Reforming Public Procurement

Annex A. Regional outreach of the Recommendation: Performance in LAC countries

In January 2016, OECD members decided to strengthen co-operation with the LAC region through the creation of an OECD LAC Regional Programme. This Programme aims to support the region in advancing its reform agenda along three key regional priorities: increasing productivity; enhancing social inclusion; and strengthening institutions and governance.

The OECD has never been closer to the LAC region: Chile and Mexico are OECD member countries. Colombia and Costa Rica are in the process of accession. The OECD also has a co-operation programme with a Key Partner Brazil and is completing a two-year country co-operation programme with Peru. It is also stepping up its engagement with Argentina via a tailored Action Plan. All of these countries as well as the Dominican Republic, Panama, Paraguay and Uruguay are members of the OECD Development Centre. Overall OECD indicators show that LAC countries are behind the OECD average in a number of areas. The GDP per capita (a measure of a country’s standard of living) is low in LAC countries when compared to others (Figure A ‎A.1).

Figure A ‎A.1. GDP per capita in LAC countries compared to other countries

Source: http://www.oecd.org/latin-america/data/macroeconomic-indicators.htm, OECD/CAF/UN ECLAC calculations based on the methodology proposed by Felipe, Abdon and Kumar (2012). Data extracted from International Monetary Fund, World Economic Outlook database (2016) www.imf.org/external/pubs/ft/weo/2016/01/weodata/index.aspx. and Bolt, J. and J. L. van Zanden (2014). "The Maddison Project: collaborative research on historical national accounts".

The general government expenditure as a percentage of GDP is significantly less than the average for OECD countries (Figure A ‎A.2). This measure provides an indication of the size of governments across countries. The indicator highlights the variety of countries’ approaches to delivering public goods and services and providing social protection, not necessarily differences in resources spend.

Figure  A ‎A.2. General government expenditures as a percentage of GDP, 2007, 2009, 2014 and 2015

Source: Data for the LAC countries: IMF, World Economic Outlook database (IMF WEO) (April 2016). Data for the OECD average: OECD National Accounts Statistics (database). (OECD, 2016[1])

The macroeconomic outlook in LAC countries has deteriorated in recent years. This has had an impact on living standards, as well as on prospects for socio-economic progress. It is emerging as one of the main drivers for citizens’ discontent. Low levels of productivity and the stagnation of incomes at middle-income levels – what is often called “the middle income trap” – remain critical challenges for greater well-being in LAC countries. Despite progress, 25% of Latin Americans still live in poverty. While around 40% have escaped poverty during the last 15 years, but only to join a vast and vulnerable social group of mostly informal workers that could easily fall back into poverty. This means that close to 65% of Latin Americans still live in poverty or vulnerability. (OECD/CAF/UN ECLAC, 2018[2])

A modest recovery is now underway with GDP having grown at a rate of 1.3% in 2017. Increased global trade, a moderate recovery in commodity prices and the gradual monetary normalisation in advanced economies – still supportive of financial flows – underpin the cyclical recovery in the region. Short-term risks look more balanced, but increased uncertainty about the progress of globalisation may dampen trade and foreign direct investment flows. Global megatrends may also affect the LAC country economies. They include weaker productivity, technological change, an ageing population, urbanisation and climate change. (OECD/CAF/UN ECLAC, 2018[2])

Implementation for results in LAC countries

In 2018 the Inter-American Development Bank (IDB), which regularly contributes to the OECD Working Party of the Leading Practitioners in Public Procurement analysed the public procurement systems of 26 LAC countries (“the LAC study”). The purpose of the study was to review the status of the countries in light of the OECD 2015 Recommendation of the Council on Public Procurement (“the Recommendation”).

The analysis of the aggregated data shows areas that require more work and support to close the gaps with respect to international standards. The study concluded that more than 50% of the actions of the Recommendation have been implemented in the LAC region, which means that the modernisation of national public procurement systems are progressing.

The analysis aggregated data from 16 LAC countries in three dimensions:

1. Self-perception of National Procurement Systems regarding the current situation of the application of the principles contained in the Recommendation.

2. The current situation of national procurement systems based on specific actions taken so far.

3. The degree of implementation of concrete and detailed steps needed to apply the principles of the Recommendation.

The objective of using these three dimensions was to:

• Generate a comprehensive study connecting the self-perception of national public procurement systems in relation to the current state of the implementation of the Recommendation (specific actions already implemented).

