 11
22 Notification of the contract Art. 58
23 Registration of contract by the tenderer
24 Notification of the order of service to start
Table-2 : Steps of the OTC procedure
N° OTC Reference Code
1 Solicitation of Procurement Authority for approval of OTC Art. 28, 127
2 Consideration and response of the procurement Authority Art. 127
3 Preparation of the consultation file Art. 128
4 Consultation of at least three candidates Art. 127
5 Transmission of file to TB Art. 128
6 Award proposal to TB Art. 128
7 Award by the CA or CAD Art. 32, 33
8 Signature of the award decision Art. 33
9 Publication of the award decision in the procurement newspaper Art. 33
10 Notification of the decision to the successful tenderer Art. 33
11 Drafting of the proposed contract by CA or CAD Art. 55, 56, 57
12 Transmission of file to TB Art. 124
13 Signature of the contract by the CA or CAD Art. 38, 111
14 Notification of the contract Art. 58
15 Registration of contract by the tenderer
16 Notification of the order of service to start
Sources: PCRA
The reform introduced by Presidential Decree of 9 December 2011 organizing the
government 26
provides that: "The Minister in charge of Public contract is responsible for
the organization and functioning of public procurement. In this regard:
- It launches calls for tender for public procurement in conjunction with the
ministerial departments and administrations;
- Perform the procurement and execution control field in conjunction with the
ministerial departments and administrations;
- Participates, if any, the arrangement of finance of the procurement in connection
with public ministerial departments and administrations.
This ministry is also the arbiter of conflicts between Tender board and contracting
authorities. Just as it is the use of aggrieved bidders. The Public Contracts Regulatory
26
Decree N°2011/408 of 09 December 2011 on the organization of government
25
Agency remains as her body technical support. "It serves to strengthen the capacity of all
stakeholders."
4.4.2 Accountability in procurement
Including the new circular contained in the decrees organizing the government and the
Ministry of Public contract lists exhaustively the authorities and officials entitled to issue
invitations to tender and sign the procurement.
It is the minister in charge of public procurement, and the heads of government
departments and other public authorities; directors of institutions and public or semi-
public, regional delegates of Procurement, the Chief Executives of local authorities
decentralized and project managers.
4.4.3 Competence thresholds
The Minister for the Presidency of the Republic in charge of public contract awards
jurisdictional thresholds under the central Tender board, as well as central services
departments when the envelope of the transaction is $ 50 million F or more.
Between 5 million and less than F 50 million, Ministers and heads of government are
empowered to award a contract. In the region, the delegates of the Ministry of Public
contract is responsible for procurement of funds delegated to decentralized regional
government in varying amounts between 5 million F without exceeding 50 million F.
Distribution continues for departmental delegates. It extends to general managers and
directors of public and parapublic heads of executive decentralized territorial
communities and project managers.
The distinction is made in the latter group between the infrastructure, services and
intellectual services as well as general supplies. Limitation of powers between 15 and
500 million CFA francs can refer to a higher level markets utmost importance.
4.4.4 The Tenders Boards
There are 05 types of Tenders Board:
- Central Tenders Boards that are placed with the minister in charge of
public procurement;
- The ministerial Tender boards which are competent to assist other
ministers;
- Local Tenders boards which include the regional commissions,
departmental delegates, led by the Public Procurement in the regions and
departments; They can supplement internal commissions that we find now with the
leaders of some of the regional and local authorities, where these latter are not
able to bear the operation.
- The internal Tender board placed with some heads of public institutions
and corporations or quasi however, is supported by the budget of these
institutions;
- Special Tenders Boards will be created by the market authority and
assigned to development projects in need.
26
4.4.5 The rules of delay
The reform aims at reducing overall completion time of procurement. For example, the
contracts committee has a maximum of 21 days from the date of opening of tenders, to
propose allocations of the market. In emergency procedures, the delay is 5 days27
.
4.4.6 OTC, endorsements
Officially, it is recognized that these two practices are at the root of many failures in the
world of public procurement. The OTC market, according to the public procurement
authority, violates the principle of universal free access to public contracts service.
At the same time it eliminates competition guarantor of quality and fair price. Also, the
reform provides for the favor of emergency procedure while being faster (42 days against
45 for the OTC market) preserves competition between bids.
The authority procurement will also be responsible in this regard to ensure the
compliance of potential markets OTC to procurement Code which lists exhaustively the
cases where the client can use.
As for endorsements, officially supervised rate of at most 30% of the contract base, the
fight against the misuse of privilege is preventive competition.
Specifically, the procurement authority fully intends to play the card of quality control
documents of tenders ensuring correct or to take in accordance with relevant ministries
calls with studies sloppy, incomplete or even absent.
4.4.7 Behavior of actors in the system: Defects, abandonment,
fraudulent payments.
On this point, the new rules allow to control the chain studies to achieve and even to pay
benefits. Innovation is the institution of the prior approval issued by the Minister of Public
contract in the request for payment of benefits by the other party.
As noted in the head of this ministry: "We do not want payment beyond, because it would
be a waste of money to the state, or below, because then the company that weaken it
and its partners and especially its employees, by depriving them of a fair price for their
work."
Rejecting the argument that the visa could create bottlenecks and increase the slowness
criticized, the Minister notes that the case must be completed within three days of the
request of the partner state.
4.4.8The brigades of control
It is through audit teams work that the head of Procurement management unit want to
avoid that the "three days" are not a blade that falls regularly on its activities for the
preservation of public resources.
27
References : PCRA files
27
At the Ministry of Public Procurement, there are already 50 controllers in central
services. In each region, delegations should understand at least eight, while each
department will have at least four delegates to regularly evaluate the work of each
procurement
Thus, it is intended to avoid surprises and prepare the decision to grant the visa even
before the applicant has spoken. "Also, controllers should go down unexpectedly to each
phase of the project.
4.4.9Dashboard and strategic monitoring
The keystone of the device, visa required payments is in continuity with the self-
government orders by the new authority on public procurement. Upstream work began
with the holding of the 4th conference programming.
The owners have established the schedule of procurement for the current year. This
calendar includes the deadlines calls for tenders, tenders board session, reception etc.
A database that provides its owner a clear vision on who does what, where, when, for
what purpose (the new circular mentioned above refers to the obligation to include
projects in the public investment budget and corresponding conform to the GESP)
With this forecasting method, the authority of public procurement can also boost before
the laggards and detect critical moments failures and possible abuses.
Grâce à cette méthode prévisionnelle, l’autorité des marchés publics peut aussi relancer
les retardataires et détecter avant les moments critiques les défaillances et dérives
éventuelles.
4.4.10 The issue of procurement season
While recognizing the existence of procurement disconnected with reality social
economic (minimum packages for schools coming in the third quarter (public buildings
and works sector launched to the edge of the rainy season, purchase of agricultural
seeds after sowing, etc.).
The procurement authority believes that the current system will eliminate the
incongruities of the world of public procurement. With national planning synchronized
without being truly centralized. "The meaning of the program is to adapt to any
environment, leaving the owners decision to choose the projects they will work through
public procurement, because they know the environmental constraints while allowing
keep an eye evaluation and monitoring”28
.
4.5 Dynamic of procedures by the multiplicity of actors and factors
explaining the consumption of PIB
Separation of duties of authorizing officer and accountant is the backbone execution
system of public expenditure. This is an absolute rule and rigid which retraces a natural
division of tasks: initiating or authorizing the expenditure of one side and the other one
28
References: Journal of synthesis programming procurement of MINPC
28
who has the responsibility of paying or accounting. These two phases are called
administrative phase and accounting phase.
The modernization of the expenditure circuit in legal terms (institution building for
verification and improvement of the regulatory framework for public procurement with the
adoption of a new procurement code that enhance equality of opportunity for economic
operators), organizational (increasing the number of senior accounting position to ensure
the maximum efficiency of the accounting action), the human capacity (through training
policy actors expenditure circuit).
This section aims to highlight the actors in the chain of expenditure devoted to PIB and
the factors explaining low power consumption.
4.5.1 Dynamics of the process chain of consumption of PIB by the
multiplicity of actors
The expenditure chain consists of two phases:
- The phase known is that of administrative officers;
- The phase known accountant is the responsibility of accounting.
The administrative phase has three stages: commitment, validation and scheduling. The
commitment of expenditure is the act by which a civil servant creates or establishes an
obligation which results in a charge. It must be include a commitment to accountant in
order to reserve the relevant Credit. It is materialized by an order, a contract or
commitment decision expenditures.
Liquidation is to verify the reality of the debt and stop the exact time of the expenditure. It
can be made after complete delivery of the order on the basis of the documentary
evidence of rights acquired by the creditor. The scheduling of expenditure is the act
whereby according to the results of the liquidation, the order is given to the accountant to
pay the expense.
The authorization of the expenditure is prescribed by the authorizing major, secondary, or
their delegates. The principle of separation of powers and functions between the officers
and accountants can be stated in two propositions:
- The duties of authorizing are distinct from those of the accountant.
- The duties of authorizing are incompatible with those of the accountant.
The separation between officers and accounting is essentially justified for the following
reasons29
:
The concern for mutual control;
The division of labor;
The Financial Action unit.
Is authorizing officer income and expenditure, any agent or any person acting on behalf
of a public body to contract, certify, liquidate a debt or order the collection of a debt or the
payment of a debt. There are authorizing officers30
:
- Senior;
- Secondary;
29
Sources : Survey
30
Sources : MINFI files
29
- Delegates;
- Substitutes.
The Contracting authorities are those which receive budgetary approval. Secondary
authorizing officers are those whose approval is delegated. Contracting authority
delegate manage by delegation of authorizing primary or secondary. Authorizing
alternates shall be appointed in advance to perform the duties of authorizing primary,
secondary or delegates when they are absent or prevented.
Is a public accountant, any agent or any person entitled to perform on behalf of the State,
revenue transactions, revenue expenditures or handling of securities either by means of
funds or securities. There are accountants:
- Senior;
- Assistant.
Accountants are those which centralize Assistant accounting operations attached to
them, accountable for their management at the Court of Auditors and the Assistant
accountings are those whose operations are centralized by a Senior Accountant.
At central level, the Director General of Budget, through its competent services, sends all
payment orders. Texts explicitly provide the implementing rules of state spending and
classify the different actors in the chain of expenditure into three groups:
- The actors involved at the stage of commitment and liquidation;
- The actors involved in the stage of scheduling;
- The actors involved at step accounting of budget execution.
- The actors involved at the stage of commitment and liquidation
Here, two actors involved in the chain of expenditure: Credit Administrator and the
Financial Controller.
The credit managers propose spending commitments and prepare the liquidation.
Ministers and heads of institutions of the Republic are administrators of their credit
department. They may delegate their powers to credit managers. The general manager
of the independent amortization fund manages what is related to the expenditure of the
public debt.
The Financial Controller is responsible for ensuring compliance with the regulations for
the execution of expenditure following the Finance Act which sets out the framework.
30
Figure-4: Schematic diagram of preparation of the Annual Finance Act
Source: Built by the author from reports physico-financial of MINEPAT
It has a priori control over all expenditures of the state budget to the phases of
engagement and liquidation. A representative of the Financial Controller is assigned to
each ministry or group of ministries to improve efficiency of case processing revenue
expenses for commitment and liquidation. The credit managers require the
implementation of revenue and expenditure.
Actors involved in the stage of payment mandate
The Minister of Finance is the main authorizing officer of revenue and expenditure of the
state budget. He may delegate his powers to the Minister Delegate in charge of the
Budget or the Director General of the budget with regard to spending on the state budget.
