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Public Procurement Reform and Governance in Africa

The list of dignitaries included, to name a few, the honorable Governor of Kaduna State in Nigeria and representatives of the Ministers of Finance in South Africa and Egypt.

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The breakout sessions and panel discussions were very well set, with a good level of speakers, with time for debate and allowing for interaction with the audience. The OECD, as a global platform for knowledge sharing and good practice dissemination, stands ready to collaborate with the AfDB, the WB and the African countries to modernize public procurement systems across the continent and contribute to elevate the already high standard of procurement practices that can be found in many places.

The participants also acknowledged that the public procurement reform requires sustained country ownership, political will and commitment, together with appropriate technical solutions. With respect to eGPF, the representatives recognized the value e-GP can bring in establishing a more effective, efficient, and sustainable procurement environment, benefiting not just the government and participating vendors, but the public at large by providing unrestricted open access to procurement information and business opportunities.

A Community of Practice CoP of public procurement officials in the African region has been established as a platform to exchange knowledge and experiences over e-GP.

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As a result of the forum you would hope that learning about the success stories from the region will encourage the counties which are at the early stages of their reform projects to increase the pace of development. Consequently, private markets cannot provide public goods.

Instead the government provides those goods and finances them by raising taxes from all citizens. In addition to public goods, governments often also provide merit goods , such as education or health care. Merit goods are private goods which are rival and excludable and are therefore provided by private markets.

Nevertheless, governments also provide merit goods because of reasons of equity and fairness and because they have positive externalities for society as a whole. In order to provide public and merit goods, the government has to buy input factors from private companies, e. This process is called government or public procurement.

Government procurement involves a high risk of corruption because of the great size of financial turnover and the complexitiy of many procurement processes in which businesses interact very closely with politicians and civil servants. Often the personal interests of the public officials are not the same as the interests of the public. Such a conflict of interest problem, known as the principal-agent-problem , increases the risk of corruption.

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According to OECD , the highest percentage of bribery cases occur in the area of public procurement to influence the awarding of public contracts. In order to prevent corruption and to ensure transparency and competition among suppliers, public procurement is subject to legal regulation. Government procurement regulations normally cover all public works , services and supply contracts entered into by a public authority. However, there may be exceptions. These most notably cover military acquisitions , which account for large parts of government expenditures.

The GPA and EU procurement law allow of exceptions where public tendering would violate a country's essential security interests. Additionally, certain politically or economically sensitive sectors, such as public health, energy supply or public transport, may also be treated differently. One of the consequences of the financial crisis of — was an attempt to reduce public spending in order to control public debt.

This trend has affected government procurement for its significant share in public spending. These strategies include public e-procurement , centralized purchasing or framework agreements. Public e-procurement stands for replacing various phases of public procurement with electronic means. Purpose of using e-tools is reducing administrative costs by automation. E-procurement can also mitigate some barriers to entry for smaller suppliers, consequent increase of competition can reduce price of procurement.

Centralized purchasing means awarding procurement contract on behalf of one or more procuring entities. This method has been used to gain various benefits emerging from demand aggregation.

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Centralized procurement can be done by ordinary contracting authorities or established central purchasing body. Centralized procurement is regulated by local legislation. Commonly mentioned benefits of procurement centralization are as follows:. Moreover, higher value can attract more companies to bid in the tender, increased competition might lead to better price as well.

Contracting units can reduce their transaction costs in cooperating with other entities. This aspect is often considered as most relevant argument for procurement centralization. Therefore, higher procured value can contribute to higher transparency among public tenders.

Some central procurement bodies also perform research activities. However, other centralization aspects are often criticized. Discussed drawbacks are often connected to the decentralization theorem stated by American economist Wallace E. Oates in The theorem claims, that decentralized system is more efficient, because of the information asymmetry between local and central government. Procurement decentralization might also negatively impact supply side. Higher procured values might require higher capacity of supplying company and it might create barrier to entry for small or medium companies.

Consequently, it might lead to monopolizing public procurement market. Critics also mention that only some goods can be purchased centrally. Goods that are heterogeneous or they have many characteristics are not suitable for this strategy [9]. Framework agreement is another method for aggregation of demand. The discussed advantage is an administrative costs reduction again as tender procedure don't have to be duplicated for agreed period of time. All of these three procurement strategies are not mutually exclusive. So, framework agreements can be processed centrally through e-procurement.