• Identify specific steps on the road towards construction of a well-developed national procurement system using the Recommendation as the model.

• Evidence the most sensitive areas that required interstate or international agency cooperation.

The study concluded that the average progress on implementation of the Recommendation by LAC countries surveyed was 55% (based on specific actions and steps taken by countries so far). However, there are large differences in progress between different LAC countries, as demonstrated by Figure A ‎A.3. Chile, Colombia and Uruguay had the highest progress rate.

Figure  A ‎A.3. Progress on implementation of the Recommendation by LAC countries

Source: (IntraAmerican Development Bank, 2018[3]).

The progress towards implementation of the Recommendation is higher than 50% for nine of the 16 LAC countries surveyed (Argentina, Brazil, Chile, Colombia, Ecuador, El Salvador, Guatemala, Dominican Republic and Uruguay).

The LAC countries surveyed that have the lowest levels of progress are mainly in the Caribbean region. However, governments in this region have recognised the need for improvement in the public procurement system. Together with international development partners, governments in the Caribbean have embarked on reforms in recent years, most notably reforms for the legal and regulatory frameworks. Since 2018, the OECD has been working with the Caribbean Development Bank in conducting assessments using the Methodology for Assessing Procurement Systems (MAPS) of five Eastern Caribbean states (Antigua and Barbuda, Anguilla, British Virgin Islands, Montserrat and St. Kitts and Nevis.) These MAPS assessments form the beginning of a larger reform programme to improve public procurement in the region. The recommendations following from the assessment will be addressed in a subsequent programme.

The lowest progress rates (less than 41%) were obtained in the following three principles (Figure A ‎A.4):

• Risk Management: integrating risk management strategies for mapping, detection and mitigation throughout the public procurement cycle.

• Evaluation: stimulate improvements in performance by assessing the effectiveness of the procurement system, both in specific processes and in the system as a whole, at all levels of public administration, whenever feasible and appropriate.

• Balance: recognise that any use of the public procurement system to pursue secondary policy objectives should be balanced against the primary procurement objective.

Figure  A ‎A.4. Progress of LAC Countries on implementation of the Recommendation by Principle

Source: (IntraAmerican Development Bank, 2018[3]).

The study concluded that the least developed steps that require special attention are contained within four areas of principles: Risk Management, Evaluation, Balance and Capacity. Some OECD countries have highlighted the same areas in regard to their procurement systems and examples are noted in the OECD Public Procurement Publications and Toolbox (OECD, n.d.[4]). The specific areas that the participants in the study identified as requiring special attention are as follows:

• Risk Management:

  • To publicise risk management strategies (progress rate 25%)

  • To prepare risk management tools to identify and address threats to the optimal functioning of the public procurement system (progress rate 27%)

• Evaluation:

  • To develop indicators to quantify performance, efficiency and cost savings in the public procurement system (progress rate 23%)

• Balance:

  • Employ an adequate impact evaluation methodology to quantify the effectiveness of the public procurement system in achieving secondary policy objectives, (progress rate 31%).

• Capacity

  • To offer professionals of public procurement an attractive, competitive and merit based career system, (progress rate 13%)

An analysis follows of the LAC countries and their progress towards implementation of the four actions that are identified as requiring special attention in the LAC study.

Integrating risk management in LAC countries.

Managing risks effectively aids in preserving the integrity of public procurement processes and to drive efficiency through the system. Public procurement is at risk of waste, mismanagement and corruption and it is the most common purpose for bribes in foreign bribery cases. Because public procurement can involve large sums of money and complex and close interactions between actors from both public and private sectors, it is often in the spotlight for corruption risks. In Latin America, corruption in public procurement and infrastructure projects often has its root causes in the political sphere. However, public procurement systems in the Latin American region have made significant progress towards enabling better accountability and mitigation of corruption risks (OECD, 2017[5]).

Infrastructure projects involve a close assessment and careful balancing between risk allocation and value for money. Major differences between infrastructure delivery models (e.g. design-build, design-bid-build, alliance contracting, private-public partnership, concession and private provision) exist with regard to the allocation of risks and public control over the construction of the infrastructure (OECD, 2017[6]).

Effective risk management and the establishment of controls

The development of effective risk management in infrastructure can benefit from the government putting in place robust control mechanisms.

