1 / 31

Public Procurement – Existing Constraints and How to Overcome Them

Public Procurement – Existing Constraints and How to Overcome Them. Predrag Jovanovic, Ph.D. Key indicators. In 2006, the total value of registered public procurement contracts – 2 billion Euro In the five year period (2002-6), the average contract value increased fivefold

shelly-chen
Download Presentation

Public Procurement – Existing Constraints and How to Overcome Them

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Public Procurement – Existing Constraints and How to Overcome Them Predrag Jovanovic, Ph.D.

  2. Key indicators • In 2006, the total value of registered public procurement contracts – 2 billion Euro • In the five year period (2002-6), the average contract value increased fivefold • Since 2003, the number of contracts reported to the PPO is steadily decreasing

  3. Table 1 *Reports covered period July 13 – December 31, without local self-government, since local self-government started to implement the PPL since January 1, 2003, according to the Article 148 of the PPL.

  4. Key indicators • In 2006, the total value of registered public procurement contracts – 2 billion Euro • In the five year period (2002-6), the average contract value increased fivefold • Since 2003, the number of contracts reported to the PPO is steadily decreasing

  5. Table 2

  6. Table 3 * Purchasing entities **According to the Article 148 of the PPL, local self-government started to implement the Law since January 1, 2003

  7. Table 4 * Reports covered period July 13 – December 31, without local self-government, since local self-government started to implement the PPL since January 1, 2003, according to the Article 148 of the PPL

  8. Two phases First phase (2002-4) • Share of competitive procedures – rating A • Strong competition – an average number of bidders per tender 7 to 8

  9. Two phases Second phase (2005-6) • Share of competitive procedures – rating B • Weakening competition – an average number of bidders per tender 5

  10. Key factors • Inefficient control • Absence of sanctions for breaking the Law

  11. Main goals • Establishing of a modern monitoring and control concept in public procurement • Redefinition of roles and tasks of relevant institutions • Strengthening of human and financial capacities of the relevant institutions

  12. Major obstacles to an efficient control in public procurement • Control function relies on “ex ante” opinions of the PPO, as well as on the checking of purchasing entities’ reports submitted by the PPO • Key weakness – PPO is unable to check reliability of data and claims in the reports and requests

  13. Solutions • Monitoring and control functions should be undertaken by institutions that are authorized to check reliability of information provided by purchasing entities, i.e. that are authorized to do “on site” control • The system of monitoring and control should rely on the following institutions: 1) Internal review units 2) Supreme Audit Institution 3) Budget inspection

  14. Solutions • Bidders should have significant role in external control of purchasing entities by using mechanism of protection of bidders’ rights and Commission for Protection of Rights

  15. Solutions • Establishing of an efficient system of sanctioning officials responsible for irregularities and of those refusing to provide information • Strong preventive effect

  16. Solutions • Redefining a role of the PPO by transforming its control function through: A) elimination of PPO approvals based on requests and reports of PE and B) much higher PPO involvement in system developing functions

  17. Solutions Redefinition of the PPO role would: A) Put its operations in line with its capacities thus reducing a huge existing gap and B) Improve the key component of internal capacities enabling qualitative upgrading of HR capacities of the PPO

  18. Basic elements of PPO redefined role • To put the procurement function on the political map, so that it is recognized as a key strategic factor in the provision of efficient services to the public at lowest possible cost; • To ensure that procurement is mainstreamed into the centre of the budget and public expenditure process; • To attract adequate professional procurement expertise and increase the status of the procurement profession

  19. The role of the PPO in the monitoring and control process should be: • Preparation of an annual report to the government on the functioning of the national public procurement system and • Quarterly collection of data on awarded contracts, analyses of the data and sending to the SAI and to the Budget inspection information relevant for the control of the PE they undertake, such were: highest value contracts, list of PE that awarded contracts above certain value, inconsistencies in PE reports etc.

  20. Basic elements of PPO redefined role • Systematic support to the purchasing entities in developing their public procurement capacities through development of guidance systems and operational tools – Internet and paper‑based – for managing all phases of the procurement process, e.g. standard forms of public notices, models of tender documentation, models of general contracts.

  21. Basic elements of PPO redefined role • Establishing a specialized Internet-based portal with tender and award notices, including the processing of notices, information and guidance system to support the procurement community, including guidance documentation, model tender and contract documentation, interpretative and commentary communications.

  22. Basic elements of PPO redefined role • To act as a national contact point for the European Commission for questions and enforcement proceedings on the basis of article 226 of the EC Treaty; • To participate, either as a representative of an institution or as an individual expert, in international networks, such as the European Public Procurement Network (PPN); • Co‑operation with corresponding institutions in other countries.

  23. Basic elements of PPO redefined role • Facilitation and co‑ordination of framework agreements in government sectors and municipalities; • Development of systems and methodologies for e‑procurement; • Introduction of systems for performance measurement of public procurement.

  24. Relevant documents • “Baseline for Strategy of Upgrading Public Procurement System in Serbia”, OSCE and Public Procurement Office, June 2006 • “Central Public Procurement Structures and Capacity in Member States of the European Union”, SIGMA paper no. 40, March 2007 • Redefining a Role and Tasks of the Public Procurement Office in line with EU Standards and Good Practice, OSCE, May 2007

  25. Time dimension • In 2004, the key weaknesses in control mechanisms of the PP system were identified by the PPO and reported to the Government, such were: 1) the absence of “on site” control if data provided by PE are reliable or not and 2) absence of any sanctions for breaching the rules.

  26. Time dimension • In 2005 and 2006 effects of inappropriate and inefficient control system became visible in real life sphere • It is realistic to expect that immediate proper measures result in changes of PP market real life indicators after two years (i.e. in 2009 – 2010)

  27. Concrete measures • Urgent amendments of the PPL aimed to upgrade mechanism of monitoring and control in PP and related changes of the PPO’s role in that process, as well as change in the status of the Commission for Protection of Rights; • Determined political support to establishing of a system of internal-external audit and control

  28. Concrete measures • Establishing Supreme Audit Institution and Internal Review Units • Providing support to the PPO and CPR in developing of their capacities, primarily HR and financial

  29. Table 5HR capacities of the PPO (2003-7)

  30. Table 6Financial capacities of the PPO and CPR (2003-7)

  31. Table 7Comparative data on Public Procurement Office’s annual budgets in Euro Serbia Slovakia Hungary 2002 / 1,339,586 1,800,000 2003 258,440 1,302,358 2,900,000 2004 223,801 1,489,993 3,800,000 2005 294,164 1,590,847 4,100,000 2006 341,837 1,958,172 4,300,000

More Related