The Director General of the budget is responsible for providing budget and notifies
administrators of credit, financial controllers, accountants, public finance laws, secondary
legislation and subsequent budget acts as they become enforceable. It provides the
authorization of expenditure on the state budget made at the central level.
Those responsible for budgets and special accounts are AOD’s spending on budgets and
the special treasury accounts.
The Chief Authorizing Officer may delegate authorizing officer secondary credits. This
delegation of credits must receive financial controller approval. It is notified to senior
accountant who transmits, if any, to accounting officer. Credit for the decentralized
services of the State, sub-centers are ordering services of the Directorate General of
Budget and are led by a second authorizing officer.
Actors involved in the accounting step of budget execution
The treasurer General is the chief accountant of the general budget of the State. It is
accounting officer for all expenses of the general budget of the state at the central level.
It may, under certain circumstances prescribed by regulation, delegate some of his
powers to other public accounting: assistant accounting officers or secondary.
State required annual
/Department
-Regional Delegation
-National Directorates
MINFI Budgetary
guideline letter
Consolidation /
arbitration in every
department of OB
and PIB
Justification of the budget
proposals by the Ministers to
the NA committees
Presentation / PA of
the draft budget to the
National Assembly
Presentation of
departmental
budgets in Cabinet
member
Vote of the annual
budget law by the
NA
Promulgation of the
annual budget law
Publication of the Finance
act in the ONP and the
Cameroon Tribune
31
In addition, the researcher would like to specify that the bidder is the main actor that
initiates the process of public expenditure upstream and downstream.
4.5.2 The factors explaining the low consumption of PIB
After more than a decade of implementation of the expenditure chain, many challenges
remain and reveal the weaknesses of the system, including:
• Heaviness in the circuit of the expenditure;
• Redundancy of some controls carried out throughout the chain lengthening
processing times records of expenditure;
• The inefficiency to curb expenditure according to cash generating so many still has
to pay over the years.
For several years, there is a significant difference between the appropriations voted
under the financial year and actual consumption at the end of fiscal year. Thus,
consumer credit is almost always inferior since 2003 to the allocation in the initial Finance
Act.
Figure-5: Evolution of annual allocations compared to annual consumption
Source: Built by the author from reports physico-financial of MINEPAT
• An low-consumption which mainly concerns investment credits
• The slow disbursement of grants
The low-consumption of credits can not be dissociated from the slow payment of
subsidies.
In public procurement reports published by the PCRA, it is noted that a delay often
elapses between notification of the grant and actual payment.
• The main reason: the complexity of projects
According to the PCRA, the gap between available funds and credits consumed "is found
in the most part, both in the local fund operative and investment", and is essentially the
complexity of the projects.
• The lateness of conference programming
32
The procurement is a preliminary stage of implementation of the project cycle; Thus the
conclusions of studies in the field of public procurement are the lack of a programming
diary procurement is usually the cause of many cases of breaches of regulation, low
consumption and investment loans approximate the quality of services provided and the
lack of transparency of the process.
• A monitoring and evaluation still perfectible
Credit monitoring and evaluation are always subject to cogitation due to the importance
of their action on the smooth running of the system.
• The long absence of monitoring delegated credits
The monitoring of the utilization of delegated credits in real-time has long been
impossible, the accounting system of prefectures are not directly connected to the control
service of budget, but the budgetary monitoring committees established by MINEPAT
bring encouraging response to this situation.
• the limited assessmentt
An external evaluation of the Public Procurement Authority still perfectible
5.0 Empirical Findings
5.1 Introduction
Joints developed an evaluative analysis concerning the public procurement system
based on statistics collected documents PCRA and an econometric study of the seasonal
variations of the public investment budget observed quarterly over the period from 2003
to 2011.
5.2 Examination and assessment of the system
After the adoption of the Public Procurement Code in September 2004, and activities
related to public procurement system in Cameroon it became necessary to make an
assessment in order to conduct an evaluative study.
5.2.1 The Situation
5.2.1.1 Programming of award of contracts activities
The situation of planning programming paper received by PCRA related to the type of
Contracting Authorities and Delegated Contracting Authority is detailed in the following
chart
33
Figure-6: situation of planning by contracting authority
Source: built from PCRA documents
The observations departments and the masters of works Delegates held in a good
newspaper production programming compared to other state structures, certainly a better
logistics and local information often not available in remote areas.
Although the number of papers produced in 2009 is 16% higher than that of 2008, the
rate compared to active committees is; however, lower than in 2008 when it was 61%.
This decrease results from the fact that some players, including two ministries, 2
Delegated Contracting Authority, 48 PAI, 128 RLA and 3 projects have not programmed
the awarding their contracts.
If all CAD (governors and prefects) submitted their respective newspapers, the most
significant increase recorded in 2010 is of Regional and Local Authorities, with an
increase of approximately 298.1%, representing 287 newspapers against only 72 in
2009.
5.2.1.2 Launched Call for Tenders
Figure-7: Consistency of contracts issued and allotted
Source: built from PCRA documents
The distribution of calls for tenders in 2006 shows that by the contracting Authorities, the
contracting Authorities delegated showed more dynamism
Given the low ratio between the number of contracts awarded in 2007 and the number of
calls for tenders, an analysis was made on the outcome of the proceedings during the
year. It emerges that in 2086 lots (representing 56.5% of the calls for tenders launched in
2007) had not yet been assigned to 31 December 2007. This rate was 46.5% in 2006.
34
Figure-8: comparison between contracting authority
Ministry
PAI
Governor and Prefect
RLA
Head of project
Sources: PCRA
The ratio between the number of contracts awarded and the number of calls for tenders
observed in 2008 and 2009 remains weak, the analysis on the outcome of the
proceedings during this exercise that releases 2244 lots (lot 2306 respectively)
(representing 34.75% and 51.48% of calls for tenders) had not yet been assigned to 31
December 2008 and 2009. This rate was 56.5% in 2007 and 34.75% in 2008.
December 31, 2010, the number of calls for tenders amounted to 4822; a slight increase
of 7.7% over 2009 compared to the same date the following, where the rate is 12, 75%.
The analysis on the outcome of the proceedings during this exercise reveals that 2,752
lots (representing 65.41% of the calls for tenders) had not yet been assigned to 31
December 2011. This rate was 52.82% in 2010.
Tableau-3: Attrition of procedures
years
call for
tender
alloted
Call for
tender
canceled
Call for
tender
unsuccessful
canceled
procurement
Cancellation of
allocation
2007 2086 22 165 20 8
2008 1975 83 206 40 4
2009 2306 41 207 27 9
2010 2547 13 271 30 1
2011 2752 12 200 37 7
Sources: PCRA
The mode of consultation RQ is mainly used for the procurement of smaller supplies and
rehabilitation work of buildings as recommended by the regulations.
In 2008, the Delegated Contracting Authority is the ones who have the most launched
Tenders or 1975 number representing 49.6%. This result from decentralization and to a
lesser extent, their tendency to call for bids for each delegate or credit for projects in the
same locality.
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON
My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY  Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC  PROCUREMENT IN CAMEROON

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My dissertation: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY Subtitle: :IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC PROCUREMENT IN CAMEROON

  • 1. Amity Center for eAmity Center for eAmity Center for eAmity Center for e----Learning (ACeL)Learning (ACeL)Learning (ACeL)Learning (ACeL) TitleTitleTitleTitle: ASSESSMENT OF PUBLIC INVESTMENT BUDGETARY SubtitleSubtitleSubtitleSubtitle:::: IMPROVEMENT OF THE MANAGEMENT STRATEGY OF THE PUBLIC PROCUREMENT IN CAMEROON Student’s nameStudent’s nameStudent’s nameStudent’s name:::: NANG AKONO ACHILLE LEGER A dissertation submitted in partiaA dissertation submitted in partiaA dissertation submitted in partiaA dissertation submitted in partial fulfillment of the requirements ofl fulfillment of the requirements ofl fulfillment of the requirements ofl fulfillment of the requirements of Masters in Finance and ControlMasters in Finance and ControlMasters in Finance and ControlMasters in Finance and Control AAAAt thet thet thet the Amity Center for EAmity Center for EAmity Center for EAmity Center for E----learninglearninglearninglearning Amity University, NoidaAmity University, NoidaAmity University, NoidaAmity University, Noida JanuaryJanuaryJanuaryJanuary 2013201320132013
  • 2. AKNOWLEGEMENTS Researcher would like to take this opportunity to thanks those who have helped him (in every single minute to write this research paper. First of all, researcher would like to thank his family (brothers, sisters and his parents), especially his mother NANG JOSEPHINE and father NANG Gilles Celestin for their courage, strength, financial assistance and advice during the research process; Also researcher would like to extend his grateful thanks to supervisors Mr. Steve MEKA (head of Procurement Management Unit at Ministry of Labor and Social Security) for his support and contribution to this research, and Mr. Aristide NYONGORO (Engineer for statistical Application and Assistant Research Officer at MINEPAT), Mrs. AKAMBA PEGGY ROSELYNE(head of Procurement Management Unit at Ministry of Transport), Mr. TASSOLIMO Fabien(Ministry of Transport) for devoting their time to support this research, their politeness and patency and lastly for their kindness and cooperation. Furthermore, researcher warmly expressed his thanks to all of persons working at Direction of general affairs at the Ministry of Transport, and his lovely girlfriend MAYEMI MBIATA JEANNE CORNEILLE for her advice, politeness and patency. Above all, Researcher would like to thank almighty God justification for his existence. Lastly, Researcher would like to thanks his friends who have encouraged and supported him in one way or another to ensure that he completely successful. Thank you all. NANG AKONO ACHILLE LEGER Yaoundé: 30th December 2012.
