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Reforming Public Procurement -- Syquia the actual legislation of an omnibus procurement reform law. For purposes of broader coverage, this paper focuses on the latter scenario. This is especially relevant when public procurement reform is introduced under the auspices of a broader anti-corruption program, given the fact that informal institutions are often strong when formal institutions are weak. However, it should be kept in mind that a full-blown effort to advocate and enact an omnibus procurement reform law is generally a longterm process and could take years. Therefore, there may be a need for short-term measures to address more pressing procurement challenges while the law is being developed. Even in countries with highly centralized government and decision-making processes, extensive efforts must go into legitimizing policy reforms and securing broad-based support for policy or systemic reform. Policy champions at the highest levels of government need to be identified—key decision makers with sufficient credibility, political resources and the willingness to risk political capital in support of the reforms. At the same time, garnering support from a wider array of constituents both within and outside the government is critical to ensuring that the reforms are truly embraced and implemented. Clearly, then, legislating an omnibus public procurement law requires advocacy efforts that reach out to various groups and individuals throughout government, the private sector and civil society. In drafting the legal framework, there is no “one-size-fits-all” model law that can be applied to every situation. In fact, reforming public procurement should not begin with drafting the law, but rather with an analysis of the problems in the current legal framework that give rise to corruption and inefficiency. Generally speaking, however, the legal framework for public procurement should provide for the following: 1. open and competitive bidding; 2. mandatory publication of tenders and awards; 3. clear and simple procedures for the various types of procurements; 4. the minimum content of tender documents; 5. mechanisms and procedures for independent review and appeal of procurement decisions; 6. an independent oversight body to monitor and regulate compliance with procurement laws; 7. an integrated information system that gives buyers and sellers easy access to procurement plans, notices and awards, and procurement rules and regulations, at no or minimum cost; 8. clear procedures for managing and monitoring awarded contracts, to ensure that contracts are performed strictly according to specifications; 9. development of a human resource strategy to ensure permanent training and capacity building programs are in place; and 10. penalties and criminal sanctions for misconduct. Step 3 focuses on creating a central body that is impartial, transparent and effective. This body has to have moral ascendancy over the entire bureaucracy; otherwise, it may only be regarded as a superficial body that churns out policy with neither the field information to support its issuances nor the power and credibility to enforce it. The term “body” is used, because the powers and responsibilities that it carries obviously cannot be placed in the hands of a single individual, but rather upon a group of persons representing both the public and private sectors, acting by consensus. This would ensure that issues and matters are properly discussed and debated before they are transformed into policies. It has to be an inter-agency body with effective private sector representation so that both sides of the procurement contract are adequately represented in policy development, and undue external and political influences are avoided. Needless to say, if the oversight body takes the form of a board and is appropriately composed of high-ranking government officers, these officers should not be expected to perform technical work. As such, there would also be a need for an office that would function as the secretariat and administrative group of the oversight body that would be tasked to undertake the much needed research and technical work. Even if substantial efforts are undertaken during the initial advocacy stage to sell the reforms to, and consult with, both top-level and mid-level champions, if no equivalent amount of effort is taken to Fiscal Reform and Economic Governance Project vi
Reforming Public Procurement -- Syquia communicate these to the implementers in the field and train them on the new procedures, the overall effort may fail. For this reason, capacity building should not only be seen as training, but also as a communication tool. In the latter sense, capacity building should push the advocacy efforts undertaken in Step 2 further, so that knowledge and ownership of the reforms are further cascaded from the central government and its line agencies, down to the various local government offices and agencies. Considering that the procurement practitioners in a procuring agency are really the enablers of the procurement reforms, the overall impact of these reforms depends upon the level of professionalism present within the respective agency. As such, capacity building should eventually lead to a fuller professionalization program for procurement officials in government, covering three major areas, namely: 1. Human capital (skills development through short certificate courses); 2. Information capital (e.g., accessible and comprehensive information systems); and 3. A climate for positive action (which basically covers employee motivation and satisfaction). After evaluating the country’s procurement environment, developing a strategy to push for reforms, establishing the legal and institutional frameworks, and then training the enablers in the line agencies and local offices, the next step (Step 5) is to assess how effectively the strategy has been undertaken, how much of the reform agenda was actually implemented in the field, and the overall impact of the procurement reforms in the country. As the BIS is predominantly based on macro indicators, it is not intended to measure performance and must be coupled with other management tools, like a performance measurement framework, to guide actions on what and where changes need to be made in a particular agency. Determinations as to whether better performance outcomes are achieved as a result of policy reforms need to be based on, among other things, collection and analysis of actual performance data. Therefore, the Agency Procurement Performance Indicators (APPI), more recently referred to as the Compliance/Performance Indicators (CPI) by the OECD-DAC, complements the BIS, providing an effective tool for monitoring and evaluating implementation at the agency or micro level. This tool would have to be linked to the elements of the national procurement system in order to demonstrate how such a system is actually cascaded down to the agency and local levels. To create such a linkage between the national procurement system and the agency-level procurement system, one should consider take into account: 1. Whether the subject agency has a strategy for achieving an effective procurement program, and whether this strategy is in line with the national procurement reform policy; 2. Whether the organizational structure and employee capacity of the subject agency supports a strategy that is in line with the national procurement reform policy; 3. Whether the internal procurement processes of the subject agency support a strategy that is in line with the national procurement reform policy and is in accord with its organizational setup; and 4. Whether the subject agency is able to undertake its procurement in a transparent and accountable manner, supported by sufficient records and documentation. Based on the above findings, policy makers may then make further changes or refinements to the strategy for improving the public procurement regime, or use those findings to develop a new strategy to address unresolved needs, gaps and emerging issues. Fiscal Reform and Economic Governance Project vii
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