Internal control can be seen as the “invisible hand” that allows public sector entities to focus on setting objectives and deliver value, while complying with legal regulatory and societal expectations (Table A ‎A.1). Establishing controls and managing risk as part of objective setting and performance management, instead of making it the focus, can enable an entity to better respond and adapt to surprises and disruptions in the pursuit of goals. Developing robust internal control mechanisms are seen as an iterative process that involves performance and governance rather than as an additional system with additional procedures and resource requirements. Effective internal control mechanisms may be indistinguishable from day to day activities. In this sense, risk management and internal control, even when integrated, are the means to the end of achieving public policy objectives (OECD, 2016[7]).

Over time, OECD countries have developed stronger internal control arrangements as they moved from ex -ante to ex-post control. The approach marked a cultural shift and provided the management of public entities greater flexibility in financial and non-financial resource allocation decisions (they are checked after the fact as opposed to before execution). The change has not meant fewer compliance-oriented controls, but has layered together a more comprehensive system of control (OECD, 2016[7]).

Table  A ‎A.1. Key elements of setting internal control policy and managing risk

Stage of the policy cycle	Key functions of a strategic and open state
Policy formulation	Strategic whole-of-government steering
	Budgetary planning
	Establishing regulatory policy
	Creating risk management and internal control policies 1. Guidance for risk management and internal control exist across governments and can be tailored to individual entities. 2. Internal control requirements and guidelines are consistent with the legislation, public financial management, and public administration in general, and integrate international standards. 3. The autonomy, roles, responsibilities and powers of audit and control actors (e.g. their scope of control) are clearly established. They are defined between the centre of government and public sector entities and within entities. 4. A government-wide anti-corruption framework is established. 5. Those responsible for setting and achieving an entity’s objectives are also responsible for setting controls to effectively own, manage and oversee risks related to those objectives as well as risk tolerances. 6. Entity level decisions are based on high-quality information about the performance of the entity.

Source: (OECD, 2016[7]).

The six LAC countries that responded to the OECD Survey indicated that they have not carried out whole system analysis of risks and neither have many of the non-LAC countries. Sector specific and regular cyclical assessments are carried out which is consistent with the results in the LAC study which show that risk management is one of the least developed principles among the participating countries (OECD, 2018[8]). The Federal Public Administration in Mexico is an example of a country that has developed a risk management system that allows the identification, evaluation, prioritisation, control and monitoring of risks that may hinder or prevent compliance with institutional goals (Box A ‎A.1).

Box  A ‎A.1. Mexico and risk management

The Federal Public Administration in Mexico has a risk management system, which is a systematic process that allows the identification, evaluation, prioritisation, control and monitoring of risks that may hinder or prevent compliance with institutional goals. In relation to the operations of material and financial resources in public contracting a risk management methodology includes several minimum stages. They are recorded annually in a risk management matrix:

• Trait assessment which is integrated with the identification, selection and description of risks, the classification of risk, the identification of risk factors, the identification of possible effects of risks, the initial assessment of the degree of impact, the initial assessment of the probability of occurrence.

• Evaluation of controls: the stage that risks are checked, discovered, determine the preventive, corrective and/or detection controls.

• Final assessment of the risks with respect to controls: the impact and probability of the risk is given a final value with a comparison of the results of the risk assessment and control stages.

• Institutional risk map: a map is made that identifies within four quadrants of risks whether or not they are for immediate attention, periodic attention, are controlled and whether they are to be followed up.

• Defining the strategies and control actions: avoid, reduce, assume or transfer/share the risk.

Source: (OECD, 2017[9]).

The area where there remains a gap for LAC countries is in the identification and use of risk management tools. Such tools can identify risks including:

• Risks of errors and anomalies in all aspects of the procurement process due to a lack of awareness on the part of the stakeholders involved or due to an objective difficulty in the case of complex projects.

• Financial risks, particularly during periods of severe economic and financial uncertainty.

• Risks of fraud, misuse of public funds or corruption, in the case of misappropriation.

• Reputational risks/potential damage to the image of a contracting authority (OECD, 2016[10]).

There is a close relationship between integrity risks, which require a holistic and integrated approach to properly address them during the public procurement cycle. If these risks are not adequately managed during public procurement processes then they pose a great threat to sound economic performance and effective governance of public functions. In studies of public procurement in LAC countries the OECD has observed there is a high risk in some countries of wrongdoing and integrity breach (OECD, 2016[11]).