  • 3. LIST OF ABBREVIATION C2D Debt Relief and Development Contract CA Contracting Authority DCA Delegated Contracting Authority GESP Growth and Employment Stategy Paper ICC International Chamber of Commerce IT Invitation to Tenders MA Mutual Agreement MINEPAT Ministry of the Economy, Planning and Regional Development MINLSS Ministry of Labour and Social Security MINPC Ministry of Public Contracts MINT Ministry of Transport NGO Non Governmental Organization OIIT Open International Invitation to Tender ONIT Open National Invitation to Tender PCRA Public Contracts Regulatory Agency PE/PSPE Public Establishment/Public and Semi-public Enterprise PIB Public Investment Budget PMU Procurement Management Unit PPA Public Procurement Act PPAA Public Procurement Appeal Authority PPRA Public Procurement Regulatory Authority RIIT Restricted (limited) International Invitation to Tender RLA Regional and Local Authority RNIT Restricted (limited) National Invitation to Tender RQ Request for Quotation STB Special Tenders Board TB Tenders Board GESP growth and employment Strategy Paper CAD Contracting authority delegate OB Operating Budget NA National assembly PA Proposal amendment ONP Official News Paper IAF independent amortization fund PAI Public administrative institution SME small and medium enterprise VSME Very small and medium enterprise AOD authorizing officer Delegate NACC National anti-coruption committee RRI Rapid Results Initiatives
  • 4. TABLE OF CONTENTS LIST OF TABLESErreur ! Signet non défini. LIST OF FIGURESErreur ! Signet non défini. ABSTRACT.....................................................................................................................................................1 1.0.Introduction..............................................................................................................................................2 1.1.The background of the Study.................................................................................................................2 1.2.The Research Question ..........................................................................................................................5 1.3.Objective of the Study.............................................................................................................................5 1.4.Significant of the Study ..........................................................................................................................5 1.5.Limitation..................................................................................................................................................6 2.0.Methodology .................................................................................. …………..6Erreur ! Signet non défini. 2.1.Introduction..............................................................................................................................................6 2.2.What actually happened-the way it happened......................................................................................7 2.3.Review of Data Collection Methods.......................................................................................................8 2.4.Criteria for Sample Selection .................................................................................................................9 2.5.Pilot Study..............................................................................................................................................10 2.6.Methods of Analysis..............................................................................................................................10 2.7.Limitations .............................................................................................................................................12 3.0.Literature Review...................................................................................................................................12 3.1.Introduction............................................................................................................................................12 3.2.Discussion about literature review......................................................................................................12 3.3.Its relationship to methodology...........................................................................................................13 4.0.Theoretical Framework .........................................................................................................................13 4.1.Introduction............................................................................................................................................13 4.2.Public procurement system ........................................................................14Erreur ! Signet non défini. 4.3.Analysis of procurement according to economic theory..................................................................14 4.4.Dynamic of the process: New rules, articulations and innovations ................................................23 4.5.Dynamic procedures by the multiplicity of actors and factors in explaining the consumption of PIB……………………… ................................................................................................................................27 5.0 Empirical Findings……………………………………………………………………………………………. 32 5.1 Introduction……………………………………………………………………………………………………...32 5.2 Examination and assessment of the system……………………………………………………………...32 5.3 Analysis of the effectiveness and the reliability of the system………………………………………..39 5.4 Empirical analysis of the behavior of the curve of expenditure devoted to public investment….52 6.0 General conclusion…………………………………………………………………………………………….55 6.1 Conclusions……………………………………………………………………….........................................55 6.2Implications and Recommendations…………………………………..........................57
  • 5. LIST OF TABLE Table-1 : Steps of the call for tenders procedure...........................................................23 Table-2 : Steps of the OTC procedure……………………………………………………….24 Table-3: Attrition of procedures…………………………………………………………….34 Table-4: Amounts of public procurement and Endorsements by Contracting Authority and nature of services in 2010……………………………………………………………………………36 Table-5: Breakdown of credits Delegates by Region in 2010……………………37 Table-6: Credits delegate by region in 2011………………38 Table-7: Processing Time of bids by type Contracting Authorities in 2006…..38 Table-8: Evolution of programming files per category of stakeholders……………41 Table-9: Percentage of invitations to tender and award results published…………..42 Table-10: Percentage of endorsements by reporting to the total number contracts awarded……47 Table-11: Invitation to Tender subject of appeals to the number of Invitations to Tender launched.47 Table-12: Ratio of credits delegated removed……………………………………………………………….48 Table-13: Distribution of markets earned on international competitive bidding by type of enterprise…………………………………………………………………………………………………………..49 Table-14: Local bidders selected through the markets in international competitive bidding……………………………………………………………………………………………………………50 Table-15: Level and quality of implementation of projects in terms of number………………………………………………………………………………………………………….51 Table-16: PIB rate consumption
  • 6. 1 LIST OF FIGURES Figure-1: Overview of Tasks Required by the Project and Procurement Planning……………….4 Figure-2: Amount of Contracts and amendments (billion FCFA) from 2006 to 2011…………14 Figure-3: reason for choosing negotiation………………………………………………………….16 Figure-4: Schematic diagram of preparation of the Annual Finance Act…………………….30 Figure-5: Evolution of annual allocations compared to annual consumption…………….31 Figure-6: situation of programming by contracting authority………………………………33 Figure-7: Consistency of contracts issued and allotted……………………………………33 Figure-8: comparision between contracting authority…………………………………….34 Figure-9: RQ by category of the contracting Authorities in 2008…………………………….35 Figure-10: RQ by category of the contracting Authorities in 2011………………………………………………………………………………………………………….35 Figure- 11: Evolution of Studies…………………………………………………………………………..40 Figure -12: Change against the number of contracts awarded following a call for tenders or OTC………………………………………………………………………………………………………………..44 Figure-13: Percentage of the amount of the subtotal price Endorsements of the basic Markets and total value of contracts …………………………………………………………………………………….44 Figure-14: Unfavorable opinions expressed by STB……………………………………………………47 Figure-15: Appeal unfounded to the number of appeals received……………………………………………………………………………………………………………48 Figure-16: public contracts awarded to national or local bidders………………………………………………………………………………………………………………49 Figure-17: Evolution of physical cumulative output rate……………………………………………………………………52 Figure-18: Autocorrelation of the series of physical achievements on the basis of statistics LJUNG BOX ……………………………………………………………………………………………………………………………………………………53 Figure-19: Autocorrelation of the seasonally adjusted series ……………………………………………………………55 Figure-20: tactical and operational procurement process…………………………………………………..56
  • 7. 2
  • 8. 1 ABSTRACT Public procurement is the means by which the state and its subdivisions carry out work or studies and acquire goods and services. Thus, the quality of public expenditure is dependent on the performance of the public procurement system in the phases of planning, execution and performance of contracts. Between 2010 and 2012, the share of public investment budget has increased from 26.5% to 28.30% of the state budget. This heading change target of 30% by 2020, considered in the growth and employment Strategy Paper, as necessary to reduce the infrastructure deficit. Nowadays, all government expenditure depending fully in private sector for products or services, a good example is within stationery items, construction of roads, cleaning works, transportation and so forth. These procurements have been associated with many scandals such as favorism in awarding of procurement contracts to some companies. However, despite the efforts made by the Authorities to increase the performance of our public contracts system, it is still subject of request for improvement by several actors notably with regard to the heavy procedures, need for celerity, fight against corruption and the effective application of sanctions. To attain this objective, the creation of a ministry exclusively devoted to public contracts in the wake of the major achievements theme is therefore aimed at solving these problems and rendering our system more efficient. The aim of this thesis is to assess the relevance of organized programming and procurement process, and their impact on public spending following an analytical approach developed on a quarterly sequence from the first quarter 2003 to the fourth quarter 2011. This study has targeted observation and data collection about the rate of public investment budget during this period which have shown there is ineffective of the public procurement process that are injected by the public procurement Act of 2004 and others are caused by inadequate budget to pay suppliers on time, limitation of skills and knowledge to the ministerial staffs and PMU staffs. Furthermore, researcher has recommended that there is a need to emphasis training of user PMU staffs and thinking how to dematerialize procurement process. However this new Ministry is not panacea – solution of everything but it must be dynamic to accommodate (new issues as it will be raised new techniques and principles that will insure accountability and efficiency on procurement. However there is a need to put in place also TV programs of public procurement to enhance information in fighting against bad behavior during procurement process.
  • 9. 2 1.0. Introduction It is present the background and the nature of the problem being considered. Thus, the study is set in context explaining why this research is important, highlighting significant issues, problems and ideas. Finally stated the aim and objectives of study. 1.1.The background of the Study Within the perspective of becoming an emerging country by 2035 Cameroon set objectives based on growth and employment in the growth and employment Strategy Paper (GESP).The Government thus intends to invest heavily in infrastructure, convince about their driving role in facilitating exchange and promoting strong growth. Cameroon adopted the 2009 growth and employment Strategy Paper (GESP), as a framework for government action for the Decade 2010-2020. This strategy focuses on achieving more sustainable infrastructure and quality. This requires a proper implementation of public expenditure, which requires that the national system of public procurement to be efficient. However, despite the efforts made by the Authorities to increase the performance of our public contracts system, it is still subject of request for improvement by several stakeholders notably with regard to the heavy procedures, need for celerity, fight against corruption and the effective application of sanctions. To attain this objective, the creation of a new ministry exclusively devoted to public contracts in the wake of the major achievements theme is therefore aimed at solving these problems and rendering our system more efficient. The issue of the effectiveness of public expenditure is acute. Improving the performance in this area can be obtained through two essential modalities. First, it would reduce losses along the chain of expenditure, which would concentrate a greater level of resources at the end of string. Secondly, it should initiate actions to improve the impact of resources that reach the end of the chain. At resources unchanged, an increase in the efficiency of public expenditure therefore increases the supply of public goods1 . To make its market system efficient and harmonize with international standards, Cameroon enriched the legislative framework relating to several texts2 , namely: 1 BIDIAS (Benjamin), Les finances publiques du Cameroun 2eme édition, B.B., S.A.R.L., 1982, Yaoundé 2 http://www.armp.cm/textesmp.htm
  • 10. 3 Box: Some national laws governing the procurement process in cameroon - Decree n ° 2004/275 of 24 September 2004 on Public Procurement Code; - Decree n ° 2004/275 of 24 September 2004 to institute the Public Contracts Code; - Decree n ° 2003/651 of 16 April 2003 laying down detailed rules for the implementation of tax and customs regime of public procurement; - Decree n ° 2005/5155 of 30 November 2005 laying down the operating procedures of the Special Allocation Account for the regulation of public procurement; - Decree n ° 2001/048 of 23 February 2001 establishing the organization and functioning of the Public Contracts Regulatory Agency (PCRA) - Decree amending and supplementing certain clauses of Decree No. 2012/076 of 8 March 2012 on the establishment, organization and functioning of the Public Contracts Regulatory Agency (PCRA) - Decree N ° 2012/075 of 8 March 2012 on the organization of Minister of public contract - Decree establishing the organization and functioning of the Tenders Board. - Decree 97/049 of 5 March 1997 on the organization and functioning of the Board of budgetary and financial discipline; - Decree 97/047 of 5 March 1997 on the organization of services of Supreme State Control; - Decree 89/913 of 31 May 1989 on the organization of the standing committee on defense procurement and security; - The order N°070 / CF / in June 20th, 2003 carrying regulator's delegation of power of the Managing director of the Agency of Regulation of Procurement contracts; - The order N°092 / CAB / PM of November 05th, 2002 fixing the allowances of session of the Presidents, Members and Secretaries Reporters of Special Tender Board -The order N°093 / CAB / PM of November 05th, 2002 fixing the amounts of the pledge of submission and the expenses of the file of call for tenders (CAD); - The order N°032 / CAB / PM of February 28th, 2003 fixing the modalities of application of the request for quote; - The order N°111 / CAB / PM of December 24th, 2002 carrying organization and functioning of the Permanent Secretarial department with Special Tender Board In effect, this ministry, responsible for the organization and smooth functioning of public contract, issues call to tender in collaboration with the ministries and structures concerned, awards contracts and controls the execution on the ground, takes part, where necessary, in financial preparation of projects, subject of public contracts. Procurement planning is a necessary condition to ensure proper use of funds, transparency procedures and compliance. Conclusions of studies carried out in the domain of public contracts indicate the existence of a programming journal of contracts as the source of the numerous cases of breaches of regulations, low consumption of investment credits and poor quality of executed services as well as the lack of readability of the whole process. After the previous four editions jointly organized by the public contract regulatory Agency (PCRA) and the Ministry of Economy, planning and Regional Development (MINEP/ESPPT) the 2012 programming Conferences were effectively organized from 21 to 24 February 2012 all over the national territory3 . 3 MINPC file
  • 11. 4 Figure-1: Overview of Tasks Required by the Project and Procurement Planning4 Programming of public contracts aims at: - A consumption of all budgeted or delegated credits through the award of all programmed projects - Transparency of procedures through wide communication and respect of programming - Respect of the rules and procedures in force - Avoiding abusive recourse to the exceptional procedure of mutual agreement - Mastery of deadlines in the award of contracts and running costs of tenders Boards - Preparation of a control panel, aid tool or precious guide for all public contracts actors. In this context budgetary conferences5 are one of the greatest moments of administrative life. They offer a particularly important and delicate framework not only for the arbitration of all project to be included in the state budget, but they specially give the opportunity to ministries and other government departments to express their priorities in compliance with the development policy. It is actually during the said conferences that the budgetary allocations which would be necessary for the running of the nation for the next 12 months are made. The quality of the execution of public expenditure largely depends on the content that is given to these budgetary conferences. The global objective is to select and include in the state budget, sufficiently mature projects in order to bring about growth. In other words, it is a question of rationalizing the budget choices in order to attain efficiency so that expenditure should henceforth effectively contribute to the attainment of development goals. In a more precise manner, budgetary conferences permit us to make the choice of the projects to be retained for financing more rigorous and objective. It is the ultimate step in appraising the degree of maturity of the project. In general, the principal phases of the budgetary conferences are based on the following points: 4 smartcardalliance.org 5 Passage guide at the public investment budgetary conferences copyright by MINEPAT
  • 12. 5 - Presentation of the state of execution of the budget of the current financial year while laying emphasis on the hindrances to its proper execution; - Expression of the budgetary needs for the next financial year; - Presentation of justifications of the proposed; - Projects. 1.2.The Research Question Recognizing this longstanding problem of procurement process and its direct relationship to attain efficiency in public investment expenditure, it is better to respond to these specifics questions: 1. How do the procedures of markets influence negatively the efficient execution of the PIB? 2. Within the framework of the execution of the PIB, what impact the multiplicity of the actors can have on the good consumption of the credits of investment? In fact, analyze the behavior of the pace of expenditure in connection with the execution of investment projects in order to develop a better approach to optimize the efficiency of public expenditure in relation to the new orientation results-based budgetary. The sketches of answers to these questions will be organized in the general framework of the objectives pursued in connection with the hypotheses of research formulated afterward. 1.3.Objective of the Study The general objective of this study is to show that the process of execution of the public spending dedicated to the investment does not allow reaching the objectives of performance of the administration regarding consumption of the credits of investment. This general objective is pursued through the following specific objectives: 1. Analyze the process of procurement contracts in connection with the execution of the PIB; 2. Measure the impact of the actors of the chain of consumption of the credits of investment on the good execution of the PIB. Within the framework of this work, the hypotheses of are: Hypothesis 1: the long procedures of procurement public have a negative effect on the good consumption of the credits of public investment Hypothesis 2: the multiplicity of the actors of the chain of consumption of the BEEP has a negative effect on the good execution of the projects of public investment 1.4.Significant of the Study The system of procurement contracts appears as the instrument which allows the processing of the financial potential (budget) of a country into infrastructures and social equipments (roads, schools, hospitals). By this fact, it is considered as an essential vector against poverty and as means important for the improvement of the populations living conditions.
