This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
The World Bank has a long track record of applying universally relevant benchmarks for assessing public procurement practices in a broad range of jurisdictions. The following World Bank reports illustrate the importance of assessing procurement practices at a jurisdictional level to better understand how systemic issues may be impacting procurement success at the institutional and project levels. These reports provide universally useful observations since they offer benchmarks that can assist all institutions in understanding how their own practices measure up to common global governance standards.
For example, in its August 2010 review of Ghana’s procurement operations, the World Bank noted that in 2007 “the magnitude of resources involved in public procurement in Ghana is estimated at over 17 percent of [gross domestic product (GDP)] and around 80 percent of tax revenue”, which underscores the importance of a transparent and efficient public procurement system in obtaining value-for-money, encouraging investment and innovation, and reducing corruption.
In Ghana, as in most jurisdictions, government procurement reflects a significant part of GDP, so the efficiency of the government procurement process significantly impacts the performance of the overall economy. The report notes substantial progress in strengthening public procurement through the enactment of the Public Procurement Act, the establishment of the Public Procurement Authority, the development of standard bidding documents, and the creation of an appeals and complaints panel. The World Bank also noted progress in the development of a software package for procurement planning, training modules for public officials, and tools to collect and assess data on compliance and performance. However, the World Bank recommended further amendments to existing laws and regulations to provide greater clarity in tendering thresholds, procurement methods, and process rules; the stronger regulation of direct awards; the bolstering of bidder appeal rights; and better debarment procedures. As this report illustrated, procurement process improvements are not a one-time event. Rather, they require an ongoing sustained commitment by senior government officials in order to better ensure that procurement systems continue to operate effectively.
Furthermore, in its January 2012 review of the procurement of water sanitation services by local governments in Pakistan, the World Bank noted the need to develop simplified guidelines for local-level procurement, as well as more active participation by civil society to enhance transparency and accountability. In particular, the World Bank recommended the development of a legal framework for local procurement; the development of user-friendly and legally compliant standard bidding and contract documents; an increase in internal capacity building and training; the promotion of greater awareness of procurement rules and procedures; and the development of an efficient procurement complaints process. While this report may have focused on local government bodies in Pakistan, many institutions worldwide need to update their practices in those same areas and can leverage the World Bank recommendations to help inform their own procurement governance initiatives.
Similarly, in its May 2012 review of Sierra Leone’s procurement practices, the World Bank found ongoing weaknesses in the legal framework for public procurement, including a lack of adequate enforcement mechanisms, a lack of co-ordination in public financial management, inadequate transparency, and high levels of corruption and patronage. The report noted that in 2010 close to 50 percent of the government’s $342 million annual budget, which represented 16 percent of GDP, was spent through public procurement processes. The report states that the “government’s priority therefore, is to put in place sound public financial and procurement management systems that ensure maximum levels of efficiency, value for money, transparency and fairness in competition.” The World Bank recommended an update to the procurement manual and standard bidding documents, as well as reforms to procurement laws and regulations to better define overall procurement methods and tendering practices, including protocols for managing overbudget bids and bidder debarment. The report also recommended the creation of an independent procurement review panel, the co-ordination of financial controls to link the budget approval process to the award of any government contracts, and improvements to internal audit functions within public institutions. Finally, the report identified a need to upgrade the skills of procurement staff and to increase their remuneration to better ensure staff retention. While they may have been directed at the procurement governance in Sierra Leone, these World Bank recommendations provide benchmarks for other jurisdictions and institutions to measure their own procurement practices.
Finally, in its May 2013 report on Tajikistan, the Word Bank performed a follow-up review to assess progress since the post-civil-war government launched a procurement modernization initiative in 1997 that included a new procurement law aimed at introducing efficiency, transparency, fairness, and value-for-money into the public procurement system. The World Bank’s 2013 report took a snapshot of ongoing progress, identifying areas that required improvement in the legislative and regulatory framework. The report recommended a review and revision of various legislative instruments to ensure that they were “comprehensive, coordinated and current” and found a need “for better integration of procurement reforms with a broader governance reform agenda, including public administration, PFM, audit and accountability, and anti-corruption matters”, as well as further improvements on procurement procedures, “including planning, budgeting, delegation, and approval mechanisms.” These World Bank recommendations highlighted challenges in the co-ordination of procurement activities that are common across all jurisdictions and within all public institutions.
Furthermore, the World Bank’s 2013 Tajikistan report identified an inherent conflict between the role of the Public Procurement Authority as regulatory function and its direct involvement conducting procurements on behalf of government entities. This is a common issue within all public institutions in their ongoing need to balance compliance and efficiency within their procurement cycles. The World Bank recommended a division of these functions within government. The report also recommended the implementation of a data collection strategy for procurement data, and the execution of a procurement capacity needs analysis. The World Bank also recommended the hiring of dedicated procurement staff rather than having the function assigned to other public officials as a secondary task, as well as the introduction of an e-procurement strategy, and a stronger code of conduct for civil servants.
With a view to future improvements, the Wold Bank’s 2013 Tajikistan report recommended the creation of a public procurement performance improvement group to focus on continuous improvement, the implementation of a broader procurement training program, and the preparation of a contract management manual. It also recommended the integration of procurement planning into the budget cycle to provide entities that received budget allocations timely advance warning to properly implement their procurement plans so they can apply strategic procurement practices. While specific to Tajikistan, these same recommendations are relevant to public institutions across all jurisdictions, providing guidance on the improvement of procurement governance practices.
In summary, while the recommendations contained in these World Bank reports may focus on specific jurisdictions, many of the recommendations are universal in their relevance since the governance gaps identified in those jurisdictional reviews are common around the globe and identify the systemic issues that can impact proper procurement practices in any public institution. Senior decision-makers who are serious about improving their own procurement practices would therefore be well served by reviewing the global standards referred to in World Bank procurement assessment reports and leveraging those recommendations for their own purposes.