The OECD has published guidance and case studies for countries to use in the implementation of risk management on its website (OECD, 2016[10]). There are various tools that could be used by both LAC and non-LAC countries to identify and illustrate risks (OECD, 2016[10]). For instance, Argentina’s Anti-corruption Office developed dedicated integrity tools in the area of public procurement (Box A ‎A.2).

It is also important to bring the greatest procurement risks (those that exceed risk tolerance) to the attention of relevant personnel. Red flag systems can be instituted to exclude or confirm potential fraud or corruption. Areas that may be relevant for red flag systems are:

• Complaints from bidders.

• Multiple contracts below procurement thresholds.

• Unusual bid patterns.

• Seemingly inflated fees.

• Suspicious bidder.

• Lowest priced bidder not selected.

• Repeated awards to the same contractor.

• Changes in contract terms and value.

• Multiple contract change orders.

• Poor quality works and/or services (OECD, 2016[10]).

Box  A ‎A.2. Argentina’s Anti-corruption Office

Some LAC countries have developed tools and strategies to deal with particular areas of risk for example Argentina’s Anti-corruption Office (OA). The OA carried out a study in 2007 to generate a scheme for strengthening transparency in public procurement systems. A risk map was developed to identify problematic areas that favour the development of vulnerable areas for irregular or inefficient practices.

The OA proposed a series of recommendations to develop transparency policy actions to narrow the problems encountered, improving the management practices in public procurement and strengthening those features that function adequately. Many of the recommendations made by the OA were considered for the 2012 update of the national regulatory procurement regime.

Source: (OECD, 2016[12]).

Driving performance improvements through evaluation in LAC countries

Measuring performance, efficiency and cost savings in the public procurement system was identified in the LAC study as one of the least developed steps towards implementation of the Recommendation.

In general, it is challenging to measure the effectiveness and efficiency of public spending partly because the characteristics of an effective or efficient public sector are not easy to define. Public spending is used to deliver the services that meet citizens’ and society’s needs. The objectives are not easy to identify and it is difficult to demonstrate when they have been achieved. The results are usually only visible in the long run.

The OECD has worked with both Chile and Colombia (which include CPBs as part of their public procurement systems) on public procurement reform and the challenges of measuring and improving performance. The use of data and measurement methodologies can help to shape transformational reforms in public procurement that have regional impact (OECD, 2017[13]).

Of particular relevance to LAC countries with CPBs is the recent work by the OECD with Finland to identify an overall set of measures of “procurement productivity”. This work takes into account the inputs and outputs of the system, as well as the “enablers” (such as legislation, e-procurement systems, and capabilities) and allows the impact of strategic public procurement to be demonstrated. In Finland, application of the framework has highlighted the potential positive impacts of public procurement that have quantified economic benefits such as the presence of procurement of innovation and transparent use of Framework Agreements. The potential to further quantify those benefits is explored. Research indicates that based on an analysis of the savings made in different categories of Finnish public procurement an average of 25% savings could be achieved through centralised purchasing (OECD, 2019[14]).

Improvements in the efficiency of public procurement can have a real and positive impact on the overall expenditure of governments. Procurement is a significant proportion of total government expenditures (average of 22%) and it is rising in some LAC countries while lowering in others. Compared to the OECD average (29%), however, most LAC countries have a lower proportion of procurement spend to total government spend, with the exception of Peru (Figure A ‎A.5). The Netherlands for example channels almost 45% of its total government expenditure through public procurement which corresponds to more than 20% of national income (Ortiz-Ospina and Roser, 2016[15]).

Figure  A ‎A.5. Government procurement as a share of total government expenditures 2007, 2009 and 2014

Source: IMF Government Finance Statistics (IMF GFS) database. Data for Mexico are based on the OECD National Accounts Statistics database. (OECD, 2016[1])

Availability of high quality data to use for assessing efficiency is an issue for governments in the area of public procurement. Often, there is no standardised approach for collecting and using data in a way that would allow for comparisons both at the national and international levels. Much of the strategic analysis and decision making is therefore based on qualitative data, as quantitative data is either difficult to find or lacking in veracity. While insights based on qualitative evidence can provide a reasonable basis for decision making, quantitative evidence – when collated rigorously – would provide a more comprehensive analysis (OECD, 2019[16]). For instance, Colombia developed key performance indicators to measure and analyse various dimensions of its public procurement system. (Box A ‎A.3).

