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Reforming Public Procurement -- Syquia The BIS helps identify when an element of the national public procurement system meets or exceeds the baseline and where it needs improvement or modification in order to meet the baseline. It is intended to help managers identify where to make changes in order to achieve better performance outcomes, and identify potential risk areas inherent in the existing system by identifying variances from the baseline. On July 17, 2006, OECD-DAC issued a User’s Guide (Version 4) for the BIS, now commonly known as the “BLI,” or “Baseline Indicators”. The BIS divides the key areas of a national public procurement system thematically into four “Pillars” comprising twelve “Indicators.” Each Indicator, in turn, consists of several baselines, or “Sub- Indicators,” that are considered desirable or “good practice” in public procurement. The BIS assessment, thus, takes the form of a checklist, organized as follows: Pillar I – Legislative and Regulatory Framework Indicator 1 – Indicator 2 – The public procurement legislative and regulatory framework achieves the agreed standards and complies with applicable obligations Existence of Implementing Regulations and Documentation Pillar II – The Institutional Framework and Management Capacity Indicator 3 – Indicator 4 – Indicator 5 – Public Procurement legislative and regulatory framework achieves the agreed standards and complies with applicable obligations The country has a functional normative/regulatory body The country has institutional development capacity Pillar III – The Procurement Operations and Market Practices Indicator 6 – Indicator 7 – Indicator 8 – The country’s procurement operations and practices are efficient Functionality of the public procurement market Existence of contract administration and dispute resolution provisions Pillar IV – The Integrity of the Public Procurement System Indicator 9 – The country has effective control and audit systems Indicator 10 – Efficiency of appeals mechanism Indicator 11 – Degree of access to information Indicator 12 – The country has ethics and anti-corruption measures in place The BIS Indicators are premised on the assumption that a good and effective procurement system has the following components: 1. A high-level, omnibus law that establishes the legal foundations for a transparent, competitive, efficient, economical, equitable, accountable and effective public procurement system, applicable to all public procuring agencies, and which provides a single official channel for all forms of procurement, whether for goods, services, civil works or consulting services. 2. Implementing rules and regulations that provide clear guidance and instructions on implementing the omnibus law. 3. A generic procurement manual that serves as a guide for public officials engaged in procurement operations, and a set of standard bidding and contract documents that provides formats for ready application. Fiscal Reform and Economic Governance Project 3
Reforming Public Procurement -- Syquia 4. Sufficient integration between the procurement system and the financial management system so that economy and discipline is fostered, from planning and budget preparation, to procurement and treasury operations for payments – normally characterized by annual and project procurement plans, supported by reliable cost data and timetables. 5. A high-level normative/regulatory body that is responsible for continuous policy formulation that monitors and evaluates the effectiveness of the reforms, and is supported by a technical group or office that is capable of undertaking grounded research that, in turn, provides the inputs for the policies to be generated by the body. Although the OECD-DAC User’s Guide states that what matters most is not the existence of a body itself, but the existence of the functions within the public sector, this paper emphasizes the need for a high-level body (preferably an inter-agency board), because this would ensure a strong institutionalized champion to push reforms along and follow through in a consistent manner. (See Step 3) 6. An information system through which statistics and data on procurement are readily available for monitoring and evaluating performance and outcomes. For such a system to exist and function effectively, there has to be a strong link between the national normative/regulatory body and the procuring agencies, so that data are routinely collected, filed, analyzed and fed back into the system. This, in turn, requires a certain level of transparency, reliable data, and effective data/records management within each of the procuring entities. 7. A professionalization program that ensures three things: (i) that government procurement officers and staff are adequately and continuously trained on procurement matters; (ii) that they have ready access to relevant information, such as current prices and the latest applicable technical specifications, at least for regularly procured goods and services; and (iii) that a positive environment in government exists for the continuous development of motivated procurement officers and staff. 8. A partnership between the public and private sector, wherein the government is the buyer and the private sector is the supplier, and there is continuous dialogue between these parties so that the private sector can voice its concerns when faced with government practices that undermine fair competition, and so that private sector institutions are well prepared and have easy access to the public procurement market. 9. Strong policies and practices for contract administration and dispute resolution, including inspection and acceptance procedures, quality control procedures, capacity to review and issue contract amendments in a timely manner, and an efficient and fair process for resolving disputes that arise during the performance of the contract. 10. Effective internal and external controls. Procuring entities should have internal control and management procedures that provide the checks and balances necessary to ensure procurement transactions are conducted effectively and efficiently. The procuring entity’s internal audit function can complement the work of external auditors so that audits look both at the individual procurement transactions, as well as the measures needed to ensure effective internal control. 11. Strong ethics and anti-corruption measures that address issues of corruption, fraud, conflicts of interest and unethical behavior, so that all actors within the system are held accountable for their actions and, when appropriate, penalized accordingly. These measures should apply to all stakeholders in the system. Fiscal Reform and Economic Governance Project 4
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