Friday_915 Public Procurement Reforms_bigart

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

Importance of Procurement  Public Procurement systems are at the

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

What’s Procurement Got to do with It?  Percentage of GDP  Economy, Efficiency and Value for Money  Service Delivery  Foreign Investment in Country  Investment in Building Private Sector

Capacity  Trade Policy – Opening Doors for Growth and Competition

GDP and Percentage of Budget  Overall spending on procurement by

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

Size of Procurement in Selected Countries Country  Global  Angola  Azerbaijan  Bulgaria  Dominican Republic  Malawi  Vietnam

% Total Expenditure  12-20%  58%  34%  30%  20%  40%  40%

Economy, Efficiency and Value for Money  Economy and efficiency are traditional

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

Service Delivery  Many systems are focusing less on the input

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

Foreign Investment  Public procurement helps define the

business environment in a country  Attracting new business investors into the country requires a fair playing field where foreign investors see the opportunity for development and growth

Building Private Sector Capacity  Competition  Partnership  Training  Facilitation  Governance environment  Information

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

governmental protectionist policies

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

and results  Involves stakeholders

What is Procurement Reform?  Creating a sound, transparent and fair

legal framework  Supporting implementation with tools, documents and procedures  Ensuring quality and capacity of those implementing procurement  Sound, transparent and fair governance and public financial management system with full integration

Procurement Reform (continued)  Supporting a competitive market  Feedback mechanisms to ensure that

system remains relevant  Controls and accountability  Access to Information  Reliable partner  Stakeholder involvement

What Lessons have we Learned?  Procurement reform costs money and

takes time  Some reforms can deliver results in the short term  Reform cannot be effective if isolated from broader public sector management and financial management reform  Reforms require long term commitment to achieve sustainable results