Box  A ‎A.3. Colombia’s development of key performance indicators

Colombia is an example of a LAC country that has developed indicators to measure the national procurement system. A set of key performance indicators has been identified to measure the effectiveness of the activities undertaken by Colombia Compra Efficiente to improve the performance of the national procurement system. The measures fall into the following four areas:

• value for money

• integrity and transparency in competition

• accountability

• risk management.

In 2015, Colombia Compra Efficiente released the first estimation of the results baseline using the procurement information of State Entities from 2014.

• opportunity of the contracting processes: 7.4%.

• changes in value according to specifications: 0.1%.

• average time of the selection process according to the award mechanism: open tender: 37 days; merit contest: 38 days; abbreviated selection: 37 days; reverse auction: 38 days; abbreviated selection in instruments to aggregate demand: 9 days; direct contracting: 26 days; special regime: 38 days; selection with small budget: 12 days; and lower value: 38 days.

Source: (OECD, 2017[17]).

To demonstrate overall improvements in LAC countries through public procurement initiatives the choice of measurements can prove challenging. Aligning the measurement of public procurement’s impact in terms of progressing public policies is notoriously difficult. The OECD review of Public Procurement in Germany is of particular relevance to countries with federal states such as Mexico, Venezuela and Brazil. In Germany, there is an increasing focus on analysing the benefits of new laws or regulations rather than the financial cost. Using a framework such as the OECD Well-being Framework to monitor progress and prosperity in the well-being of citizens has been suggested as a way to address this issue.

The Well-Being Framework covers the factors, beyond economic growth, on which public procurement can have the most impact. In order to perform the measurement of public procurement’s impact it is suggested that the size and use of public procurement be measured first at a disaggregate level and then aggregated as part of a comprehensive framework. Several countries around the world are looking at different measures for assessing the progress of government policies other than GDP (OECD, 2019[16]).

Balancing the objectives of public procurement systems in LAC countries

The LAC study identified the following areas requiring special attention: employing an adequate impact evaluation methodology to quantify the effectiveness of the public procurement system in achieving secondary or complementary policy objectives.

Achieving broader outcomes for governments by using public procurement as a springboard is increasingly being explored by many countries. There is encouragement to use strategic procurement in this way as a lever to support government policies by a number of international institutions. The drive to achieve strategic outcomes through public procurement has introduced more complexity into the procurement process and meant that the skillsets required of public procurement personnel has changed as a result. OECD studies support the view that this strategic approach to procurement brings about additional benefits to governments, however, the implementation and measurement of the benefits needs to be done well otherwise benefits may not be fully achieved (OECD, 2019[16]; OECD, 2017[18]; OECD, 2015[19]).

The process of measuring the effectiveness of the public procurement system in achieving secondary policy objectives requires a balancing of different government objectives. Additionally hard evidence is required by policy makers on the impacts of different policy measures used to pursue the secondary objectives (OECD, 2019[16]).

The OECD has worked with the State of Nuevo Leon in Mexico to identify a framework for boosting secondary policy objectives with targeted measures. The approach taken was to divide the procurement process into stages and apply considerations of secondary policy objectives at each stage. The impact of the framework was assessed in the context of local considerations (OECD, 2018[20])

A study of Finland undertaken by the OECD found that in order to measure the impact of secondary policy objectives, it is first necessary to define the broad strategic government goals or objectives that will be achieved by the public procurement outcomes (Box A ‎A.4).

Box  A ‎A.4. Measuring public procurement impact in Finland

In Finland, the following public procurement objectives were identified:

• Unlocking innovation.

• Increasing access and competition from SMEs.

• Increase exports and employment.

• Pioneer of clean technology.

The OECD has worked with Finland to identify a path forward to measure the impact of public procurement on achievement of these broad policy outcomes. A comprehensive OECD report has identified gaps and further work required in collecting data to demonstrate that the outcomes had been achieved. A productivity framework was defined and as part of it, a set of performance indicators was suggested including some for measuring the impact of public procurement on achieving the goals related to secondary policy objectives. Some examples of the performance indicators are set out below:

• SME participation: Number of bids submitted for government tenders by businesses categorised as SMEs.

• Reduction in energy consumption: Comparison of energy consumption of historical goods and services bought by the government and new goods and services selected using MEAT or other criteria.