  • 13. 6 In Cameroon, the volume of markets on the basis of the information available on the PCRA represents 2010, 661,2 billion of FCFA for 5461 contracts and in 2011 (on 31/10/2011) 490,2 billion FCFA for 3774 contracts, whereas in 2012, the PIB represents 28,30 % of the Budget. A trend which if it is maintained in the next years, according to the persons in charge of the MINEPAT, the 30 % cape, aimed in the GESP should be reached from 2013. The interest of such a study can be appreciated at various levels. The approach by quarterly observations of the level of consumption of the credits of investment states the opportunity and the impact of choices by projects hired on the global objective of the new economic policy which will be implemented in 2013 with the effective application of the Budget-program; an approach tending to organize better the programming of the supply of the State in goods and services An approach which aims at endowing the contents of the process of procurement contracts in Cameroon of sensible additional elements to strengthen the current dynamics of consumption of the credits of investment by a better organization of the actors of the chain of the spending expense and an adjustment of the procedures. After all, the aforementioned study focuses on the reform of the public policies regarding efficiency of the public spending; in particular the expenses were dedicated to the investment sector for a better appreciation of the level of realization of the projects on outside and internal resources. Of more the method of Box and Jenkins about the chronological series highlights the factors which influence significantly the consumption of the credits of investment in an optics forecaster to anticipate Ex-ante factors of disturbance or incentive in the optimality of the execution of the PIB. 1.5.Limitations Within the framework of these works, it is important to raise certain observations: • At first, it would be necessary to notice that the data observed on the evolution of the rate of the PIB every 03 months were not still produced by the statistical departments, in this particular case the rate of the PIB for year 2012 considering the fact when the consumption of the PIB becomes generally considerable from the second quarter of the year of the exercise and reports are produced at the end of exercise. It is the reason for which, in the optics to make more significant our data, it seemed convenient to exploit data from 2003 to 2011. • Besides, in view of the fact that the secondary concerning data the rate of execution of the PIB appears in cumulative value of successive quarter at the other one, it was agreed to make more relevant our empirical results to proceed to a centering of these variables by considering that if the variable X represents the rate of execution of the PIB to the first quarter and Xt+1 successive rate accumulated for the next quarter, then the real value of the successive rate will be X * = ( Xt+1) - ( Xt); what allows to a certain extent to eliminate the effect of the colinearity of variables to be explained. 2.0 Methodology 2.1 Introduction The used methodological frame allows placing the context of the study as well as the explanatory factors of the phenomenon bound to the spending, the participants and the
  • 14. 7 approaches related to the processing of the problem. Thus, the purpose of this chapter is to indicate what actually is done so that to evaluate the design procedure and findings of the study. 2.2 Explanation of the things happened-the way it happened The recurring problem of the low consumption of the credits of investment, while Cameroon fell on a trajectory of two-digit growth for in terms on the horizon 2035 to become an emerging country, raises questioning and analyses on the explanatory factors of this state of thing. So, studies were led by the MINEPAT, the concerned ministerial departments, the PCRA and today the MINPC on this problem; the relevant results which were come from these studies did not still allow stopping this insufficiency. To redraw the behavior of the curve of spending of public investment to better seize the problem, we opted for an analysis of the statistics on procurement contracts resulting from the PCRA and the quantitative data observed quarterly on the evolution of the BIP to make more significant the explanatory factors of the rate of execution of the public purchases and thus formulate an additional approach of the process of procurement contracts. 2.2.1 Persons concerned The low consumption of the BIP concerns the various actors of the chain of the spending dedicated to the investment, in this particular case: the regulators, the controllers, the public accountants, the public and private economic actors involved in the process of the procurement contracts and the citizens which expect for the impact from it at the level of their purchasing power. 2.2.2 Results expected As we are going to see it, the quality of the spending is influenced in phase of programming, signing and execution of markets; so, the improvement of the efficiency of the procedures of the State’s supply in public goods and services favors the creation of positive externalities in the economy. 2.2.3 Trends of solutions Surrounding areas of solutions concern: 1. The anticipation and the pressure widely taken into account within the framework of the participation and the collaboration of the actors of the chain of spending at the conferences of programming; 2. The improvement of the communication and the training of the participants in the process of planning and execution of the projects of markets; 3. The dematerialization of the procedures by the development and the use of the computing software of programming and follow-up of the projects registered on the PIB.
  • 15. 8 2.2.4 Approach to data The data exploited within the framework of this study concern the quarterly observations accumulated by the rate of execution of the PIB from 2003 till 2011, as well as the statistics on the signing, the execution and control of procurement contracts over the period 2004-2011. Besides, the guide of elaborate interview allows accentuating more particularly the data on the vision and the impact of the actors of the chain of consumption of the credits of investment as well as their behavior throughout the process. 2.3 Review of Data Collection Methods 2.3.1 Explanation of the data collection methods chose the best suited to fit the research question The method of data collection is based at first on the exploitation of the essential secondary data of the evolution of the PIB emanating from the newspaper of the projects of government services and from annual physico-financial reports strengthened by the technical departments of the MINEPAT, as well as the statistics on markets from 2004 till 2011 were supplied by the PCRA. These data collection method6 was chosen because it provides the raw description of the topic, also by using tools such as interview to enhance more information about the different actor’s perception of the procurement process and recommendation on how to improve effectiveness of budgetary consumption. 2.3.1.1 Secondary Data 2.3.1.1.1 Secondary data used The data necessary for our estimations arise from statistical offices and from reports of physico-financial execution of the public capital budget published by the MINEPAT over the period 2003-2011, as well as from statistics on markets from 2004 till 2011 edited by PCRA. 2.3.1.1.2 The way it feed into the current research These data are an emanation of field works made by the local committees of follow-up of the PIB and relieved by government services and strengthened by the technical departments of the MINEPAT, the MINPC, and the PCRA for the production of report. So, these secondary data operate by their significance a symmetric inking with the problem on the level of consumption of the credits of investment. In the sense that the length of the procedures and the multiplicity of the actors explain the dynamics of the rhythm of consumption of the PIB. 2.3.1.2 Primary Data 2.3.1.2.1 A detailed description of research conducted and design of the tool 6 Silverman, D. (2006) Interpreting Qualitative Data, 3rd Edition Sage Publications India Pvt ltd, New Delhi.
  • 16. 9 Primary data from a field study conducted with an interview guide7 addressed to those involved in the procurement process and execution of public contracts. The primary data consist of an additional insight into the behavior of these actors subject to various practices and consequences such as: the red tape, favoritism practices, (...) etc. Thus, there was talk of surrender, where possible, with local committees to monitor the PIB and officials (CAD) concerned. Ultimately, the primary data collection was done by an interview guide for committed individuals to advance targeted because of their involvement or experience in the budgetary framework and more specifically procurement procedures public. 2.3.1.2.2 Description of fieldwork and specific procedures used The study concerns the data on the implementation of Ministries’ PIB made up of projects as well as projects on assigned funds in the decentralized services of the Public Administration, as of Decentralized Territorial Communities, Settlements and Public sector companies and Para-public. Given the national scope of this study, it was discussed in addition to the data mentioned, crop gathering additional data, by the exploitation of the interview guide. 2.4 Criteria for Sample Selection 2.4.1 Number of total sample The first sample consists of the execution rate in absolute and relative cumulative PIB observed at the end of each quarter for each year from 2003 to 2011, considering that each quarter consists of a statistical unit equal to the rate of execution PIB this period, we obtain a sample volume of 36 statistics units. Another more diverse sample statistics for multiple procurement developed by the PCRA from 2004 to 2011. These statistics relate to the activities of key stakeholders in the system in this case the Contracting Authorities, Delegated Contracting Authorities and Tenders Boards. 2.4.2 Characteristics of sample and method of selection Given the methodology on the econometrics of time series by use of the method of Box and Jenkins8 to characterize the study sample, we will discuss this method of focusing the analysis on projections evolution of consumption PIB from the perspective of an analysis of pre-evaluative program budget which comes into effect in 2013. 7 See Appendix 8 The Box and Jenkins (1970) methodology , named after the statistician George Box and Gwilym Jenkins applies autoregressive moving average ARMA or ARIMA models to find the best fit of a time series, in order to make forecasts
  • 17. 10 2.5 Pilot Study 2.5.1 To whom was the study administered This work, developed as a tool for decision support, will improve the government strategy through a better use of credits for investments in the improvement of the optical everyday lives. Furthermore, this work is of a scientific nature, will be useful to researchers and students be interesting in the field of finance and control and more generally to all actors in the chain of consumption in Cameroon. 2.5.2 Changes made to the research tool Generally, studies related in the field of effectiveness of PIB have focused analysis of cost, namely in this case scientific publications belong to Naegelen and Mougeot9 (1997) on discrimination in the markets. In their demonstration, they show that the prohibition of discrimination in public procurement is not a priori optimal competition policy when the social cost of public funds, the comparative advantages and distributional goals are taken into account. Also the article by Marechal and Morand 10 (2002), dedicated to outsourcing and amendments in the procurement perspective has two different regulations relating to the temporality of the announcement of the terms of subcontracting. Following the considerations of the auction formats which solve the problems of adverse selection and collusion of bidders, the optimal Bayesian’s auction goes beyond putting the allocation system away from the moral hazard in the implementation phase of the market. It is clear that many aspects remain unexplained or unclear, the results of the research will attempt to clarify some of these issues by pursuing an exploratory approach to the development of part of the expenditure devoted to investment in 09 years data intra- annual to shed new light on the relationship discussed in the literature between the execution rate of BIP and the factors explaining the procurement process. In particular, it will be through an econometric time series according to Box & Jenkins methodology to formulate a model to represent a chronicle with the ultimate aim to predict ex-post changes in the PIB and the necessary adjustments seen better planning and execution of public contracts. 2.6 Methods of Analysis 2.6.1 Brief explanation on how to analyse the data To achieve the research, objectives will be adopted methodological approach both statistical and econometric. This approach uses tools such as charts and graphs, the 9 Mougeot, M. et F. Naegelen (1997), «Marchés publics et théorie économique : un guide de l'acheteur», Revue d'Economie Politique, vol 107, n°1, p. 3-31. 10 Maréchal, F et P. Morand (2002), «Sous-traitance et avenants dans les marchés publics: une illustration», Revue d'Economie Politique, Vol 202, n°1, p 103-120.
