Trends in Public Procurement

Jorge Claro, formerly of the InterAmerican Development Bank, and an expert in government procurement described current trends at the ICGFM March Meeting. The presentation is available at http://www.icgfm.org/documents/MarPresentation.ppt.

Presentation Highlights

• Reform of the State is one of the most important components of the International fight against corruption but this has not resulted in the best approach from a technical viewpoint.
• Procurement needs to be integrated with other Public Financial Management initiatives as part of an overall strategy.
• International studies indicate Public Sector Procurement accounts for approximately 15% to 20% of GNP in many countries Procurement has traditionally been poorly managed with inefficiencies adding anywhere between 15% to 20% to the cost of the works, goods and services being procured Corrupt practices add an additional 15% to 20% to the cost of those works, goods or services In other words, inefficiency and corruption combined could account for 2.25% to 4% of GNP in most countries, thus negating growth - yet there seems to be little concern about this loss of GNP in most countries.
• Most of the data from countries about procurement is inaccurate.
• There has been no profession of “government procurement”. Capacity building for civil servants and vendors is required. (Jorge has created a training company for this.)
  This is particularly important because of the rise of different procurement methods. Framework Contracts, Lease Agreements, Reverse Auctions and Public-Private Partnerships are described in the presentation.