Complete Book PDF (4.12MB) - World Bank eLibrary

Health Sector Corruption in Ethiopia 39
not obligated to follow the federal law, all nine regions have followed the
federal government’s lead and adopted similar standards, procedures, and
organizational structures.
PPA standards include five procurement procedures: open bidding
(international and national), two-stage bidding, restricted bidding (international
and national), request for quotations, and direct procurement.
In the past three years, PPA reports that it has received information from
75 percent of federal agencies and, among these, open bidding accounts
for about 84 percent of all procurement; direct procurement for another
11 percent; and a combination of restricted bidding, two-stage bidding,
and request for quotations for the remaining 5 percent (Wolde 2009).
Interviews with the PPA and procurement specialists from government
and foreign agencies all reported that the capacity to properly
conduct and control procurement has improved considerably in recent
years. When asked about the negative conclusions of a 2002 audit, one
foreign agency staff person said, “It could easily have happened because
staff didn’t know how to follow procedures, but if I were to see the same
thing today, I wouldn’t believe that it was lack of capacity.” MOFED’s
Public Finance Management Assessments have also judged Ethiopia’s
procurement procedures to be satisfactory, even if they give lower marks
for record keeping and follow-up on external audits (FDRE 2007a; World
Bank 2007). To the extent that problems persist, they are blamed on lack
of proper procurement planning, failure to use the standard bidding
documents, and poorly trained staff.
Specialized health procurement reforms. More than in other sectors,
health procurement involves technically specialized products that only
one or a few manufacturers produce. Furthermore, the extensive network
of public facilities requires timely distribution of these products, often
under particular storage conditions.
Ensuring that procurement is fair and efficient under such conditions
is difficult. For example, in one case, international competitive bidding
for ELISA equipment (devices for testing antibodies, often used for HIV/
AIDS diagnosis) elicited numerous bids from trading firms but none
from the two international companies that produce the equipment.
Therefore, the purchase cost was probably higher than it might have
been directly from the manufacturers, requiring the Ethiopian government
to contract separately with the manufacturers for technical support
and maintenance. The efficient approach would have been to identify
the two manufacturers and invite bids directly from them. However, the