  • 18. 11 assumptions will be verified using statistical analysis provided by the PCRA and time series using the method of Box and Jenkins. The Box & Jenkins methodology is to formulate a model to represent a chronicle with the ultimate aim to predict future values. This methodology suggests a four-step procedure: Model Identification Model estimation Model validation (diagnostic test) forecast a) Model Identification In this first step, the object is to determine as from the observation of the autocorrelation functions and partial single family type models ARIMA (p, d, and q) the appropriate model. Informal tests include the analysis of moments and plots to detect stationarity11 , but they are only testing stationarity assumption. Then check these intuitions (informal tests) are made by the application of formal testing including unit root test of Dickey Fuller12 . b) Model estimation This step is to estimate the model appropriate parameters selected. c) Model validation Model validation refers to various statistical tests to determine if the specification is congruent model that is to say it can not be set to default. These statistical tests are to test the residuals of the model do not precisely estimate the white noise but come close in other words to be autocorrelated residuals and do not exhibit heteroscedasticity. d) Forecasting Forecasting of the sample is not actually part of the study model of Box and Jenkins; it seemed relevant to incorporate in its purpose as part of the sample studied. 2.6.2 A description of the type of software. Within the statistical treatment of data, we use SPSS13 because of its exploratory analyzes and statistical graphics quickly get a description of the data. More specifically, assess the needs of users (do they meet services to user needs?) Evaluate the quality of services (users are they satisfied with the services?) Assess the performance of services (services reach - their objectives?). Similarly, we can associate the graphics smoothing curves to synthesize information. The models proposed by this software range from simple regression statistical regression to the most complex to treat panel data, and even time series processing. 11 Statistical stationarity: A stationary time series is one whose statistical properties such as mean, variance, autocorrelation, etc. are all constant over time. 12 It is named after the statistician D.A Dickey and W.A. Fuller, who developed the test in 1979 13 SPSS software was created by two students of Stanford University, Norman Nie and Tex Bull (SPSS Inc Administrators.) for data analysis in social research in the 60s.
  • 19. 12 2.7 Limitations 2.7.1 The limitations of the using of this software for the study SPSS has three important limitations that need to be aware of: Users have less control over statistical output than, for example, Stata or Gauss users. For novice users, this hardly causes a problem. Has problems with certain types of data manipulations, and it has some built-in quirks that seem to reflect its early creation. The best known limitation is its weak lag functions, that is, how it transforms data across cases. Certain types of analyzes are sometimes problematic to achieve (graphical longitudinal data contrasts factorial ANOVA codes, etc.). 2.7.2 The way to overcome these limitations For novice users, this hardly causes a problem. But, once a researcher wants greater control over the equations or the output, she or he will need to either choose another package or learn techniques for working around SPSS's limitations For new users working off standard data sets, this is rarely a problem. But, once a researcher begins wanting to significantly alter data sets, he or she will have to either learn a new package or develop greater skills at manipulating SPSS. Estimating the parameters for the Box-Jenkins models is a quite complicated non-linear estimation problem. For this reason, the parameter estimation should be left to a high quality software program that fits Box-Jenkins models. Fortunately, many statistical software programs now fit Box-Jenkins models. These techniques require computer software to use. Fortunately, these techniques are available in many commercial statistical software programs such as SPSS that provide ARIMA modeling capabilities. 3.0 Literature Review 3.1 Introduction This stage is a critical review of the existing literature (published and unpublished) relating to the research question and aim and objectives of the study. In some cases it will be to discuss about literature review and its relationship to methodology. 3.2 Discussion about literature review Many studies have been carried out on public procurement. We may mention Naegelen and Mougeot’s article (1998) on discrimination in public procurement. This article shows that the prohibition of discrimination in public procurement is not a priori an optimal competition Policy when the social cost of public funds, the comparative advantages and distributional goals are taken into account. It also shows that the traditional argument against preference relating to the lack of incentives for cost reduction is limited in scope and that the principle of dichotomy, the attribution rule should remain discriminatory. Also the Marechal and Morand article (2002), dedicated to outsourcing and amendments in the procurement perspective has two different regulations relating to the temporality of the announcement of the terms of subcontracting.
  • 20. 13 In addition, In et al. (2002) examined the impact of corruption on the competition in public procurement. Under the assumption that a corrupt bureaucrat gives a company the opportunity to readjust its offer in exchange for a bribe. They lead to the following result: - First, corruption negatively affects competition insofar opportunities resubmission granted by the corrupt bureaucrat encourage bidders to form a price cartel; - Secondly, the control firms is increased efficiency in this environment, for allowing the restoration of price competition. -Third, when the bureaucrat provides additional favors to a company or to the phase of contract award, or implementation phase, monitoring activities become pests resulting in the exclusion of certain companies’ allocation process or the execution of public procurement. 3.3 Its relationship to methodology Developments preferred in the literature review have addressed aspects ranging from cost analysis on discrimination in public procurement, the question of comparative advantages, reflections devoted to subcontracting and amendments in the procurement. A consideration on the auction formats which solve the problems of adverse selection and collusion of bidders. The methodological framework will in addition to assessing the impact of these policies on the expected total cost of the market and the probability of obtaining a negative ex-post profit of the contractor, to clarify some these aspects pursuing an exploratory approach to the development of part of the expenditure devoted to investment in 09 years in intra-annual data. This approach will shed new light on the relationship discussed in the literature between the execution rate of PIB and the factors explaining the procurement process. In particular, it will be through an econometric time series according to Box & Jenkins methodology to formulate a model to represent a chronicle with the ultimate aim to predict ex-post changes in the PIB and necessary adjustments related. Therefore, the researcher will model the problem studied on the behavior of the curve of spending devoted to investment by the constitution consists of a time series based on its past and present values to determine the appropriate process. That is highlight of the explanatory variables on the level of consumption of the BIP to capture the significant variables and to derive policy recommendations on the strategy for better planning and execution of public contracts. And from reports on the effectiveness of the public procurement system published by the ARMP, to analyze the dynamics annual prevails. 4.0 Theoretical Framework 4.1 Introduction Public procurement is a means by which the state and its subdivisions carry out work or studies and acquire goods and services. Economic theory is developed analyzes to better understand the variation in the level of consumption rate investment credits.
  • 21. 14 4.2 Public procurement system The procurement system appears to be the instrument that allows the transformation of a country's financial potential in infrastructure and social facilities (roads, schools, hospitals...). Thus, it is considered an essential tool for fighting against poverty and as an important means for improving the living conditions and wellbeing. In Cameroon, the amount of contracts awarded14 in 2010, 661.2 billion FCFA for 5461 contracts and 2011 (31/10/2011) 490, 2 billion FCFA for 3774 contracts. The state budget for 2010 allocated to public investment represents 26.65% of the overall envelope equal to 2570 billion FCFA, for the year 2011, the public investment budget is 26 46% out of a total of 2571 billion CFA francs and 28.30% of a total of 2800 billion FCFA in 2012. A trend that if continued in the following years, according to officials of MINEPAT, the rate of 30% referred to in the GESP, to be achieved by 2013. Figure-2: Amount of Contracts and amendments (billion FCFA) from 2006 to 2011 Sources: PCRA files Therefore it appears that the economic and social development of a country is largely dependent on the effectiveness and integrity of the procurement system. 4.3 Analysis of public procurement according to economic theory Procurement is part of an economic logic indirectly related to the needs of populations. Of the politico-economic procurement vision, it will be presented economic analyzes that govern the process. 4.3.1 Procurement and economic Policy 4.3.1.1 Public Purchasing and economic Policy Public Purchasing represent a considerable amount of funds in the state budget (490.2 billion CFAF 3,774 contracts in 2011). Several sectors of the economy depend largely on these purchases. • determining a right Price In general, so far, the determination of right market price is based on public competition. Given the reduction or elimination of public competition process occurred gradually with 14 on the basis of information available in PCRA
  • 22. 15 OTC and tender, particularly in certain sectors such as: electrical equipment, aerospace, railway equipment, telecommunications, prices are not always objective. Aside from the limited foreign competition, there are two possibilities: - The negotiating skills of the public purchaser; - The information and surveys on costs, prices and cost of providers • Action on public procurement sectors of economic activity Can Procurement policy be an instrument of industrial organization and political action on the sectors of the economy? In fact, the importance of public procurement in some areas leaves no choice. Purchases can not have an effect on industrial structures. In both cases, the role and responsibility of the purchaser public than those of a simple traditional buyer only concerned to get the work and supplies. 4.3.1.2 Elaboration of a public procurement policy But there are still major concerns for the general interest which are not met by the principles contained in the legislation on public procurement. These include concerns which tend to link procurement policies to economic policy. In fact, the weight of procurement is such that in some areas, it is very urgent and important to assess their economic impact and how these sectors which contracts with the administration respond to these procurement operations. Hence the urgent need to implement ways to integrate public procurement policy in a political sense of the fact that there is indeed a contradiction between the administrative and legal framework of public procurement and economic concerns of the state. This is particularly true of the difficulties there's savings to maximum, that is to say, to obtain better prices suppliers. This objective can only be achieved on the basis of large orders for the implementation of series or orders corresponding to a small number of uniform types. It is necessary that an effort be accomplished in terms of economic data, the level of procurement authority by implementing processes census studies to assess the economic impact of public procurement. 4.3.1.3 Public purchases and the economic situation This problem can not be dissociated from the variation of the budget depending on the situation. But in practice, the complexity of the problem is obvious: - The multiplier effects of government spending - The economic impact of public spending - The time between the decision to buy and execution of the order. Difficulties and Avatar of political control costs in terms of stabilizing public expenditure 15 15 Laffont, J. J. ET J. Tirole (1993), A Theory of incentives in Procurement and Regulation, MIT Press, Cambridge.
