This document discusses the potential economic benefits of regional cooperation in public procurement for CARICOM countries. It provides background on CARICOM, including the total population and GDP of member states. Currently, public procurement systems in CARICOM countries are underdeveloped with inconsistent donor support and little regional economic cooperation. However, the total public procurement market of CARICOM is estimated at $15 billion annually, representing a significant opportunity. The document analyzes challenges like small domestic markets and lack of transparency. It highlights the example of the OECS Pharmaceutical Procurement Service which achieves average annual savings of 30% through pooled procurement. With best practices and strategic, pooled regional procurement, CARICOM could potentially save $3.75 billion annually. The document outlines

1. CARICOM:
Small Market-Big Money
Amalgamating the Procurement Market to
Transform Small Size into an Economic
Advantage
By: Sharlene Shillingford-McKlmon and Shirley Gayle Sinclair

2. Introduction

3. Profile of the Caribbean Community
• Established by Treaty of Chaguaramas -
1973
• 15 states spread across the Northern,
Central, and Southern Caribbean plus
top of south America
• Total population – 17.3Mil
• CSME – CARICOM Single Market and
Economy Space – unified approach to
development/global competitiveness -
2001

4. Countries of CARICOM

5. Economic and Geographic profile of CARICOM
Name of State GDP
US$ Billions
GDP per capita US$
Thousands
Physical size (sq km) Population
Antigua/Barbuda (A&B) 1.22 13,428.64 442 88,000
Bahamas (BAH) 8.373 22,832.91 13,940 352,000
Barbados (BAR) 4.262 16,151.70 431 278,000
Belize (BEL) 1.637 4,535.50 22,966 343,000
Dominica (DOM) 0.495 7,022.04 754 71,000
Grenada (GND) 0.811 7,496.46 344 105,000
Guyana (GUY) 3.02 3,596.43 214,970 775,000
Haiti (HA) 8.287 758.85 27,750 10,413,000
Jamaica (JA) 14.389 5,540.67 10,991 2,752,000
Montserrat* (MON) 0.04378 8,500 102 5,189
St. Kitts & Nevis (SKN) 0.767 12,803.52 261 57,000
St. Lucia (SLU) 1.377 7,276.09 616 168,000
St. Vincent & Grenadines
(SVG)
0.742 6,489.25 389 110,000
Suriname (SUR) 5.009 8,685.81 163,270 546,000
Trinidad & Tobago (TT) 27.13 19,018.21 5,128 1,329,000
TOTAL 77.519 17,387,000

6. 17 Million Person Market

7. Public Procurement- Current State
• Procurement reform – all countries, varying degrees
• Regional (CSME) procurement Protocol – initiated
but low momentum
• Donor intervention: Inconsistent across region; not
holistic
• Only 1 country demonstrates some features of a
strong procurement system
• Very little economic cooperation taking place in
procurement.
• weak “Country Systems”

8. Public Procurement- Current State
Face significant challenges due to the lack of
• (i) well-functioning administrative systems and
processes;
• (ii) legislative and regulatory framework and
guidelines;
• (iii) distinctive leadership at the national level
• Little to no strategic vision of public procurement;
• (iv) Weak Human Resource in Public sector