Albania has observer status with regard to the Government Procurement Agreement and is negotiating accession. Presidential Decree No. Public procurement in Angola is governed by Law No. Public expenditure, the provision of services, the leasing and acquisition of goods, and public works contracts regulated through the Public Procurement Law. Argentina has observer status with respect to the Government Procurement Agreement. Goods are also for sale to the general public. The Australian government 's procurement activity is governed by the Commonwealth Procurement Rules and overseen by the Department of Finance.

Australia ratified the GPA on 5 April and participation in the requirements of the agreement will come into effect on 5 May The Northern Territory 's Procurement Act is the principal legislation regarding procurement, supplemented by procurement directions, procurement rules and procurement circulars. Annastacia Palaszczuk , Queensland's Premier , stated in the strategy that this "major shift in procurement" would "put Queenslanders first", by support[ing] genuine local jobs, by demonstrating a commitment to those businesses that share our commitment to Queenslanders" and "deliver greater transparency in procurement planning across agencies".

Tender opportunities are published on the government's QTenders site. Public bodies in Tasmania are required to comply with the Treasurer 's Instructions on Purchasing and Property. Since 1 July , government departments in Western Australia have been required to award an increasing percentage of contracts to registered Aboriginal businesses under the state's government 's Aboriginal Procurement Policy. The Swiss Challenge system is utilised in Bangladesh to procure infrastructure development through public-private partnerships.

The procedure of government procurement in Brazil is regulated for a lot of different laws with different procedures depending on the importance and the value of the procurement.

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This latter regulates the procedure of specific situations of sharing acquisitions of goods or under portioned deliverings. Public procurement in Canada is regulated on various governmental levels federal, provincial, municipal. Foreign suppliers from member nations to these agreements can bid on Canadian government procurements and are treated the same as domestic suppliers. A non-competitive procurement process is only used in certain special circumstances. One such area of exception are security-related procurements.

In that case the Defence Production Act applies, which allows using a special process and favouring domestic suppliers in acquiring defence supplies and conducting defence. During the period from to , Chinese public bodies acquired the goods and services they required in accordance with administratively directed transactions, whereas since the economic reforms of , "central planning has started to give way to market forces".

Researchers Ping Wang and Xinglin Zhang suggest that for comparative law purposes, it only makes sense to speak of "government procurement" or "public procurement" after the implementation of the reforms. The finance departments within each section of government are responsible for the supervision of departmental public procurement Article China has observer status with regard to the Government Procurement Agreement and is negotiating accession.

The Public Procurement and Property Administration Agency advises the federal government on "on all public procurement and property administration policies, principles and implementation" and provides "technical assistance to the regional governments and city administrations". EU laws apply only to tenders that exceed certain thresholds in value.

These thresholds vary depending on the area the contract is for and if the procurement is done by a central government or by other public authorities e. National laws are applied for tenders below these threshold values. There are five different procedures for public procurement: [50]. The European Commission is working on further improving efficiency and transparency in government procurement in the EU with its current public procurement strategy. Government procurement in Austria is regulated by the Federal Procurement Act Belgian legislation on public procurement is set out in the Act of 17 June implementing the EU procurement directives.

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Royal Decrees issued on 18 April for general public procurement, 18 June for procurement in the water, energy, transport and postal services sectors, 22 June containing new rules on the performance of public works contracts and concession contracts for public works and 25 June , for the award and performance of concession contracts, have augmented the earlier laws.

Article 51 of the Royal Decree of 18 April includes a "revolving door mechanism", which targets the situation where a person previously working for a contracting authority is now being employed by an economic operator involved in a public procurement procedure established by that contracting authority. Government procurement in Bulgaria is a critical area in corruption risk. Public procurement contracts have been awarded to a handful of companies amid widespread irregularities, procedure violations and tailor-made selection or award criteria.

Prime Minister Boyko Borisov described the extension as "absolutely necessary" in order to prevent persons from illegally entering the European Union member state. The first public procurement law in Croatia based on the EU Procurement Directives was enacted in , but a revised legal structure for public procurement was put in place with the Public Procurement Act of , [59] and this was superseded by the Public Procurement Act of , effective 1 January The High Administrative Court of the Republic of Croatia has jurisdiction over the State Commission in relation to disputes concerning procedure, but there is no right of appeal against Commission decisions.

