Foundations of Public Procurement

Description

Public procurement is central to good public financial management and public resources allocation. It´s importance is derived from its role as the vehicle by which typically over 40% of the budget implementation is managed and can be as high as 70%.  It is the means by which a country´s policy objectives get implemented. The effectiveness and efficiency of public procurement in implementing policy through the purchase of the right outputs and their delivery is affected by a number of factors including clear and unambiguous laws and regulations, effective institutional arrangements including the use of administrative complaints boards, effective controls, a professional cadre, document and records management, transparency and accountability.  Beyond government officials, this also places an onus on the role of the civil society and private sector in demanding public procurement performance and supporting reforms. It is also affected by how well the market functions; the linkages with budget preparation and budget release management managed through the application of procurement plans.

The principal approach to bringing into balance competition, effective procurement control, administrative burden, cost, appropriate authorization and procedural delay is through the appropriate use of procurement methods.  The default method is the open tender method all other methods requiring justification. The professional development workshop will provide participants with an overview of the legal and regulatory framework, decentralised public procurement institutional arrangements, the development and uses of procurement plans, clear concepts and a simple tool to classify and apply specific procurement methods.  It will review different types of contracts and how they are applied.  These will include lump sum contract unit price contracts, framework contracts, percentage based contracts, and cost reimbursable contracts.  It will also provide participants with an overview of contract administration and pay attention to the application of contract variations.  The workshop delineates the linkages between public procurement and other public finance management functions. In particular, it will build on the internal controls and the external audit functions.  Special topics covered in the course are the assessment of public procurement, public disposal, opportunities for corruption, design competitions and public private partnerships.

This professional development workshop brings to participants an understanding of what the requirements are for achieving a high performance sound public procurement system.  The course will permit government officials not directly responsible for public procurement to better appreciate how other parts of public finance management performance impact upon the performance of public finance management, and in turn how public procurement impacts upon public finance management performance.   It shall help the participants develop a framework to analyse how procurement is done in their country, what are the relevant issues hindering its efficiency and effectiveness and how to support a reform effort.

Fundamental to idilmat’s approach, is the use of simple tools and analytical frameworks for assessing the quality of public procurement and the risks.  Case studies and group work exercises are employed to allow participants to gain a practical handle on how to use their newly acquired knowledge for effective oversight. This in turn shall enable participants understand the centrality of procurement in Public Finance Management and how a systemic approach to reforming procurement can help curb corrupt practices. The professional workshop will cover the linkages to contract selection and management. Audit tools for controlling and assessing performance will be presented and tested.

Objective

The principal professional workshop objective is to provide participants with introductory concepts and practical tools to understand the functions of procurement and its operations.  Further it is to provide a comprehensive overview of public procurement and thus better appreciate the quality of government’s spend. Further it is to allow discussion and interaction with other participants involved in Public Procurement oversight and reform in their countries.

Audience

The target audience is Non-Governmental Organizations (NGOs) and national think tanks involved in policy advocacy work, the media, civil society and other Non State Actors (NSAs). It will also be beneficial to government officials involved in other areas of public finance management who would like to improve their understanding of public finance management. It is suitable for participants with little or no background in Public Finance Management. It contributes to developing capacities in country to form a credible demand-side for public finance management reforms.

Pre-requisites

There are no pre-requisites for this professional workshop as it is developed for persons with little or no experience in public procurement. However, a basic familiarity with budget and expenditure terms would be helpful. It would be an advantage if participants are aware of their countries’ existing systems or accountability institutions and have an open mind to sharing their experience and ideas.

Learning outcomes

By the end of the professional workshop participants should:

• Acquire simple analytical frameworks to understand the foundations and principles governing public procurement: legal and regulatory principles driving equity, fairness, accountability and transparency. Appreciate how to achieve efficiency and effectiveness using appropriate procurement methods and become familiar with the main institutional arrangements – oversight authority, tender boards, tender evaluation committees, administrative review boards, procurement entities, procurement units, procurement committees.
• Be aware of the procurement-expenditure cycle and understand its stages, authorization arrangements,
• Understand the linkages to other PFM functions as planning, budgeting, managing the cash flow, commitment control and especially to external scrutiny by Public Procurement Oversight Authority, National Audit Office, Anti-Corruption Commission and Parliament
• Understand the role of the procurement plan both in budget preparation as well as budget release management
• Use a simple classification for all procurement methods that permits categorising all methods into a simple analytical framework that balances risks versus administrative burden
• Understand the characteristics of different contract types and what the consequences may be in adopting each
• Appreciate contract administration especially as it pertains to contract variations
• Understand how a functioning market plays a key role in public procurement: how the relationship between the public sector “purchaser” and the private sector “vendor” is crafted by the laws, regulations and the practice of public procurement and how this affects the three “Es”: economy, efficiency and effectiveness of public procurement
• Assess how transparent and accountable a public procurement system is using published information and data
• Read an audit of public procurement
• Appreciate basic elements of public disposal, design completion and public private partnerships

Learning methods

The learning methods will include the following

• Introduction to key concepts through the “teaching and discussion” method
• The use of original source material of key writers/thinkers in this area to support concepts and establish reference to existing practice
• The use of extensive examples from many different countries with different experiences to illustrate the points put across
• The use of short exercises to provoke and consolidate concepts introduced
• The use of major case studies – to apply tools and to illustrate in more detail some of the key points of the professional workshop