9. Country Systems and
Market Operations

10. CARIBBEAN PUBLIC PROCUREMENT MATRIX
Shillingford-Gayle Scale: It does not exist 0; It exists in draft form; It is not yet implemented and or it does not impact on the operations of the system. 1; It may exist but it is weak
2; It exists. Its use is not mandatory hence occasional. It cannot always be found. It does not always work. It needs updating. 3; It exists; It is used. It functions though not exactly as
it should. It needs strengthening to do a better job. It is on the right track. 4; It exists. It has the qualities of and functions according to good international practices. 5
INDICATOR COUNTRY Indicator Average
AB
BAH
BAR BEL DOM GND GUY HA JA SKN SLU SVG SUR TT
Start of Reform 2008 2011 2010 2011 2008 2008 2000 1999 1998 2008 2008 2008 2011 2012
Legislative and regulatory
Framework
4 1 1 0 1 1 4 4 4 1 1 1 1 1 1.8
Complaints Mechanism 0 0 2 0 0 0 0 2 4 0 0 0 0 0 .6
Standard Bidding Documents 0 0 0 0 0 0 4 3 5 0 0 0 1 0
1
Regulations and guidelines 0 0 0 0 0 0 5 5 5 0 0 0 1 1 1
User guide or Manual 0 0 0 1 0 0 4 3 4 0 0 0 1 1 1
Institutional Framework and
management Capacity
0 0 0 0 0 0 2 2 5 0 0 0 0 0
.6
Normative or regulatory Body 0 0 0 0 0 0 1 3 4 0 0 0 1 1
.7
Central or accessible system
providing procurement information
0 0 0 0 0 0 2 2 3 0 0 0 1 1
.6
Electronic Information System 0 0 0 0 0 0 2 2 4 0 0 0 1 1
.7
Capacity Building Program 0 0 0 0 0 0 0 0 4 0 0 0 1 1 .4
Procurement Operations and
Market Practices
2 2 2 2 2 2 2 2 4 2 2 2 2 2
2.1
Training of Government and
Private Sector
0 0 0 0 0 0 0 0 3 0 0 0 1 1
.4
Tools and Technology 1 1 1 1 1 1 1 1 3 1 1 1 1 1 1
Records Safekeeping 1 1 1 1 1 1 1 1 5 1 1 1 1 1 1.3
Integrity and Transparency of the
Public Procurement System
1 1 1 1 1 1 1 1 5 1 1 1 1 1
1
Audit and Control systems 1 1 1 2 1 1 1 1 5 1 1 1 1 1 1
Appeals Mechanisms 0 0 0 0 0 0 2 2 5 0 0 0 0 0 .6
Access to Information 0 0 0 1 0 0 1 1 4 0 0 0 0 1 .5
Anti-Corruption Bodies 0 0 0 0 0 0 0 0 5 0 0 0 0 3 .5
Code of Ethics 0 0 0 4 0 0 0 2 5 0 0 0 0 2 1
Public is engaged and interested in
the integrity of the system
1 1 1 1 1 1 3 1 5 0 0 0 3 4
1.5
Country Average 0.5 0.4 0.4 0.7 0.4 0.4 1.7 1.8 4 0.3 0.3 0.3 0.9 1.1

11. Panoramic View
IND AB BH BA BE DM GN GY HA JA SK SL SV SU TT
LR
CM
SBD
RG
UGM
RB
SY
EI
CB
T
TT
RS
A
AP
AI
AC

12. Value of Procurement Market
Country GDP 15% 20% 30%
Antigua and Barbuda 1.22 0.183 0.244 0.366
The Bahamas 8.373 1.25595 1.6746 2.5119
Barbados 4.262 0.6393 0.8524 1.2786
Belize 1.637 0.24555 0.3274 0.4911
Dominica 0.495 0.07425 0.099 0.1485
Grenada 0.811 0.12165 0.1622 0.2433
Guyana 3.02 0.453 0.604 0.906
Haiti 8.287 1.24305 1.6574 2.4861
Jamaica 14.389 2.15835 2.8778 4.3167
Montserrat 0.04378 0.006567 0.008756 0.013134
St. Kitts and Nevis 0.767 0.11505 0.1534 0.2301
St. Lucia 1.377 0.20655 0.2754 0.4131
St. Vincent and the Grenadines 0.742 0.1113 0.1484 0.2226
Suriname 5.009 0.75135 1.0018 1.5027
Trinidad and Tobago 27.13 4.0695 5.426 8.139
Total 77.519 11.62785 15.5038 23.2557

13. Challenges to Procurement
o High debt
o procurement systems under-developed
o Weak human resource capacity
o Limited supplier base
o Segregated Market
o Limited use of modern technology and
techniques: e.g. e-procurement, framework
agreements
o Inadequate procurement planning

14. Debt to GDP Ratio

15. Case of the Organization of Eastern Caribbean States (OECS)
Pharmaceutical Procurement Service (PPS)
- Sub group of 9 states within CARICOM with
total population of 550K-
- pooled procurement of pharmaceuticals
through PPS
- PPS established in 1986 by 1989 self sufficient
- Since 2012 – procurement via e-proc. system
- Current Average Annual Savings of 30%
- Average purchase value US$ 21M

16. OECS Pharmaceutical Procurement Service (PPS)
Financial Arrangements
• Revolving drug fund
• Payments by ECCB
- Common currency
- Int’l credibility of bank
- Stability of EC$ vs US$

17. Country submits
requisition to PPS
PPS places
Order to Supplier
Supplier ships
directly
to consignee
Country receives
Goods and inform
PPS
Ordering Process
OECS Pharmaceutical Procurement Service (PPS)

18. Much Bigger Market Than Assumed
• It is 57 % of the amount spent ($26B) by the World
Bank in 168 developing countries in 2013
• Larger than the value of projects approved by the
IDB in 2012. IDB approved 169 projects for $11.4 B.
• $15B identified at risk in Indonesia. $50M invested
through MCC to modernize procurement.
• It compares to the GDP of Senegal, Georgia,
Mozambique and Papua New Guinea.
• $15B PP in CARICOM is imprisoned in a segregated
market under poor procurement conditions
• $15B should turn heads

19. Procurement Market Share

20. Possible Savings
• apply internationally accepted best practices -save
between 20% to 25% of the total procurement- in
CARICOM equivalent to about US$3.75 billion
annually.
• US$3.75 billion could impact on the five year
regional average negative balance of payments of
US-$1.5234 billion
• implementing a program of strategic and pooled
procurement the CARICOM region stands to save
at least 30% on goods and services.