Under Croatian law , procurement procedures must be carried out by authorised representatives of the contracting authority, of whom at least one must hold a valid procurement certificate. Government procurement in the Czech Republic is regulated by Act No. The motion was defeated by The Estonian Ministry of Finance is responsible for public procurement policy, drafting the law, providing supervision and consultancy, and maintains a central Public Procurement Register. In Finland the following legislation applies to government procurement:.

A Government Decree on Public Contracts was also in force until The Ministry of Employment and the Economy is responsible for the preparation of legislation concerning public procurement. The Finnish Competition and Consumer Authority FCCA oversees public procurement: section of the Act on Public Procurement and Concession Contracts mandates the FCCA to supervise compliance with public contracts legislation and to provide 'administrative guidance' or if necessary to issue a caution to a non-compliant public authority.

The Market Court's rulings in public procurement cases can be appealed to the Supreme Administrative Court of Finland. The Act on Electronic Auctions and Dynamic Purchasing Systems of 17 June , which entered into force on 1 October , introduced new procurement procedures, whereby documents relating to procurement would be sent and received exclusively online. This legislation included the use of eAuctions. Transposition of the EU public procurement directive into Finnish law was delayed after the deadline 18 April with the consequence that some aspects of the directive were directly applicable from April until the new Finnish legislation was in place from 1 January Hansel Ltd.


All currently relevant EU directives have been implemented into national law. In Germany transposed the new EU Directives of into domestic law. Thereby, processes and contracts in public procurement have become easier and more flexible. Detailed procedures are specified in further regulations, e. For public procurement below the EU thresholds there are different regulations. At the federal level national budgetary law applies while the 16 federal German states and some municipalities have their own public procurement laws and regulations.

Liberia: Overview of public procurement

This decentralized system reflects the political decentralization in Germany. However, sub-national level procurement regulations often take national regulations as examples and also ensure competition, non-discrimination, and transparency. Government procurement in Gibraltar is managed by the Procurement Office, an independent office of Her Majesty's Government of Gibraltar which reports directly to the Financial Secretary.

The Public Procurement Monitoring Unit PPMU , established in , part of the Centre of International and European Economic Law in Thessaloniki , provides Greek contracting authorities with "specialised and prompt legal advisory support on awarding public works and technical services contracts falling within the scope of EU Law on Public Procurement". Concession award procedures are also covered within the same legislation, and the fundamental principles set out in Act V of on the Civil Code , the "ultimate instrument relating to the operation of civil persons and economic organizations", also apply to public procurement.

Public procurement in Italy is primarily regulated by the Public Contracts Code, which is administered by the Ministry of Infrastructure and Transport Italian : Ministero delle infrastrutture e dei trasporti. The code was reformed in to implement the new EU directives of into domestic Italian law. Most public procurement on a national level is administered by the state-owned company Consip S.

Larger regions have their own agencies for public purchasing. These laws transpose the EU procurement directives; one additional legal provision is that for supplier selection purposes, real estate tax debts are checked where tenderers are registered or permanently resident in Latvia.

This department is responsible for the regulatory framework, drafting relevant legislation and monitoring its implementation, and also for representing the Luxemburgish authorities in the field of public procurement. A Tender Commission with members drawn from contracting authorities, chambers of commerce and small business sectors undertakes a consultative role in relation to public procurement.

Under regulation 80 a Public Contracts Review Board is established. The Commercial Sanctions Tribunal Regulation 95 is appointed to hear and determine issues relating to the black listing of persons unsuitable for the award of a public contract or to act as a sub-contractor to a public sector contractor.

The main legislative provisions governing public procurement in the Netherlands are:. Sector-specific procurement regulations are also included in the Passenger Transport Act Decree-Law No. Public procurement in Slovakia is subject to the Law on Public Contracts, which came into effect in September Health commissioners in England are exempt from the Lord Young Rules when procuring clinical services and these rules do not apply in Wales i. In Wales, two organisations - the National Procurement Service, established in , and Value Wales - oversee Welsh public sector procurement.

The role of Value Wales includes shaping procurement policy, monitoring procurement in practice, supporting, advising and developing procurement staff and ensuring compliance with procurement regulations.