  • 23. 16 4.3.2Economic analyzes that govern the process Despite their importance in the State budget, procurement was not a priority for economic analysis. But with the development of reflections on the topic including auction theory and incentive contracts, a rigorous analysis of procurement of goods taken by the state body in the body of economic research methodology. Thus, the relative efficiency of the call for competition and negotiation in public procurement, it will issue highlighting agreements and capture in public procurement. 4.3.2.1 Opening to competition and negotiation in public procurement A comparison between the call for competition and negotiation will lead to the presentation of different competitive procedures for awarding public contracts. 4.3.2.1.1 Comparison between the call for competition and negotiation The competition means the formal procedures of the common law relating to bidding and restricted. While trading refers to informal procedures characters called derogations or markets traded OTC. Work on the call for competition was conducted in 1997 by Mougeot and Naegelen. This work, it is considered the purchase of an indivisible goods by a purchaser neutral vis-à-vis the risk facing potential sellers who are neutral vis-à-vis the risk. In this context symmetrical, they admit that the costs of all enterprises are distributed according to the same law of distribution function and density function of the common knowledge of the buyer and suppliers. At first sight, the buyer does not know the company competitive and must therefore seek a rule of contract award and payment that results in retaining the company with the lowest cost and reduce the rent it can be attributed due to information asymmetry. This in conditions such that when the bidders select their strategy, they do not know if their bid wins, the purchaser selects a rule that reduces disability informational. This is the specific auction procedures characterizing the call for competition in public procurement. Figure-3: reason for chosing negotiation Source: survey Indeed, the use of a call for tenders depends on the comparison between the cost of organization (need specific personnel, the establishment of ad hoc committees,
  • 24. 17 dissemination of information etc..) and the gain associated with it; either ex-ante, the difference between the expected cost and the second highest cost. If this difference is small (low cost differentiation in the sector concerned), the gain associated with the consultation of an additional supplier is low and may be lower than the cost of the procedure. Therefore, they recommend the use of negotiation with one company when the cost of the call for tenders procedure is higher than the expected gain from the competition. Indeed, the structure of supply is in some cases an exogenous variable (when barriers to entry result from the nature of production processes, the evolution of markets or legal specifications) and in others an endogenous variable (consequence of the choice of the quality of goods or practices favoritism). The buyer is not neutral in this regard may have chosen to deal with a monopoly which refers to the possibility of a coalition with the supplier. Even if the legislation does not take into account the endogeneity of the market structure. They planned markets called "negotiated" in the case where only a summary competition can be organized (in the case of research, call for expression of interest and tests, emergency, Construction work or secrets relating to National Defence, in the case of monopoly legal or space, if unsuccessful market) or impossibility of competition (in the case of legal monopoly of asset specificity, project type, extension). Similarly Bajari, P., R. Mc Millan ET S.Tadelis.16 (2003) propose a framework for comparison between auctions and negotiations starting construction contracts to private implications for procurement works. Their main conclusion is that the more complex projects with an anticipation of endorsements, more negotiation is needed, while auctions are effective for simple projects. Indeed, in the auction, bids are often the only information held by the public purchaser. Whereas in the negotiation, the buyer and the supplier to discuss all aspects of the project before signing the contract. The importance of communication and coordination between the buyer and the supplier in complex therefore provides an alternative explanation for the correlation between the complexity of a construction project and the use of OTC. After briefly the different contexts in which are relatively effective the call for competition and negotiation, we will now discuss the different procedures or competitive bidding. 4.3.2.1.2 Competitive procedures for awarding public contracts Since the pioneering work of Vickrey17 , theorists distinguish four main types of auction (bidding in the first price tender Vickrey auction down hollandaise and English ascending auction) can be grouped into two families procedures auction: 16 Bajari, P., R. McMillan ET S. Tadelis (2003), «Auctions versus Negotiations in Procurement: An Empirical Analysis».NBER Working Paper n° 9757. 17 William VICKREY brought the auction description in terms of game theory in 1961.
  • 25. 18 - Procedures for first-price auction in which the contract is awarded to the lowest bidder, - Procedures for second-price auction in which the contract is awarded to the lowest bidder who is, however, paid the second lowest price. The bid first price auction and down within the first hollandaise family while ascending English auction and call for tenders for are the Vickrey second. Therefore, this section will focus on the comparison between these two types of procedure. This will be done in two different settings, depending on the symmetry and asymmetry of suppliers. a) Comparison in a symmetric framework Such a comparison procedures auction was made by Mougeot and Naegelen (1997), first under the assumption of neutrality vis-à-vis risk and absence of transaction costs, and other under the assumption of hostility risk suppliers. • Assumption of neutrality towards risk and the absence of transaction costs Referring to Vickrey, the expected profit is independent strategies when agents use their optimal strategy. They conclude, therefore, that if the contract is awarded to the lowest bidder, all procedures provide the same benefit to the winner and therefore the same discounted price for the buyer. In call for tenders in the first price, the submission of each company is equal to the sum of the cost and a "mark-up" strategy where each adopts a strategy Bayes-Nash symmetric. Strategy increasing and decreasing at a point in another, being chosen by the winner, then the buyer pays the lowest cost increased by annuity that appropriates the company due to information asymmetry. Buyer pays so hope this average cost. However, given the fact that the second-price auction is revealing in dominant strategies, the outcome of the bidding in the first price in expectation perfectly equivalent to a second-price procedure. Under the assumptions stated above, all the procedures leading to the award to the lowest bidder and ensures zero profit for the company less efficient, are equivalent. They therefore lead to the same discounted price for the award. • Hypothesis of hostility to the risk of suppliers Under the hypothesis that all bidders are risk averse, the equivalence of the discounted price is not verified. This can indeed be understood intuitively. Procedures in second price, the optimal strategy is always to announce its true cost, firms are neutral or not. In contrast, in the first call for tenders prices, arbitration between maximizing profit when you win and that the probability of winning is changed so that the "mark up" is reduced to increase it. The price offered when all bidders are risk averse is lower than the price offered in case of neutrality. As a result, the winner's prize is lower on average than the winner of the call for tenders second price, which is equal to the price in case of neutrality.
  • 26. 19 Therefore, if the buyer is not known whether the providers are all neutral or risk-averse, he had better choose the first call for tenders price which gives a result equivalent or better. When all suppliers are characterized by the same attitude vis-à-vis the risk that the rent that company appropriates due to information asymmetry decreases when the degree of risk aversion increases. As a result, the supply of each agent decreases and therefore the expectation of the purchase price: the more suppliers are risk averse, the higher the price paid by the government is low. This factor is particularly important that the companies concerned depend on public procurement for a large part of their Sales. b) Comparison in an asymmetric Framework The symmetry assumption implies that so far adopted all suppliers is as homogeneous as regards the allocation of costs that a priori attitude vis-à-vis the risk. But the heterogeneity of agents is common. Regarding costs, the disparity of opportunity costs, the use of different production techniques, the location or size of business factors that could cause differences a priori beliefs about the costs. These factors are also likely to lead to different attitudes vis-à-vis risk, firms with few controls showing, for example, more aversion vis-à-vis risk than those whose capacities are saturated. What becomes of the strategies highlighted when firms are heterogeneous a priori? As regards the cost asymmetries, Griesmer, J. H., R.E. Levitan and M. Shubik. (1967)18 , Maskin, E. S. and J.G. Riley (1986)19 , have revealed a complex set of results. On the one hand, the equivalence theorem of discounted price is disabled. On the other hand, the system of differential equations characterizing optimal strategies has no general analytical solution. For the differentiation of the attitude vis-à-vis risk work of Cox and al. (1982 Mougeot, M. et F. Naegelen (1991)20 showed similar effects: no general analytical solution of differential equations, the equivalence theorem invalidation cost, differentiation strategies depending on the degree of risk aversion vis-à-vis the risk. The heterogeneity of providers limits the previous result when different agents are treated the same way. The buyer may however use this heterogeneity to his advantage by adapting the allocation rule. In addition, Eklöf (2003)21 highlighted the social costs of an inefficient allocation of markets through the process of call for tenders in the first price in the presence of asymmetric 18 Griesmer, J. H., R.E. Levitan and M. Shubik (1967), «Toward a Study of Bidding Processes. Part IV, Games with unknown Costs», Naval Research Logistic Quarterly, Vol 14, n°4, p. 415-433. 19 Maskin, E. S. and J.G. Riley (1986), «Asymetric Auctions», Working Paper, University of California-Los Angeles. 20 Mougeot, M. et F. Naegelen (1991), «Duopole de Bertrand, asymétrie d'information et bien être collectif», Revue Economique, Vol 42, n°6, p 1027-1046. 21 Eklöf, M. (2003), «Assessing Social Coasts of Inefficient Procurement Design», Working Paper Series, Uppsale University, Department of Economics.
  • 27. 20 agents. This asymmetry implies that the first call for tenders price is based adverse selection observed during the execution. According to this author, this is inefficient and social costs are not negligible. Therefore recommends to the purchaser, the use of second- price auction, which remains effective in such circumstances. After highlighting of the relative efficiency of the call for competition, negotiation and different call for tenders procedures, it is important to analyze the phenomenon of recurrence in collusion with the undeniable Public Procurement. 4.3.2.2 Capture and agreements in public procurement The existence of cartels and capture in public procurement seems to be public knowledge. There are two types of collusion or two forms of cooperation in a game theoretical uncooperative. 4.3.2.2.1 Cartels in public procurement allocation Collusion22 refers generally the behavior of companies entering into agreements or work together to make decisions in markets, often on their pricing, intending to limit or impede free competition in these markets. The market then leads to high prices and a misallocation of resources in terms of efficiency that is to say in terms of a criterion evaluating the needs of society as a whole. It is not simply a failed-transfer from consumers to companies, but a situation in which all stakeholders could benefit from a different allocation of resources. Cartels represent a cost to society and a social inefficiency. According to Hendricks and Porter (1989), the existence of a cartel or collusion can take many forms and occurs mainly in repeated bids: Winners rotation associated with bids of ghosts equalities, bids abnormally high ... etc. The detection of these agreements is difficult because the observed phenomenon may be attributed to other explanatory factors such as the existence of diminishing returns or limited capacity. It is therefore a difficult problem both from a practical standpoint that the theoretical point of view. However, we can find an econometric analysis of the problem in Porter and Zona (1993). Rare literature has favored the explanation of the internal workings of the agreement (supply determines that each member file, choose the winner of the call for tenders among cartel members, determine how the surplus obtained by the coalition will be shared). McAfee and MacMillan23 (1992) have highlighted mechanisms coalition optimal in the case of symmetric bidders. These works, even if they have the highlighting of the role of reserve price as deterrent agreements, however, has a limited practical because they are mainly second-price auction. 22 Collusion is a phenomenon that distort the optimal price and where some players agree not to exceed bid and overbid («Auction Theory: A Guide to the Literature », p. 25-26). 23 Mc Afee, R. P. et J. McMillan (1992),«Bidding Rings», American Economic Review, Vol 82, p. 579-599.
  • 28. 21 In addition, the public purchaser has several ways to make unstable coalitions reducing the opportunities for cartel members to detect non-cooperative behavior and reducing the leeway of the cartel. Mougeot and for Naegelen (1997), with the aim of reducing the agreements, the buyer may reduce the possibility of collective manipulation by setting a reserve price or become unstable cartels opening markets to competition, reducing the time response by modifying the list of firms consulted by limiting the information provided on the ex-post market outcome. 4.3.2.2.2 The capture in public procurement allocation • Capture into the award of contracts In a public contract, bidders are not the only actors. One or more agents representing the public entity is in charge of organizing the market, choose the award procedure followed to select qualitative criteria and their relative weights for judging a bid multi, grant additional time to respond to the tender invalidate the result of a call for tenders or authorize bidders to change their bids etc.. These public employees are involved in the process and play an active role due to their discretion. Capture or corruption is therefore a coalition between the buyer and one or more suppliers. Mougeot and Naegelen (1997) distinguish three main forms: - The payment of benefits fictitious or "bribe" by all participants equates to a cost of participation raises the price by an amount greater than the bribe; - The award of the contract to the lowest bidder who actually receives ex-post higher prices as a result of an amendment which compensates the side payment to the buyer; - The allocation according to economically most advantageous offer based on a subjective preference. For them the discretionary power enjoyed by the buyer is usually sufficient for the emergence of favoritism. Thus we can not fight against it by reducing this power. Reduction retaliatory power justifies the payment of bribes by all suppliers, limiting the possibilities of endorsements, reducing the possibility of preferential selection of quality. However, they are aware that this reduction can have perverse effects (reduction of the number of competitors, for example) and it is impossible to define a general rule. For Caillaud (2001)24 , public officials, like all economic agents react to their own motivations, such as ethical or moral priorities, or imposed on them by their socio- economic environment, such as those relating to their administrative career professional or political. Indeed, the public official can be influenced by the prospect of a career, future contracts or other legal or financial compensation, and diverting the procedure for the benefit of the company that can provide him such prospects. 24 Caillaud, B. (2001), «Ententes et capture dans l'attribution des marchés publics», Document de Travail, CERAS-ENPC.
