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Reforming Public Procurement -- Syquia and operational policies for the use of its loans and for supervising the execution of projects it helps to finance. They provide no special focus on such matters as: 1. A national regulatory and oversight body; 2. Institutional frameworks and budget linkages; 3. Procurement organizational structures within implementing agencies; 4. Administrative and/or judicial review by the State; 5. Administrative, civil and/or criminal sanctions; and 6. A professionalization program. The WTO GPA’sstructure is similar to an international treaty that aims to establish an agreed framework of rights and obligations among its parties with respect to their national laws, regulations, procedures and practices in the area of government procurement. However, it is also basically a trade instrument that aims to promote fair competition in domestic procurement and prevent undue protection of domestic products or suppliers or discrimination against foreign products or suppliers. In addition to consulting the above documents, it is advisable for drafters to review the omnibus laws of other countries, such as Ghana’s Public Procurement Act (2003) and Lao PDR’s Decree of the Prime Minister on Government Procurement of Goods, Construction, Maintenance and Service (2004). 4.5 E-procurement Electronic procurement (e-procurement) is becoming increasingly relevant in the design of public procurement reforms. In Ghana, for example, the Public Procurement Board has a website that features a compilation of procurement regulations and commentaries (including the new public procurement law), frequently asked questions, and a tender board listing all government tenders, offers and awards. The Philippine Government’s E-Procurement System (PhilGEPS), meanwhile, features an internet-based public tender board, a database of registered suppliers, and an electronic catalogue for purchase of common use goods and supplies. The Multilateral Development Banks’ Electronic Government Procurement Portal at http://www.mdbegp.org/ui/english/pages/toolKit_std.aspx provides several documents intended to help governments develop the institutional foundations for e-government procurement (e-GP), diagnose the existing procurement environment, articulate a strategic plan, select the right standards, and develop a roadmap for the implementation of e-GP. UNCITRAL recently observed that two main technological developments in the last ten years have changed the manner in which procurement is conducted. First, the use of electronic means of communication has become widespread. Second, many governments have begun to manage certain parts of the procurement process electronically. xiii For this reason, at its 37th session in 2004, UNCITRAL tasked the Working Group on the revision of its Model Law on Procurement with considering issues arising from the increasing use of electronic communications and technologies in public procurement, including the use of internet-based procurement methods. xiv At that session, the Working Group noted that the use of e-procurement offered many potential benefits, including improved value for money and enhanced transparency in the procurement process, and that these were consistent with the main aims and objectives of the Model Law. The Working Group further identified key principles that should form part of the basis for accommodating the use of electronic communications and technologies in the Model Law on Procurement. These include the following: 1. The model law should encourage the use of electronic communications and technologies in public procurement; 2. It should make appropriate provisions for that purpose in a technologically neutral manner; and Fiscal Reform and Economic Governance Project 9
Reforming Public Procurement -- Syquia 3. Any advice to be provided should cover all means of communication and offer guidance on the controls that are needed for their use. Introducing e-procurement in government should not be a goal in itself, but should be seen as a tool to achieve the objective of efficient and effective procurement. E-procurement should be seen as part of a larger reform package that addresses the legal and institutional framework, as well as the processes and procedures that will reduce operational inefficiencies and lessen opportunities for corruption in public procurement. The following sections address some of the critical issues that may have to be faced when developing an e-procurement program. The discussion relies heavily on the experience of the Philippines PhilGEPS project and the work of the UNCITRAL Working Group on Procurement. The notion of “electronic” means and the use of electronic communications in the procurement process In view of the procedural nature of public procurement, laws, rules, regulations and bidding instructions should indicate clearly the manner in which documents are to be submitted and the form that they should take. To avoid confusion or uncertainty, the legal framework should include definitions and explanations of certain terms that are linked to advances in technology. For example, the UNCITRAL Secretariat has noted the importance of clearly defining the word “electronic” in connection with the form of communications provided in the law. The term commonly refers to any information that is not contained in a tangible medium, such as electrical impulses, but may not necessarily cover such recent “electronic” techniques as data imaging, which relies on optical storage. UNCITRAL, therefore, recommended the use of a general definition of “electronic,” which could be used to qualify both the medium used to store the information (for instance, “electronic document”) and the means for transmitting the information (for instance, “publication by electronic means”). With respect to the use of electronic communications in the procurement process, the UNCITRAL Working Group on Procurement noted that the main policy issues included the following: 1. Whether the law should permit or require procuring entities to use electronic communications by consent with suppliers or authorize either party to require electronic communications; and 2. Whether those rules should attach conditions to the use of electronic means to safeguard the objectives of the procurement law, so as to prevent the electronic means chosen from operating as a barrier to access, to secure confidentiality, to ensure authenticity and security of transactions and the integrity of data. xv According to the UNCITRAL Working Group, as regards the extent to which electronic communications (including the electronic submission of tenders) could be required or made mandatory, it is more desirable to approach the issue in a flexible manner. On the other hand, as regards the procuring entity’s right to require electronic communications, it was generally felt that it would be unwise to craft a rule that contemplated that possibility for all cases and circumstances. After all, imposing such a requirement might inadvertently prevent suppliers with limited or no internet connectivity from participating in public tenders. This consideration is particularly relevant in the case of developing countries, where connectivity rates are generally not very high. For instance, the 2003 CPAR for the Philippines made the following observations with respect to the e-procurement program: While the system has great potential for improving the transparency and efficiency of procurement, the [Government of the Philippines] had noted the Fiscal Reform and Economic Governance Project 10
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