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© OECD
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
OECD Headquarters, Paris, 24-25 April 2014...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Core Central Procurement Functions
• Policy makin...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Supplementary Central Procurement
Functions
• Pub...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Other Central Procurement Functions
• Review
• Ce...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Reasons for Effective Institutional
Structure to ...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Considerations to be taken into
account
• clear d...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Potential conflicts of roles and interests
Certai...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Institutional Models
Various models are in place ...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Centralization or Decentralization?
Different way...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
1. CENTRALIZED PROCUREMENT
STRUCTURE
10
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Centralized procurement structure
• high concentr...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Centralised model (1)
• Bulgaria – Public Procure...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Centralised model (1+1)
• Latvia: Procurement Mon...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Country example - HUNGARY
Centralised model
 Min...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Country example - HUNGARY
Public Procurement Auth...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Country example - HUNGARY
Public Procurement Coun...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Country example - HUNGARY
Functions, duties of PP...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Country example - HUNGARY
 edits the Official Jo...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Country example - HUNGARY
But:
• PPA does not dra...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Country example - HUNGARY
• staff members are civ...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
2. SEMI-CENTRALISED
MODEL
21
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Semi-centralised model
• tasks are shared between...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Country example: AUSTRIA
• Bundeskanzleramt-Verfa...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Country example: AUSTRIA
• Bundesbeschaffung GmbH...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
3. DECENTRALISED
MODEL
25
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Decentralised model
• division of relevant procur...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Country example: FINLAND
Ministry of Trade and In...
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Country example: FINLAND
• Ministry of Foreign Af...
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5 Central Public Procurement Functions Identification, Combination, Separation, Conflicts of Interest, Checks and Balances_English

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ENI East Regional Conference Public Procurement Central Public Procurement Functions Identification Combination Separation Conflicts of Interest Checks and Balances Bozzay English

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5 Central Public Procurement Functions Identification, Combination, Separation, Conflicts of Interest, Checks and Balances_English