  • 29. 22 The personal relation and various psychological factors involved in the careers of these agents are also sources of lack of objectivity. There can therefore be no analysis procedures for awarding public contracts without taking into account the risk of capture. In addition, the author indicates that this side of distortion in the choice of agents due to multiple incentives to which they are subject, there are also forms of fraud where a capture agent turn away public proceedings in exchange for favors such as illegal travel services for private, bribes, kickbacks, secret financing activities or political campaigns etc.. Moreover, the author distinguishes capture by a bidder that several bidders. First capture the public official by a bidder will generally result in a bias in the allocation of markets or a situation generally referred to favoritism. The terms of the allocations themselves can be altered so that it takes place at a more advantageous price for the bidder or as technical specifications or less trade restrictive. As for the capture a set of bidders, the goal is for them to organize and coordinate an agreement between them through the official. The capture and agreements are inseparable and then feed each other. The consequences of capture are very similar to those of collusion among bidders. In case of capture, especially of favoritism, the contract award is diverted for the benefit of bidder who can offer attractive consideration to the Civil servant, a criterion unrelated to the fact that the company has for example the lowest cost or offer the most efficient. The inefficiency will be the rule in capture situations. The capture also led to price manipulation of public procurement to the benefit of the company that carries so at the expense of public finances. • Capture in the performance of contracts Capture or corruption is here, the collusion of the contractor and the company for the successful operation of the principal that is to say the State. As reference work, we will rely exclusively on one of Meleu 25 (1998). Meleu focused on corruption in public procurement in the context of a model of principal- supervisor-agent. For him, basically capture results from the combination of two assumptions: The first is the information asymmetry between the principal and supervisor or agent The second is the divergence of objectives or interests between the principal and the supervisor. Indeed, the discretion available to the supervisor combined with his private interests is the cause of capture. For example, "In terms of road surface contracts, the parties may agree to the thickness of the shape of road. 25 Meleu, M. (1998), Asymétrie d'information et contrôle de la corruption dans la gestion de développement, Thèse pour le Doctorat d'Etat en Sciences Economiques, Université d'Abidjan Cocody.
  • 30. 23 The civil engineer of the Ministry supervising the work, after finding that the company undertaking the project has not met the standard thickness agreed, has the ability to hide this information to the Department. It happens to make some policy elements fight against corruption. These are: The quashing of monopoly in the provision of public services, Reducing the margin of discretion of state officials, accountability, Dissemination of information to increase the likelihood of detecting the capture, Creation a system of reward and punishment, the moralization of public management. Thus, the use of different types of auctions or agreement must be supported by a rigorous analysis on factors such as the complexity of the project, the confidentiality of the project, the number of bidders, their attitude towards risk, the structure of their costs, reputation etc… 4.4 Dynamics of the process: New rules, joints and innovations The government circular of March 8, 2012 Clarifies procedures and roles of each stakeholder in the new classification system procurement. 4.4.1 The authority of public contracts Since the reorganization of the Government on 9 December 2011, the Ministry for the Presidency of the Republic in charge of Procurement is in control of this area in place of the Prime Ministry ensured that before the role of Public contracts Authority. However, the architectural of the stages of procurement process remains little changed. Otherwise some adjustments for steering the mastery of large works now delegated to MINMAP, as well as the monitoring and control of the entire process. Table-1 : Steps of the call for tenders procedure N° Restricted Invitation to Tender Open Invitation to Tender reference Code 1 Beginning pre-qualification - Art. 12 2 Notice to candidates - Art. 12 3 Report of prequalification by the CA or CAD - Art. 12 4 Finalisation of IT document Preparation and completion of the IT document Art. 17, 18, 19 5 transmission of IT document to TB Transmission of IT document to TB Art. 124 6 Signature of the IT Art. 111 7 Publication of invitation to tender in the procurement newspaper Art. 20 8 Preparation of bids by bidders Art. 21 9 Submission of the offers to the CA or CAD Art. 24 10 Opening - Processing Art. 24, 25, 26, 125 11 Constitution of the Subcommittee of analysis Art. 125 12 Preservation of original tender by the President of the TB Art. 125 13 Transmission at PCRA of a copy of each tender (72 hours) 14 Receipt of the analysis report by the TB Art. 27, 124
  • 31. 24 15 Award proposal Art. 8, 32, 33, 33, 35, 37 16 Signature of the award decision Art. 17 Publication of the award decision and the outcome of the IT in the procurement newspaper Art. 33, 119 18 Notification of the decision to the successful tenderer Art. 33 19 Drafting of the proposed contract by CA or CAD Art. 55, 56, 57 20 Transmission of file to TB Art. 124 21 Signature of the contract by the CA or CAD Art. 38, 11 22 Notification of the contract Art. 58 23 Registration of contract by the tenderer 24 Notification of the order of service to start Table-2 : Steps of the OTC procedure N° OTC Reference Code 1 Solicitation of Procurement Authority for approval of OTC Art. 28, 127 2 Consideration and response of the procurement Authority Art. 127 3 Preparation of the consultation file Art. 128 4 Consultation of at least three candidates Art. 127 5 Transmission of file to TB Art. 128 6 Award proposal to TB Art. 128 7 Award by the CA or CAD Art. 32, 33 8 Signature of the award decision Art. 33 9 Publication of the award decision in the procurement newspaper Art. 33 10 Notification of the decision to the successful tenderer Art. 33 11 Drafting of the proposed contract by CA or CAD Art. 55, 56, 57 12 Transmission of file to TB Art. 124 13 Signature of the contract by the CA or CAD Art. 38, 111 14 Notification of the contract Art. 58 15 Registration of contract by the tenderer 16 Notification of the order of service to start Sources: PCRA The reform introduced by Presidential Decree of 9 December 2011 organizing the government 26 provides that: "The Minister in charge of Public contract is responsible for the organization and functioning of public procurement. In this regard: - It launches calls for tender for public procurement in conjunction with the ministerial departments and administrations; - Perform the procurement and execution control field in conjunction with the ministerial departments and administrations; - Participates, if any, the arrangement of finance of the procurement in connection with public ministerial departments and administrations. This ministry is also the arbiter of conflicts between Tender board and contracting authorities. Just as it is the use of aggrieved bidders. The Public Contracts Regulatory 26 Decree N°2011/408 of 09 December 2011 on the organization of government
  • 32. 25 Agency remains as her body technical support. "It serves to strengthen the capacity of all stakeholders." 4.4.2 Accountability in procurement Including the new circular contained in the decrees organizing the government and the Ministry of Public contract lists exhaustively the authorities and officials entitled to issue invitations to tender and sign the procurement. It is the minister in charge of public procurement, and the heads of government departments and other public authorities; directors of institutions and public or semi- public, regional delegates of Procurement, the Chief Executives of local authorities decentralized and project managers. 4.4.3 Competence thresholds The Minister for the Presidency of the Republic in charge of public contract awards jurisdictional thresholds under the central Tender board, as well as central services departments when the envelope of the transaction is $ 50 million F or more. Between 5 million and less than F 50 million, Ministers and heads of government are empowered to award a contract. In the region, the delegates of the Ministry of Public contract is responsible for procurement of funds delegated to decentralized regional government in varying amounts between 5 million F without exceeding 50 million F. Distribution continues for departmental delegates. It extends to general managers and directors of public and parapublic heads of executive decentralized territorial communities and project managers. The distinction is made in the latter group between the infrastructure, services and intellectual services as well as general supplies. Limitation of powers between 15 and 500 million CFA francs can refer to a higher level markets utmost importance. 4.4.4 The Tenders Boards There are 05 types of Tenders Board: - Central Tenders Boards that are placed with the minister in charge of public procurement; - The ministerial Tender boards which are competent to assist other ministers; - Local Tenders boards which include the regional commissions, departmental delegates, led by the Public Procurement in the regions and departments; They can supplement internal commissions that we find now with the leaders of some of the regional and local authorities, where these latter are not able to bear the operation. - The internal Tender board placed with some heads of public institutions and corporations or quasi however, is supported by the budget of these institutions; - Special Tenders Boards will be created by the market authority and assigned to development projects in need.
