Presentation by Paulo Magina, Head of the Public Procurement Unit, OECD Public Governance Directorate, on central purchasing bodies: a framework for measuring productivity and economic impact, Tbilisi, 6-7 November 2019.

1. CENTRAL PURCHASING
BODIES: A FRAMEWORK FOR
MEASURING PRODUCTIVITY
AND ECONOMIC IMPACT
Paulo Magina
Head of Unit, Public Procurement
Public Governance Directorate
OECD
3rd regional conference on public procurement
for ENP East countries
Tbilisi, 6-7 November 2019

2. Human capital
Legal and
governance structure
Strategic
Procurement
Centralisation of
procurement
Organisational, human and technological
enablers of strategic procurement
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E-procurement
Economic
impact

3. Assessing the impact of policies
beyond economic performance
Natural capital
Economic
capital
Social capital
Human capital
Sustainability of well-being over time
Sustainability of well-
being over time
Inspired by the OECD well-being framework

4. Understanding the multidimensional
impacts of procurement
Natural capital
Economic
capital
Social capital
Human capital
Sustainability of well-being over time
PP
Sustainability of well-being over time

5. Examples for indicators measuring
impact on the different capitals
Ratio of public
contracts pursuing
objectives such as
health, education
(where possible:
outcomes secured
through public
contracts)
Proportion of
government tender
documents that are
shared openly in a
format allowing
review and analysis
Comparison between
C02 emissions from
historical goods and
services bought by
government, and new
goods and services
selected using
emissions as criteria
Time taken by
government
personnel,
including non-
procurement
roles, to undertake
procurement
activity

6. ENABLER #1
A LEGAL ENVIRONMENT
CONDUCIVE TO STRATEGIC
PUBLIC PROCUREMENT
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7. Efficient co-ordination of the
procurement legal system
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•National legal procurement frameworks should
allow for a number of options in terms of
procurement methods that can be used.
•Applying the right procurement method/strategy
is a key determinant of both the efficiency and
effectiveness of the process.
•Simple, modern and adaptable procurement
legal frameworks are the key to success

8. ENABLER #2
LEVERAGING ON
PURCHASING POWER
THROUGH
CENTRALISATION
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9. Centralisation efforts provide
foundations for greater efficiency
• There are many opportunities in existing
structures: efficiencies through sectorial
specialisation, more targeted responses to needs
• Challenges relate to overall economic
sustainability
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10. • Communication is key to illustrating benefits
• Experience shows that realising economic
benefits is easiest by aligning the organisational
structures and collaborative tools
with procurement needs
• Centralisation in a federal system: from
centralised systems to centre-led organisations,
a range of options are offered to meet specific
needs and clients' expectations
Investing in centralisation: realising
strategic benefits
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11.  Understanding impact of centralisation in Chile
The role of technology to support
strategic centralisation
Figure 3.4. Share of products transacted
Total, 31.46%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Proportion of non-transacting suppliers and revenue shares of top 10 suppliers in each framework
agreement
0
100
200
300
400
500
600
700
800
900
1000
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%

12. ENABLER #3
USE OF TECHNOLOGY FOR
GREATER EFFICIENCY AND
PRODUCTIVITY

13. 13
Performance management system is
still lacking in most countries

14. E-procurement has impact… beyond
procurement
• OECD member countries are moving towards integration
with other government systems
• Enabling procurement platforms and financial systems to
communicate allows better management of finances
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15. ENABLER #4
STRATEGIES TO ACHIEVE
BROADER POLICY
OBJECTIVES
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16. Strategic procurement in Finland
The Finnish government have indicated a desire to use
procurement to achieve a number of broad objectives, such
as:
• Strengthening competitiveness by providing
opportunities for SMEs to participate in procurement
processes by reforming legislation and removing
regulation that prevents competition;
• Creating a growth environment by ensuring the level of
innovative procurement is at least 5% of all public
procurement; and
• Boosting the strength of the domestic market by using
public procurement to make Finland a pioneer in clean
technology.
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17. Challenge: measuring the impact
• A lot of strategic initiatives are in their
infancy = hard to measure their impact
• Each initiative is different, therefore has
different indicators for success
• The challenge is making a standardised
measurement framework
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18. DEVELOPING A
PRODUCTIVITY FRAMEWORK
FOR MEASURING THE
IMPACT OF CPB
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19. CASE STUDIES: Finland & Chile
A framework for productivity:
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20. Creating an indicators framework
• To assess the viability of a framework for measuring
procurement productivity such as in Finland, there needs
to be an understanding of the metrics that could be used
to assess performance at different levels of government,
and the data that is required to ensure effective
measurement.
• This can be used to develop a roadmap towards
comprehensive and effective measurement.
• Further refinement of the measurement indicators will
enable the tangible benefits to the economy in terms of
value to be quantified in countries such as Finland where
5% of tenders are innovative.
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21. Indicators monitoring economic
impacts
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Objective Data requirements Applicability in Finland
Overall inputs
required of
CPB
Staffing levels; cost of running CPB;
breakdown of time spent on different
activities
Internal data on staffing can be used to
establish overall CPB inputs, and
division of inputs by activity
E-procurement
inputs
Direct costs for purchasing, upgrading or
maintaining e-procurement system;
personnel costs associated with system
management and maintenance
Handi project can provide a central and
detailed view of e-procurement system
and personnel costs
Innovative
procurement
Ratio of goods and services purchased
that meet innovation criteria (e.g.
purchased through PCP, first introduction
into domestic market etc).
Measurement has been established to
ensure 5% of tenders are innovative, to
meet the national target. However,
further work required to a) clarify whether
5% represents value or quantity and b)
to extend measurement to understand
the impact of innovative procedures
Measuring CPB Performance in Finland

22. Indicators monitoring environmental
and social Impacts
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Objective Data requirements Applicability in Finland
Reduction of
CO2
emissions
Comparison between CO2
emissions from historical goods and
services bought by government and
new goods and services selected
using emissions as criteria
Requires understanding of CO2 emissions of
previous goods and services throughout
lifecycle, as well as emissions of current
goods and services (e.g. emissions from
previous vehicle fleet compared to current
fleet). Current measurement purely involves
calculation of spend through ‘green’ contracts
Open and
inclusive
procurement
Proportion of government tenders
that use open procedures as
opposed to restricted or closed
tenders
Data available on how many procedures are
conducted by
open/restricted/negotiated procedures
Skills/jobs
creation
Number of jobs/training
courses/qualifications generated
through public procurement (note:
specifically generated through
contract clauses)
Information not easily available on number of
government contracts that include
clauses/criteria related to creating jobs or
delivering training
Measuring CPB Performance in Finland

23. FOR MORE INFORMATION ON OECD WORK ON PUBLIC PROCUREMENT
OECD.ORG/GOV/PUBLIC-PROCUREMENT
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