  1. 1. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU OECD Headquarters, Paris, 24-25 April 2014 Central Public Procurement Functions Identification, Combination, Separation, Conflicts of Interest, Checks and Balances Erika Bozzay, SIGMA
  2. 2. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Core Central Procurement Functions • Policy making and legislation • Secondary policy and regulations • International co-ordination • Monitoring and control
  3. 3. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Supplementary Central Procurement Functions • Publication and information • Advisory function and operational support • Professionalisation and capacity building • Operational development and co-ordination
  4. 4. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Other Central Procurement Functions • Review • Central purchasing
  5. 5. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Reasons for Effective Institutional Structure to Have in Place sufficient administrative capacity is needed to ensure the functionality of the public procurement system a proper institutional framework can support and coordinate the development, implementation and monitoring of public procurement legislation, policy and practices 5
  6. 6. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Considerations to be taken into account • clear distribution of functions and responsibilities among the central procurement authorities • functions, responsibilities are established by procurement legislation • institutions shall have independence and authority to exercise functions and duties effectively • having sufficient resources (human, financial…) • avoidance of potential conflicts of roles & interests 6
  7. 7. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Potential conflicts of roles and interests Certain functions can be in conflict with each other, e.g.: • compliance assessment functions (e.g. prior approval to contracting authorities for certain decisions in the procurement process), and review functions (review of complaints) • advice to contracting authorities, bidders on the application of the legislation, and review of complaints • advisory functions, and control functions 7
  8. 8. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Institutional Models Various models are in place in EU Member States: 1. Centralized 2. Semi-centralised 3. Decentralised No explicit legal requirement on central procurement organization in EU law
  9. 9. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Centralization or Decentralization? Different ways to organise the central procurement functions: • no “one size fits all” solution • national administrative traditions • aims of the national procurement system and level of development of procurement market are also decisive • advantages vs. disadvantages e.g. keeping functions separate helps preventing conflicts of roles and interests decentralized model – need for proper cooperation 9
  10. 10. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU 1. CENTRALIZED PROCUREMENT STRUCTURE 10
  11. 11. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Centralized procurement structure • high concentration of procurement functions • all core central functions are performed by one or two central institutions • Model 1: one dominant procurement institution, normally exercises legislative and policy functions as well. • Model 1+1:  legislative and/or policy functions are exercised by the ministerial structure  other important procurement functions are carried out by a special procurement body
  12. 12. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Centralised model (1) • Bulgaria – Public Procurement Agency • Cyprus – Public Procurement Directorate • Poland – Public Procurement Office • Malta – Department of Contracts • Romania – National Authority for Monitoring and Regulating Public Procurement • Slovakia – Public Procurement Office
  13. 13. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Centralised model (1+1) • Latvia: Procurement Monitoring Bureau + Ministry of Finance • Lithuania: Public Procurement Office + Ministry of Economy • Hungary: Public Procurement Authority + Ministry of National Development
  14. 14. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Country example - HUNGARY Centralised model  Ministry of National Development • drafting primary and secondary legislation • international coordination function (shared)  Public Procurement Authority all other functions
  15. 15. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Country example - HUNGARY Public Procurement Authority (PPA)  established in 1995 (by law)  autonomous administrative body  independent from the government, subordinated only to Parliament  it has a collective governance structure – Public Procurement Council
  16. 16. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Country example - HUNGARY Public Procurement Council • operates within the framework of the PPA • 14 members – includes all three segments of the major actors of procurements (contracting authorities, economic operators, public interest) • the law defines the organizations that have the right to designate the members of the Council • the members serve for at least a two-year-term • members are not employed full-time, not remunerated for their activity from the PPA • the working body of it is the Secretariat
  17. 17. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Country example - HUNGARY Functions, duties of PPA:  monitors the application of procurement law  comments on draft procurement legislation  issues guidelines (without legal force) to clarify recurring problems in applying procurement law  operates a help desk function to provide legal and professional support to purchasers and economic operators on a daily basis  maintains the Public Procurement Database, which is the central register of contract award procedures
  18. 18. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Country example - HUNGARY  edits the Official Journal of the PPA, verifies and publishes the notices related to the contract award procedures  prepares an annual report to the Parliament on the functioning of the national public procurement system (public)  collects and publishes statistical data on public procurement (on an annual and quarterly basis)  administers the official list of certified economic operators and certified procurement consultants  organizes conferences, trainings, professional courses
  19. 19. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Country example - HUNGARY But: • PPA does not draft the procurement legislation • PPA is not a central purchasing body • PPA does not exercise compliance assessment functions (ex ante control) concerning procurement procedures for EU funded contracts • Not the PPA, but the Public Procurement Arbitration Board is in charge of remedies • Trainings are organised mainly by the private sector • State Audit Office is responsible for auditing of procurement procedures 19
  20. 20. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Country example - HUNGARY • staff members are civil servants • the staff have various educational background (lawyers, economists, accountants, former practitioners…) • continuous education of the staff
  21. 21. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU 2. SEMI-CENTRALISED MODEL 21
  22. 22. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Semi-centralised model • tasks are shared between a limited number of institutions (3-4) at various levels within the public administration • Austria, France, Germany, Ireland, Italy, Luxembourg, Slovenia, Sweden, UK
  23. 23. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Country example: AUSTRIA • Bundeskanzleramt-Verfassungsdienst (Federal Chancellor’s Office – Constitutional Service - Section for Procurement Law)  Dominant institution  Functions: • Drafting primary and secondary legislation • Developing a federal procurement policy • International coordination function • Advisory functions • Monitoring and control functions • Information functions 23
  24. 24. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Country example: AUSTRIA • Bundesbeschaffung GmbH (Federal Procurement Ltd.)(public company, answers to the Ministry of Finance) • Business development and coordination • Central purchasing function • Federal ministry for Economy and Labor • Collecting statistical data 24
  25. 25. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU 3. DECENTRALISED MODEL 25
  26. 26. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Decentralised model • division of relevant procurement functions between various institutions (usually more than five) at various levels within the public administration, even bodies in the private sector are also involved • usually the respective ministries are in charge of regulatory functions, but there is no a dominant procurement institution for other core functions
  27. 27. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Country example: FINLAND Ministry of Trade and Industry:  drafting primary and secondary legislation  international co-ordination function (shared)  advisory functions (shared)  monitoring and control functions  information functions  professionalisation and capacity strengthen functions Ministry of Finance (Budget Department)  overall policy functions (developing and issuing procurement policies)  drafting standard contract documents
  28. 28. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Country example: FINLAND • Ministry of Foreign Affairs  International cooperation (e.g. contact point for European Commission) • Governmental Board of Procurement  planning public procurement development projects • Hansel Ltd (state-owned company)  Business development and coordination  Central purchasing function • HAUS Ltd., Efeko Ltd. (publicly owned)  Professionalisation and capacity-strengthening functions (shared) • State Audit Office  Monitoring, audit functions 28

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