• Reduction of CO₂ emissions: Comparison between CO₂ emissions from historical goods and services bought by government and new goods and services selected using emissions as criteria.

• Improvement in air/water quality: Comparison between impacts on air/water quality of historical goods and services bought by government and new goods and services selected using environmental considerations as criteria.

• Use of social criteria in government contracts: Ratio of public contracts pursuing social objectives (and where possible, aggregation of social outcomes secured through public contracts).

• Skills/jobs creation: Number of jobs/training courses/qualifications generated through public procurement.

Source: (OECD, 2019[14]).

An OECD study of Germany not only were the objectives defined but an exercise was carried out to measure how they were prioritised across German contracting authorities. A number of steps were defined for Germany to focus in on implementing strategic public procurement including to conduct regular and thorough evaluation of progress towards sustainability goals (OECD, 2019[16]).

Developing the skills and capabilities of procurement professionals in LAC countries

The best outcomes from good public procurement are enabled by a knowledgeable and skilled workforce. Unsurprisingly the LAC survey results show some positive correlation between the progress rate in in the implementation of the “Capacity principle” of the Recommendation and progress rates scores across other principles. The progress rate of the “Capacity principle” shows strong positive correlation with progress rates of the Accountability (Pearson coefficient: 61%) and the “Integrity principle” (62%). This suggests that countries doing better on Integrity and Accountability also may also have a more knowledgeable and skilled procurement workforce (and vice-versa). There are also strong positive correlation of the progress rate of the “Capacity principle” with progress rates of the “Efficiency, Evaluation and Integration Principles” (Pearson coefficients: 60%, 57% and 62% respectively).

Recognising public procurement as a specific profession, certification and regular procurement trainings are essential to the performance of public procurement systems (OECD, 2016[10]). The OECD confirmed this insight in the Mexican State of Nuevo Leon, where it conducted an assessment of the capacity of the public procurement workforce (Box A ‎A.5).

Box  A ‎A.5. Public procurement capacity in the State of Nuevo Leon, Mexico

The OECD worked with the government of Nuevo Leon on assessment of the capacity of public officials conducting public procurement processes. The ensuing report identified that there were two necessary conditions for public procurement capacity to operate in that jurisdiction in an optimal fashion. Firstly, public procurement officials have to possess the necessary skills. In addition, a sufficient number of procurement officials needed to be available to handle the number of public procurement processes in Nuevo Leon. The OECD review identified two major areas for action:

1. Establish a strategic framework for the professional procurement workforce in Nuevo Leon.

2. Establish a system for merit-based career progression for public procurers that are fit to handle evolving challenges.

Source: (OECD, 2018[20]).

In order to formulate a strategy to increase capacity or professionalise the workforce it is important to understand the baseline that currently exists so that gaps are identified and improvements can be tracked. The OECD Methodology for Assessing Procurement Systems (MAPS) (Collective authors, 2018[21]) includes an indicator regarding a public procurement system’s ability to “develop and improve” (Indicator 8). The indicator includes references to a system’s ability to provide training, advice and assistance with regard to public procurement. There is also a sub-indicator that calls for procurement to be considered a profession. The sub-indicator includes assessment criteria that require a country to have:

• A recognition of procurement as a specialised function as described by a diversified competency framework.

• Competitive appointments and promotions.

• Evaluation of staff performance and adequate promotion.

A supplementary MAPS module (currently under development) spells out elements of approaches to a comprehensive professionalisation approach for public procurement.

The OECD worked with the Government of Peru (OECD, 2017[5]) to define a capacity building strategy that was informed by the following considerations:

• Building a sustainable procurement workforce is a long-term effort. The strategy needs to tackle both immediate and long-term issues.

• The strategy should aim to improve individual capabilities as well as the institutions capacities in the area of public procurement.

• The strategy is a planning exercise. It involves the development of a step-by-step roadmap with prioritised objectives and expected outputs.

• Building a sustainable procurement workforce mobilises time and resources. The strategy needs to include a budget.

• The development of a procurement capacity strategy should be inclusive. All relevant stakeholders should be gathered, in the framework of a task force or a steering committee.

In order to attract motivated and skilled individuals, there needs to be recognition that public procurement is not a purely administrative function, but rather a strategic function in the public service. The size of public spending necessitates that the individuals associated with this function are capable of the many diverse skills required.

