Procurement Case Study - Chile
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Application of the OECD/DAC assessment methodology: Chile’s CPAR Jorge Claro, President and CEO International Procurement Institute, INPRI
Country Procurement Assessment Report (CPAR)
Execution of loans/grants are carried out generally observing the policies of the MDBs There is intention to utilize national systems
MDB’s Country Assistance Strategies must include procurement considerations The CPAR is the most important tool to determine the soundness of a national system, allowing MDBs to assess a country’s ability to successfully execute the projects
Chilean Setting
The process started in 2007 but budgetary constraints and bureaucratic hurdles delayed its start until 2008
2009 is an election year in Chile and the political climate has changed as government priorities have shifted What was a priority and had a champion in 2007 lost its momentum
Chilean Setting
MDBs leverage in Chile is limited
The Government has easy access to International Capital Markets IADB made a loan to Transantiago, the Santiago Public Transportation System.
The loan was declared unconstitutional
Chilean Setting
Transantiago is the subject of a major domestic dispute amongst parliamentary factions, centering on effectiveness, rate increases and sources of funding for the system. It has affected IDB’s position in the country
The loan has not been repaid
Chilean Setting
The CPAR must be negotiated at the highest levels of government
Procurement authorities may have their own perspectives or agendas
Chile is not a member of the OECD, but has expressed an interest in joining
Setting
The OECD/DAC methodology is
Highly Participatory
Many stakeholders have to be identified Represents a serious investment of time and resources, and the participation of many public officials requires political will
Somewhat rigid, missing nuances of the procurement process
Market Conditions Legal Aspects
Key Players
Government of Chile
Ministry of Finance Procurement Authority Ministry of Works Ministry of Housing Supreme Audit Entity
IADB/WB Team
Bank Staff Local Consultants
Legal Consultant Economists Procurement Specialists
International Consultants
Procurement Specialists
Key Players
ChileCompra Users
All Ministries Decentralized Entities Armed Forces Local and Regional Governments Vendors and Suppliers
Small and Medium Enterprises Importers and
Organized Constituencies
Chambers of Commerce Professional Associations
Media Pro-OECD Lobby
Issues
The OECD/DAC Methodology is not applied in a vacuum Participation from all sectors and stakeholders is essential
Identifying all of them is difficult Only a strong central authority will have the authority to convene them
Delays caused initial levels of participation and ownership to wane
Issues
Procurement authorities play a critical role in validation workshops
A procurement strategic plan for 2008 – 2012 was published without inputs from the CPAR
CPAR findings that differed from or meant changes to the plan would have been controversial
Attitudes towards the exercise set the tone
Willingness to learn from others and address problems is essential, but can be constrained by the desire to obtain the best possible grade for a system that is perceived as adequate
Issues
Limited budget had impact on depth and breadth of audit samples and regional coverage
Sample selection requires country knowledge and is key to exercise
Issues
When systems are perceived as poor, Governments are more amenable to finding problems and identifying solutions When systems are perceived as adequate, Governments prefer not to identify issues and leave the system as-is, as priorities lay elsewhere
Chile is perceived internally as having a very good system and is regarded as the standard-setter in the region
Approaches
The OECD/DAC Methodology appears to be more applicable to emerging economies than to developed countries
The WB/IADB team had to reconcile the OECD/DAC’s scientific rigor to the realities of a highly charged political scenario
Approaches
The WB/IADB team had to find ways to produce a CPAR after the validation workshops yielded results that contradicted the initial findings of the local consultants
Outcome
The CPAR was completed in 2008 and the draft report is currently undergoing revisions (May 2009) Though the exercise was successful, opportunities for a more in-depth discussion on present and future issues and further refinement of the system could, perhaps, have been exploited further
The end Comments and questions are welcome Jorge Claro President and CEO INPRI 10708 Lady Slipper Tr. North Bethesda, MD 20852 Tel 301 230-9011 [email protected]
Country Procurement Assessment Report (CPAR)
Execution of loans/grants are carried out generally observing the policies of the MDBs There is intention to utilize national systems
MDB’s Country Assistance Strategies must include procurement considerations The CPAR is the most important tool to determine the soundness of a national system, allowing MDBs to assess a country’s ability to successfully execute the projects
Chilean Setting
The process started in 2007 but budgetary constraints and bureaucratic hurdles delayed its start until 2008
2009 is an election year in Chile and the political climate has changed as government priorities have shifted What was a priority and had a champion in 2007 lost its momentum
Chilean Setting
MDBs leverage in Chile is limited
The Government has easy access to International Capital Markets IADB made a loan to Transantiago, the Santiago Public Transportation System.
The loan was declared unconstitutional
Chilean Setting
Transantiago is the subject of a major domestic dispute amongst parliamentary factions, centering on effectiveness, rate increases and sources of funding for the system. It has affected IDB’s position in the country
The loan has not been repaid
Chilean Setting
The CPAR must be negotiated at the highest levels of government
Procurement authorities may have their own perspectives or agendas
Chile is not a member of the OECD, but has expressed an interest in joining
Setting
The OECD/DAC methodology is
Highly Participatory
Many stakeholders have to be identified Represents a serious investment of time and resources, and the participation of many public officials requires political will
Somewhat rigid, missing nuances of the procurement process
Market Conditions Legal Aspects
Key Players
Government of Chile
Ministry of Finance Procurement Authority Ministry of Works Ministry of Housing Supreme Audit Entity
IADB/WB Team
Bank Staff Local Consultants
Legal Consultant Economists Procurement Specialists
International Consultants
Procurement Specialists
Key Players
ChileCompra Users
All Ministries Decentralized Entities Armed Forces Local and Regional Governments Vendors and Suppliers
Small and Medium Enterprises Importers and
Organized Constituencies
Chambers of Commerce Professional Associations
Media Pro-OECD Lobby
Issues
The OECD/DAC Methodology is not applied in a vacuum Participation from all sectors and stakeholders is essential
Identifying all of them is difficult Only a strong central authority will have the authority to convene them
Delays caused initial levels of participation and ownership to wane
Issues
Procurement authorities play a critical role in validation workshops
A procurement strategic plan for 2008 – 2012 was published without inputs from the CPAR
CPAR findings that differed from or meant changes to the plan would have been controversial
Attitudes towards the exercise set the tone
Willingness to learn from others and address problems is essential, but can be constrained by the desire to obtain the best possible grade for a system that is perceived as adequate
Issues
Limited budget had impact on depth and breadth of audit samples and regional coverage
Sample selection requires country knowledge and is key to exercise
Issues
When systems are perceived as poor, Governments are more amenable to finding problems and identifying solutions When systems are perceived as adequate, Governments prefer not to identify issues and leave the system as-is, as priorities lay elsewhere
Chile is perceived internally as having a very good system and is regarded as the standard-setter in the region
Approaches
The OECD/DAC Methodology appears to be more applicable to emerging economies than to developed countries
The WB/IADB team had to reconcile the OECD/DAC’s scientific rigor to the realities of a highly charged political scenario
Approaches
The WB/IADB team had to find ways to produce a CPAR after the validation workshops yielded results that contradicted the initial findings of the local consultants
Outcome
The CPAR was completed in 2008 and the draft report is currently undergoing revisions (May 2009) Though the exercise was successful, opportunities for a more in-depth discussion on present and future issues and further refinement of the system could, perhaps, have been exploited further
The end Comments and questions are welcome Jorge Claro President and CEO INPRI 10708 Lady Slipper Tr. North Bethesda, MD 20852 Tel 301 230-9011 [email protected]
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