21. Conclusion
• Small Size does not indicate small
Value
• Small Size does not mean constant
vulnerability
• OECS PPS Case Study
demonstrates both preceding
points

22. Going Forward

23. Operationalize the Regional Procurement Regime
Implement:
1. Community model law
2. Capacity Building and Training
3. Electronic Procurement Regional Information System
4. Professionalization of Procurement Staff
5. Permanent Joint Council on Procurement
6. Joint Bidding Facility
7. Standard Bidding Documents
8. Supplier Registry
9. Catalogue of Goods
10. Permanent Committee on Procurement
11. E-enabling legislation
12. Framework for procurement administration

24. “Do Not Send To Ask For Whom the
Bell Tolls”
• Implement Regional regime; Use as a platform for
trade negotiation
• Enhance participation of Small Businesses
• Agree on Regional Thresholds and open the
CARICOM Market
• Awaken Civil Society through Transparency
• More Coordinated IDP approach
• Use a problem Driven Approach to procurement
related challenges facing the region

25. Problem Driven Approach
# Problem Impact Opportunity
1 Domestic Market Size • diseconomies of scale;
• Limited competition
• High prices
Amalgamate the market
2 Limited Transparency
Obligations
• Limited Publicity and advertisement;
• Limited market access
• Narrowly informed civil society
Establish regional transparency thresholds to facilitate
opening of the now segmented US$15 Billion Public
Procurement Market
Establish regional public procurement notice board
3 Lack of Strategic
Procurement
• Procurement is fragmented and has been subsumed
under Finance and Administration or Audit Acts.
Policies developed to address finance and
administration concerns;
• High costs of the majority of goods and services.
Reclassify procurement from an administrative function
to a strategic function.
Consolidate and pool procurement of certain
goods/services through a central fully capacitated
entity.
4 High cost of goods
including
pharmaceuticals and
school text books
• Shrinking budgets due to fiscal constraints;
• Low quality products provided to consumers;
• Inadequate supply of goods
Pool Procurement in Pharmaceuticals and other feasible
areas
6 Low number of bidders • Unequal access
• Few contractors control the bulk of the market
Develop harmonized electronic procurement system;
Advertise all opportunities above US$50,000
Regionally
7 Weak Human resources
capacity
• Inadequate supply of trained persons to manage
procurement;
• Frontline workers provide low level service to
private sector;
• Inefficient spending
Professionalize Public Procurement
Train personnel in public procurement, project and
contract management, by sector
Partner with a regional institution such as the UWI to
develop a sustainable training program (diploma,
certificate, degree) in public procurement;
UWI to partner with national universities and colleges
to provide diploma training.

26. Problem Driven Approach II
# Problem Impact Opportunity
8 High Cost of Electronic
systems.
• Multiple donor funded national initiatives:
• Failure to maximize scarce resources
Pool national and donor resources to develop regional or
interoperable harmonize national systems
9 Small businesses
participating minimally in
procurement
No incentives for small
businesses
• Concern that Small Businesses may lose market
share and not survive competition;
• Small business sector not benefitting from
government support:
• Unable to make sustained contribution to
economic development
Develop small business laws and policies to legally support
small business,
Establish a carve out for vulnerable groups, local content,
community procurement and women in business, and use them.
Establish Joint Bidding Facility
10 Lack of donor
coordination for more
than diagnostics
• Multiple simultaneous initiatives, some of which
do not take into account legally binding regional
mandates;
• Strain on already limited human capacity
Engage with donors as a region on cross-cutting, common
issues;
Recognize and support regional obligations for a single
harmonized procurement system.
11 Limited to no
involvement of Civil
Society
• Limited accountability to citizens;
• Limited demand for transparency of process and
award;
• Lack of commitment to shared responsibility for
development
Bring civil society into the fold of discussion and accountability
regarding national and regional development and management;
Conduct country by country awareness campaigns
12 Lack of Institutional
capacity
• Institutional framework inadequate to meet current
procurement demands
Institution building/ strengthening both at the national and
regional level through benchmarking within and outside the
region
13 Lack of Collection of
Statistical Data
• Absence of key economic and planning
information decisions not based on empirical
evidence;
• Lack of Business Intelligence
Implement harmonized e-procurement system region-wide;
Implement other electronic PFM tools that collect data
14 Absence of a unified
codification system
• Barrier to market access and regional coordinated
procurement
Agree and implement common codification system
15 Absence of Regional • Lost opportunity for coordinated research, Establishment of an Observatory