Public procurement is a multidisciplinary profession that requires knowledge of law, economics, public administration, accounting, management and marketing. The interdisciplinary skill requirements are increasing given the increasing complexity of public procurement processes and the shift to strategic public procurement to achieve broader outcomes more efficiently and with less risk. Competency frameworks, job profiles, certification systems and training all need to align on attracting public procurement professionals through competitive, merit-based career options (OECD, 2017[5]).

In 2017, the European Union (EU) adopted a recommendation on the professionalisation of public procurers as part of the “public procurement package”. In recognition of the strategic importance of public procurement and its ability to influence policy outcomes the recommendation aims at increasing the professionalism with which officials across the EU purchase goods, works and services. The recommendation suggests EU countries tackle the issue from three perspectives:

• Policy Architecture: creating a strategy to increase the professionalism of public procurement.

• Human resources: providing training and a career path for public procurers.

• System: structured tools, methodologies and processes in support of professionalising public procurement.

Using the concrete steps outlined under these headings can form the basis of a capacity building strategy.

References

[21] Collective authors (2018), MAPS Methodology for Assessing Procurement Systems, http://www.oecd.org/dac/effectiveness/commonbenchmarkingandassessmentmethodologyforpublicprocurementsystemsversion4.htm (accessed on 16 November 2018).

[3] IntraAmerican Development Bank (2018), “Survey to the Procurement Authorities of the Latin American and Caribbean Member-Countries on the OECD Recommendation of the Council on Public Procurement (unpublished survey)”.

[14] OECD (2019), Productivity in Public Procurement: A Case Study of Finland, Measuring the Efficiency and Effectiveness of Public Procurement, OECD, http://www.oecd.org/gov/public-procurement/publications/productivity-public-procurement.pdf.

[16] OECD (2019), Public Procurement in Germany: Strategic Dimensions for Well-being and Growth, OECD Public Governance Reviews, OECD Publishing, Paris, https://dx.doi.org/10.1787/1db30826-en.

[8] OECD (2018), “Data from the 2018 OECD Survey on the Implementation of the 2015 OECD Recommendation of the Council on Public Procurement (Unpublished survey)”.

[20] OECD (2018), Public Procurement in Nuevo León, Mexico: Promoting Efficiency through Centralisation and Professionalisation, OECD Public Governance Reviews, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264288225-en.

[13] OECD (2017), Active with Latin America and the Caribbean: Supporting Structural Reform Efforts in Latin America and the Caribbean, http://www.oecd.org/latin-america/Active-with-Latin-America-and-the-Caribbean.pdf.

[6] OECD (2017), Government at a Glance 2017, OECD Publishing, Paris, https://dx.doi.org/10.1787/gov_glance-2017-en.

[9] OECD (2017), OECD Integrity Review of Mexico: Taking a Stronger Stance Against Corruption, OECD Public Governance Reviews, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264273207-en.

[18] OECD (2017), Public Procurement for Innovation: Good Practices and Strategies, OECD Public Governance Reviews, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264265820-en.

[5] OECD (2017), Public Procurement in Peru: Reinforcing Capacity and Co-ordination, OECD Public Governance Reviews, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264278905-en.

[17] OECD (2017), Public Procurement Review of Mexico’s PEMEX: Adapting to Change in the Oil Industry, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264268555-en.

[10] OECD (2016), Checklist for Supporting the Implementation of the OECD Recommendation of the Council on Public Procurement, OECD, http://www.oecd.org/governance/procurement/toolbox/search/checklist-implementation-oecd-recommendation.pdf.

[12] OECD (2016), Country Case: The role of the Anti-Corruption Office (OA) in Public Procurement in Argentina, OECD, http://www.oecd.org/governance/procurement/toolbox/search/role-of-the-anti-corruption-office-oa-public-procurement-argentina.pdf.

[1] OECD (2016), Government at a Glance: Latin America and the Caribbean 2017, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264265554-en.

[7] OECD (2016), Supreme Audit Institutions and Good Governance: Oversight, Insight and Foresight, OECD Public Governance Reviews, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264263871-en.

[11] OECD (2016), Towards Efficient Public Procurement in Colombia: Making the Difference, OECD Public Governance Reviews, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264252103-en.

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[4] OECD (n.d.), OECD Public procurement website, http://www.oecd.org/gov/public-procurement/ (accessed on  2019).

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