The World Bank Group issued the 2017 edition of its yearly Benchmarking Public Procurement report earlier this month.
The report collects and analyzes data from procurement experts and practitioners across the globe, with the goal of determining the ease with which private sector companies enter and navigate domestic public procurement markets.
The report focuses on two thematic pillars — the procurement life cycle and complaint review mechanisms, broken down into eight key areas, selected for their critical importance to bidders. Carefully drafted data points provide a snapshot of how each of the 180 countries perform in those eight areas.
For instance, when dealing with the bid submission phase, the Benchmarking Public Procurement report looks at the possibility for bidders to submit their bids online as well as the requirement to post bid security, among other topics. When looking at the first-tier review of a procurement dispute, the report looks at the cost incurred by the plaintiff to file its complaint and the timeframe for the reviewing entity to deliver a decision.
The claimed added value of the project is its capacity to provide a basis for comparison of public procurement systems at the global level. This is made possible by an elaborate methodology and the selection of case study assumptions that support the collection of streamlined, standardized data. As such, the study aims not only to be a guide for companies that consider doing business with the government, but also a reliable comparative tool for policy makers looking for inspiration in their procurement reform agenda.
Considering the positive impact that the World Bank’s Doing Business report has had on policy making in its nearly 15 years of existence, the World Bank also views the Benchmarking Public Procurement report as a powerful incentive for countries to adopt globally recognized good practices in the field of public procurement.
An event organized jointly by the World Bank and the U.S. Chamber of Commerce for the launch of the report featured public procurement experts from diverse backgrounds. A series of panels gathered government ministers, private sector companies, academics, as well as executives from the World Bank and fellow international organizations, each bringing their own views on the top priority and challenges facing public procurement globally.
While topics like procurement digitalization occupied a significant portion of the conversation, panelists kept coming back to the eternal challenges of transparency and efficiency of procurement systems, and their direct impact on competition. One referred to a recent article from the Economist that said 17 percent of calls for tender in Europe received only one bid in 2006, and by 2015, that figure had risen to 30 percent.
But access to information is an ever-occurring challenge. When it comes to regulatory frameworks, panelists explained that, very often, the volume of rules weigh heavily on the process and becomes a source of confusion for bidders. The same was said about bidding documents, often complex to decipher and rarely conveying in a clear manner the expectations of the procuring entity calling for tenders.
One panelist joked that in some countries, the rules are so complex that a bid that is complete and flawless should raise suspicions of impropriety.
Bidders’ access to information throughout the procurement process is also a significant challenge. The importance for bidders to understand why they did not win a contract is critical if procuring agencies want them to keep responding to calls for tender. It is also an issue of fairness, considering that companies invest significant time, as well as human and financial resources to prepare a bid.
Yet the Benchmarking Public Procurement report shows that in 32 economies, bidders do not obtain feedback on why they did not win the procurement contract. It also shows that nearly a third of the countries evaluated do not publish result of the adjudication process online.
Speakers concurred that a study like the Benchmarking Public Procurement report has the potential to significantly improve efficiency in procurement markets, an area where precise data, both at the micro and macroeconomic levels, is severally lacking. Several of them suggested that the study should aim to capture the gap between the content of procurement rules and what happens in practice, all the while acknowledging the complexity of such an exercise.
Public procurement is known to be a field where rules are poorly implemented, and an analysis of this gap would certainly be the first step to better understand the cause of this. However, it requires that governments collect extensive data and statistics, including precise figures pertaining to time, costs and procedures.
Very few countries collect such information. Panelists explained that the digitalization of the procurement function, in addition to boosting efficiency for both the supply and demand sides of public procurement, would also be the key for policy makers to access valuable data that can inform smart policy making.
More information on the Benchmarking Public Procurement report, data and previous reports is here.
Elisabeth Danon is a Senior Adviser at the Montreal office of KPMG. She previously worked at the Anti-corruption Division of the OECD, and more recently at the World Bank as a legal analyst. She can be contacted here.
It is interesting and a shame that the benchmark methodology used by the World Bank does not include any kind of evaluation of the country's whistleblower law or policy relevant to the procurement process. This is an important element of any public or private procurement system. The Bank knows this, since even its own internal whistleblower reporting data relevant to its own procurements clearly shows that the procurement process is the subject of more whistleblowing complaints than any other kind of complaint. However, it should be noted that the Bank has not evaluated its own whistleblower system either. I hope the Bank will consider, or perhaps reconsider, the important role that whistleblowers can or could play in making the procurement process fairer, more transparent and more accountable.
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