icegov2012 proceedings

Impacts of the Public Procurement Reform in Chile on the
Municipal Level
Gastón Concha
University of Santo Tomás
Vergara 301, Piso 3
Santiago, Chile
562.938.4609
gconcha@santotomas.cl
ABSTRACT
This study measures the impact that the Reform of the System of
Public Procurement, driven by Chile’s central government, had in
the municipalities. Traditionally, local governments present
unequal development, at least in terms of the level of resources
and the size of population looked after. Moreover, many studies
show that municipalities have lead the ranking in the perception of
corruption in Chile. Two hypotheses were proposed. The first is
that the impacts and benefits, that the Information and
Communication Technologies (ICTs)-driven reform have had on
public procurement tend to be less than desired. The second
affirms that an e-procurement system can significantly augment
the level of transparency; however, an automatic reduction in the
level of corruption will not be apparent. The study was based on
two surveys conducted with municipality buyers and vendors.
Corruption and transparency were chosen as the primary focus.
Other impacts measured include the efficiency of the internal
processes, cultural aspects and normative and institutional aspects.
The most relevant conclusions were two - the reform of public
procurement in Chile increased the level of transparency; and the
greatest transparency perceived in purchasing processes has not
shown a lessening in the level of corruption.
Categories and Subject Descriptors
H.4.0 [Information System Applications]: General; C 4.0
[Performance System]: Measurement techniques
General Terms
Management, Masurement, Performance, Human Factors,
Standardization, Legal Aspects
Keywords
E-Procurement; Municipalities; ICT; Impact
Permission to make digital or hard copies of part or all of this work for
personal or classroom use is granted without fee provided that copies are
not made or distributed for profit or commercial advantage and that copies
bear this notice and the full citation on the first page. Copyrights for
components of this work owned by others than ACM must be honored.
Abstracting with credit is permitted. To copy otherwise, to republish, to
post on servers or to redistribute to lists, requires prior specific permission
and/or a fee.
ICEGOV '12, October 22 - 25 2012, Albany, NY, USA
Copyright 2012 ACM 978-1-4503-1200-4/12/10...$15.00
440
Roberto Anrique
Business Technology Group
Apoquindo 6410, Of. 212
Las Condes, Santiago, Chile
569.9318.3918
roberto@btg.cl
1. INTRODUCTION
Public procurement mobilizes millions of dollars annually and
fosters the development of private enterprises and public
organizations. It approves large budgets that are sometimes spent
on initiatives of questionable value. It awards big bids on public
works to companies that are regularly questioned by the public
opinion. In particular, it appears that a sense of “false
transparency” persists in the processes of purchases and awards
and in the quality of concrete results.
To the extent that the public procurement is more transparent to
the community, the sensitivity and the critical mindset grows, so
is the case of the municipalities.
According to the portal of the System of Procurement in Chile, the
total amount of the procurement generated by the municipalities
in Chile during 2009 corresponded to approximately 21% of the
total compromised 1 . In the year 2009 the total sum of the ordered
procurement reached $6,200,000 US dollars. That corresponds to
$1,630,000 in purchasing orders.
In the particular case of Chile, there has been a profound change
in the processes of public procurement. New institutions have
been created. These include the Dirección de Compras y
Contrataciones Públicas and the Tribune of Public Contracting. A
unique registry of state vendors has also been created. The register
is administered by a private entity (Chileproveedores).
Information technologies have been introduced to the processes of
procurement, electronic catalogues for products and convenient
frameworks agreements have been generated, and new vendors
have been incorporated and trained. At the same time there exists
a very significant advance in the transparency of public
procurement. However, doubts persist with respect to the true
impact of the reduction of corruption and the use of privileged
information in the processes of acquisition, as well as the
continuation of “favorite vendors” that make it difficult to have an
environment of truly free competition. In the same sense the
results of various surveys about technical organizations such as
the CERC, CEP and the Instituto de Libertad y Desarrollo are
worrying, as they show these institutions are among the most
corrupt in the country.
Confusion exists in many cases with respect to the impact on
small-scale vendors. There are those who indicate that
opportunities are opened for the SME (small and medium-sized
1 Source:Chilecompra, 2009.