  • 33. 26 4.4.5 The rules of delay The reform aims at reducing overall completion time of procurement. For example, the contracts committee has a maximum of 21 days from the date of opening of tenders, to propose allocations of the market. In emergency procedures, the delay is 5 days27 . 4.4.6 OTC, endorsements Officially, it is recognized that these two practices are at the root of many failures in the world of public procurement. The OTC market, according to the public procurement authority, violates the principle of universal free access to public contracts service. At the same time it eliminates competition guarantor of quality and fair price. Also, the reform provides for the favor of emergency procedure while being faster (42 days against 45 for the OTC market) preserves competition between bids. The authority procurement will also be responsible in this regard to ensure the compliance of potential markets OTC to procurement Code which lists exhaustively the cases where the client can use. As for endorsements, officially supervised rate of at most 30% of the contract base, the fight against the misuse of privilege is preventive competition. Specifically, the procurement authority fully intends to play the card of quality control documents of tenders ensuring correct or to take in accordance with relevant ministries calls with studies sloppy, incomplete or even absent. 4.4.7 Behavior of actors in the system: Defects, abandonment, fraudulent payments. On this point, the new rules allow to control the chain studies to achieve and even to pay benefits. Innovation is the institution of the prior approval issued by the Minister of Public contract in the request for payment of benefits by the other party. As noted in the head of this ministry: "We do not want payment beyond, because it would be a waste of money to the state, or below, because then the company that weaken it and its partners and especially its employees, by depriving them of a fair price for their work." Rejecting the argument that the visa could create bottlenecks and increase the slowness criticized, the Minister notes that the case must be completed within three days of the request of the partner state. 4.4.8The brigades of control It is through audit teams work that the head of Procurement management unit want to avoid that the "three days" are not a blade that falls regularly on its activities for the preservation of public resources. 27 References : PCRA files
  • 34. 27 At the Ministry of Public Procurement, there are already 50 controllers in central services. In each region, delegations should understand at least eight, while each department will have at least four delegates to regularly evaluate the work of each procurement Thus, it is intended to avoid surprises and prepare the decision to grant the visa even before the applicant has spoken. "Also, controllers should go down unexpectedly to each phase of the project. 4.4.9Dashboard and strategic monitoring The keystone of the device, visa required payments is in continuity with the self- government orders by the new authority on public procurement. Upstream work began with the holding of the 4th conference programming. The owners have established the schedule of procurement for the current year. This calendar includes the deadlines calls for tenders, tenders board session, reception etc. A database that provides its owner a clear vision on who does what, where, when, for what purpose (the new circular mentioned above refers to the obligation to include projects in the public investment budget and corresponding conform to the GESP) With this forecasting method, the authority of public procurement can also boost before the laggards and detect critical moments failures and possible abuses. Grâce à cette méthode prévisionnelle, l’autorité des marchés publics peut aussi relancer les retardataires et détecter avant les moments critiques les défaillances et dérives éventuelles. 4.4.10 The issue of procurement season While recognizing the existence of procurement disconnected with reality social economic (minimum packages for schools coming in the third quarter (public buildings and works sector launched to the edge of the rainy season, purchase of agricultural seeds after sowing, etc.). The procurement authority believes that the current system will eliminate the incongruities of the world of public procurement. With national planning synchronized without being truly centralized. "The meaning of the program is to adapt to any environment, leaving the owners decision to choose the projects they will work through public procurement, because they know the environmental constraints while allowing keep an eye evaluation and monitoring”28 . 4.5 Dynamic of procedures by the multiplicity of actors and factors explaining the consumption of PIB Separation of duties of authorizing officer and accountant is the backbone execution system of public expenditure. This is an absolute rule and rigid which retraces a natural division of tasks: initiating or authorizing the expenditure of one side and the other one 28 References: Journal of synthesis programming procurement of MINPC
  • 35. 28 who has the responsibility of paying or accounting. These two phases are called administrative phase and accounting phase. The modernization of the expenditure circuit in legal terms (institution building for verification and improvement of the regulatory framework for public procurement with the adoption of a new procurement code that enhance equality of opportunity for economic operators), organizational (increasing the number of senior accounting position to ensure the maximum efficiency of the accounting action), the human capacity (through training policy actors expenditure circuit). This section aims to highlight the actors in the chain of expenditure devoted to PIB and the factors explaining low power consumption. 4.5.1 Dynamics of the process chain of consumption of PIB by the multiplicity of actors The expenditure chain consists of two phases: - The phase known is that of administrative officers; - The phase known accountant is the responsibility of accounting. The administrative phase has three stages: commitment, validation and scheduling. The commitment of expenditure is the act by which a civil servant creates or establishes an obligation which results in a charge. It must be include a commitment to accountant in order to reserve the relevant Credit. It is materialized by an order, a contract or commitment decision expenditures. Liquidation is to verify the reality of the debt and stop the exact time of the expenditure. It can be made after complete delivery of the order on the basis of the documentary evidence of rights acquired by the creditor. The scheduling of expenditure is the act whereby according to the results of the liquidation, the order is given to the accountant to pay the expense. The authorization of the expenditure is prescribed by the authorizing major, secondary, or their delegates. The principle of separation of powers and functions between the officers and accountants can be stated in two propositions: - The duties of authorizing are distinct from those of the accountant. - The duties of authorizing are incompatible with those of the accountant. The separation between officers and accounting is essentially justified for the following reasons29 : The concern for mutual control; The division of labor; The Financial Action unit. Is authorizing officer income and expenditure, any agent or any person acting on behalf of a public body to contract, certify, liquidate a debt or order the collection of a debt or the payment of a debt. There are authorizing officers30 : - Senior; - Secondary; 29 Sources : Survey 30 Sources : MINFI files
  • 36. 29 - Delegates; - Substitutes. The Contracting authorities are those which receive budgetary approval. Secondary authorizing officers are those whose approval is delegated. Contracting authority delegate manage by delegation of authorizing primary or secondary. Authorizing alternates shall be appointed in advance to perform the duties of authorizing primary, secondary or delegates when they are absent or prevented. Is a public accountant, any agent or any person entitled to perform on behalf of the State, revenue transactions, revenue expenditures or handling of securities either by means of funds or securities. There are accountants: - Senior; - Assistant. Accountants are those which centralize Assistant accounting operations attached to them, accountable for their management at the Court of Auditors and the Assistant accountings are those whose operations are centralized by a Senior Accountant. At central level, the Director General of Budget, through its competent services, sends all payment orders. Texts explicitly provide the implementing rules of state spending and classify the different actors in the chain of expenditure into three groups: - The actors involved at the stage of commitment and liquidation; - The actors involved in the stage of scheduling; - The actors involved at step accounting of budget execution. - The actors involved at the stage of commitment and liquidation Here, two actors involved in the chain of expenditure: Credit Administrator and the Financial Controller. The credit managers propose spending commitments and prepare the liquidation. Ministers and heads of institutions of the Republic are administrators of their credit department. They may delegate their powers to credit managers. The general manager of the independent amortization fund manages what is related to the expenditure of the public debt. The Financial Controller is responsible for ensuring compliance with the regulations for the execution of expenditure following the Finance Act which sets out the framework.
  • 37. 30 Figure-4: Schematic diagram of preparation of the Annual Finance Act Source: Built by the author from reports physico-financial of MINEPAT It has a priori control over all expenditures of the state budget to the phases of engagement and liquidation. A representative of the Financial Controller is assigned to each ministry or group of ministries to improve efficiency of case processing revenue expenses for commitment and liquidation. The credit managers require the implementation of revenue and expenditure. Actors involved in the stage of payment mandate The Minister of Finance is the main authorizing officer of revenue and expenditure of the state budget. He may delegate his powers to the Minister Delegate in charge of the Budget or the Director General of the budget with regard to spending on the state budget. The Director General of the budget is responsible for providing budget and notifies administrators of credit, financial controllers, accountants, public finance laws, secondary legislation and subsequent budget acts as they become enforceable. It provides the authorization of expenditure on the state budget made at the central level. Those responsible for budgets and special accounts are AOD’s spending on budgets and the special treasury accounts. The Chief Authorizing Officer may delegate authorizing officer secondary credits. This delegation of credits must receive financial controller approval. It is notified to senior accountant who transmits, if any, to accounting officer. Credit for the decentralized services of the State, sub-centers are ordering services of the Directorate General of Budget and are led by a second authorizing officer. Actors involved in the accounting step of budget execution The treasurer General is the chief accountant of the general budget of the State. It is accounting officer for all expenses of the general budget of the state at the central level. It may, under certain circumstances prescribed by regulation, delegate some of his powers to other public accounting: assistant accounting officers or secondary. State required annual /Department -Regional Delegation -National Directorates MINFI Budgetary guideline letter Consolidation / arbitration in every department of OB and PIB Justification of the budget proposals by the Ministers to the NA committees Presentation / PA of the draft budget to the National Assembly Presentation of departmental budgets in Cabinet member Vote of the annual budget law by the NA Promulgation of the annual budget law Publication of the Finance act in the ONP and the Cameroon Tribune
  • 38. 31 In addition, the researcher would like to specify that the bidder is the main actor that initiates the process of public expenditure upstream and downstream. 4.5.2 The factors explaining the low consumption of PIB After more than a decade of implementation of the expenditure chain, many challenges remain and reveal the weaknesses of the system, including: • Heaviness in the circuit of the expenditure; • Redundancy of some controls carried out throughout the chain lengthening processing times records of expenditure; • The inefficiency to curb expenditure according to cash generating so many still has to pay over the years. For several years, there is a significant difference between the appropriations voted under the financial year and actual consumption at the end of fiscal year. Thus, consumer credit is almost always inferior since 2003 to the allocation in the initial Finance Act. Figure-5: Evolution of annual allocations compared to annual consumption Source: Built by the author from reports physico-financial of MINEPAT • An low-consumption which mainly concerns investment credits • The slow disbursement of grants The low-consumption of credits can not be dissociated from the slow payment of subsidies. In public procurement reports published by the PCRA, it is noted that a delay often elapses between notification of the grant and actual payment. • The main reason: the complexity of projects According to the PCRA, the gap between available funds and credits consumed "is found in the most part, both in the local fund operative and investment", and is essentially the complexity of the projects. • The lateness of conference programming
  • 39. 32 The procurement is a preliminary stage of implementation of the project cycle; Thus the conclusions of studies in the field of public procurement are the lack of a programming diary procurement is usually the cause of many cases of breaches of regulation, low consumption and investment loans approximate the quality of services provided and the lack of transparency of the process. • A monitoring and evaluation still perfectible Credit monitoring and evaluation are always subject to cogitation due to the importance of their action on the smooth running of the system. • The long absence of monitoring delegated credits The monitoring of the utilization of delegated credits in real-time has long been impossible, the accounting system of prefectures are not directly connected to the control service of budget, but the budgetary monitoring committees established by MINEPAT bring encouraging response to this situation. • the limited assessmentt An external evaluation of the Public Procurement Authority still perfectible 5.0 Empirical Findings 5.1 Introduction Joints developed an evaluative analysis concerning the public procurement system based on statistics collected documents PCRA and an econometric study of the seasonal variations of the public investment budget observed quarterly over the period from 2003 to 2011. 5.2 Examination and assessment of the system After the adoption of the Public Procurement Code in September 2004, and activities related to public procurement system in Cameroon it became necessary to make an assessment in order to conduct an evaluative study. 5.2.1 The Situation 5.2.1.1 Programming of award of contracts activities The situation of planning programming paper received by PCRA related to the type of Contracting Authorities and Delegated Contracting Authority is detailed in the following chart
  • 40. 33 Figure-6: situation of planning by contracting authority Source: built from PCRA documents The observations departments and the masters of works Delegates held in a good newspaper production programming compared to other state structures, certainly a better logistics and local information often not available in remote areas. Although the number of papers produced in 2009 is 16% higher than that of 2008, the rate compared to active committees is; however, lower than in 2008 when it was 61%. This decrease results from the fact that some players, including two ministries, 2 Delegated Contracting Authority, 48 PAI, 128 RLA and 3 projects have not programmed the awarding their contracts. If all CAD (governors and prefects) submitted their respective newspapers, the most significant increase recorded in 2010 is of Regional and Local Authorities, with an increase of approximately 298.1%, representing 287 newspapers against only 72 in 2009. 5.2.1.2 Launched Call for Tenders Figure-7: Consistency of contracts issued and allotted Source: built from PCRA documents The distribution of calls for tenders in 2006 shows that by the contracting Authorities, the contracting Authorities delegated showed more dynamism Given the low ratio between the number of contracts awarded in 2007 and the number of calls for tenders, an analysis was made on the outcome of the proceedings during the year. It emerges that in 2086 lots (representing 56.5% of the calls for tenders launched in 2007) had not yet been assigned to 31 December 2007. This rate was 46.5% in 2006.
  • 41. 34 Figure-8: comparison between contracting authority Ministry PAI Governor and Prefect RLA Head of project Sources: PCRA The ratio between the number of contracts awarded and the number of calls for tenders observed in 2008 and 2009 remains weak, the analysis on the outcome of the proceedings during this exercise that releases 2244 lots (lot 2306 respectively) (representing 34.75% and 51.48% of calls for tenders) had not yet been assigned to 31 December 2008 and 2009. This rate was 56.5% in 2007 and 34.75% in 2008. December 31, 2010, the number of calls for tenders amounted to 4822; a slight increase of 7.7% over 2009 compared to the same date the following, where the rate is 12, 75%. The analysis on the outcome of the proceedings during this exercise reveals that 2,752 lots (representing 65.41% of the calls for tenders) had not yet been assigned to 31 December 2011. This rate was 52.82% in 2010. Tableau-3: Attrition of procedures years call for tender alloted Call for tender canceled Call for tender unsuccessful canceled procurement Cancellation of allocation 2007 2086 22 165 20 8 2008 1975 83 206 40 4 2009 2306 41 207 27 9 2010 2547 13 271 30 1 2011 2752 12 200 37 7 Sources: PCRA The mode of consultation RQ is mainly used for the procurement of smaller supplies and rehabilitation work of buildings as recommended by the regulations. In 2008, the Delegated Contracting Authority is the ones who have the most launched Tenders or 1975 number representing 49.6%. This result from decentralization and to a lesser extent, their tendency to call for bids for each delegate or credit for projects in the same locality.