Reducing Corruption through Electronic Procurement Eduardo Talero Washington, April 21, 2005

1. Reducing Corruption through Electronic ProcurementEduardo TaleroWashington, April 21, 2005

2. OVERVIEW • What is e-procurement? • What is the e-procurement cost/benefit function? • How can e-procurement reduce corruption? • What are the key points to remember?

3. Public Executive Legislature Procurement Authority S U P P L I E R S B U Y E R S Disclosure Facilities TransactionFacilities UserSupportFacilities SystemsIntegrationFacilities e-GP: FULL SYSTEM

4. Public Executive Legislature Procurement Authority S U P P L I E R S B U Y E R S LAWS / REGULATIONS BUSINESS OPPORTUNITIES BIDDING DOCUMENTS CONTRACT AWARDS e-GPDISCLOSURE FACILITIES Disclosure Facilities CODING SCHEME SUPPLIER ROSTER STATISTICAL DATA BASE

5. Framework Contracts e-GP: TRANSACTION FACILITIES COST High E-Tendering Online Auctions ¨ Bidding ¨ Reverse Bidding E-Purchasing Online Shopping Low Low High VOLUME

6. Public Executive Legislature Procurement Authority S U P P L I E R S B U Y E R S Reference Prices Solicitation Preparation Support Electronic Payments Bid Preparation Support Bid Evaluation Support Research Support Supplier Registration & Alerts e-GP: USER SUPPORT FACILITIES

7. e-GP: INTEGRATION FACILITIES Public Executive Legislature Procurement Authority S U P P L I E R S B U Y E R S E-Government Integrated Fiscal Management Requisitioning Contract Management Inventory Control Asset Management

8. OVERVIEW • What is e-procurement? • What is the e-procurement cost/benefit function? • How can e-procurement help reduce corruption? • What are the key points to remember?

9. IMPACT e-GP SYSTEM INPUTS Disclosure Facilities TRANSPA-RENCY Leadership/ Human Resources Governance EFFICIENCY UserSupportFacilities Institutional Change ECONOMY TransactionFacilities Technology IntegrationFacilities SYNERGY Financing THE e-GP COST-BENEFIT FUNCTION

10. Leadership and policy reform Example: Chile: Jan.,2003 Executive Order • Declares e-GP system official publication vehicle • Mandates publication through the system of business opportunities, bidding documents, questions and answers, contract awards. • Establishes publication time standards to be enforced by the system. • Declares non-compliant transactions invalid. • Makes management responsible for accuracy of information.

11. TRANSPA-RENCY EFFICIENCY SYNERGY e-GP COST – BENEFIT RATIO Non-Financial Inputs Over 8% of GDP 10-20% Transaction cost reduction Financing: US$ 2.5 – 3.5 million/Country 10% cost reduction (0.8% of GDP) ECONOMY • E-Government • Fiscal Management • Systems Integration Full e-GP System

12. OVERVIEW • What is e-procurement? • What is the e-procurement cost/benefit function? • How can e-procurement help reduce corruption? • What are the key points to remember?

13. HOW CAN E-PROCUREMENT HELP REDUCE CORRUPTION? • Illuminating the playing field • Facilitating entry • Standardizing communications • Keeping score • Leveling the playing field • Enforcing the rules

14. e-GP: TRANSPARENCY BENEFITS • HEALTH SERVICE RECIPIENTS • PUBLIC TRANSPORT USERS • STUDENT POPULATION • MOTORISTS • ETC. OVER 8% OF GDP • ALL GOVERNMENT • MID SIZE BUSINESSES • LARGE SUPPLIERS • SMALL SERVICE FIRMS

15. e-GP: TRANSPARENCY BENEFITS • HEALTH SERVICE RECIPIENTS • PUBLIC TRANSPORT USERS • STUDENT POPULATION • MOTORISTS • ETC. OVER 8% OF GDP • ALL GOVERNMENT • MID SIZE BUSINESSES • LARGE SUPPLIERS • SMALL SERVICE FIRMS

16. How can e-procurement help reduce corruption? • Illuminating the playing field • Facilitating entry • Standardizing communications • Keeping score • Leveling the playing field • Enforcing the rules

17. How can e-procurement help reduce corruption? • Illuminating the playing field • Facilitating entry • Standardizing communications • Keeping score • Leveling the playing field • Enforcing the rules

18. Purchase plans RFQs & RFPs Request for documents Payment Clarification questions Bidding documents Clarifications Proposals Clarification questions Clarifications Notice of Award e-GPSTANDARDIZES COMMUNICATIONS S U P P L I E R S B U Y E R S

19. How can e-procurement help reduce corruption? • Illuminating the playing field • Facilitating entry • Standardizing communications • Keeping score • Leveling the playing field • Enforcing the rules

20. How can e-procurement help reduce corruption? • Illuminating the playing field • Facilitating entry • Standardizing communications • Keeping score • Leveling the playing field • Enforcing the rules

21. E-catalog Purchases E-Tendering Reverse Bidding STAGED DEVELOPMENT OF e-GP SYSTEM INTEGRATION FACILITIES TRANSACTION FACILITIES DISCLOSURE FACILITIES Policy Reform + Institutional Reform + Human resource development

22. How can e-procurement help reduce corruption? • Illuminating the playing field • Facilitating entry • Standardizing communications • Keeping score • Leveling the playing field • Enforcing the rules

23. OVERVIEW • What is e-procurement? • What is the e-procurement cost/benefit function? • How can e-procurement help reduce corruption? • What are the key points to remember?

24. E-GP AND CORRUPTION: KEY POINTS TO REMEMBER • Political leadership and policy reform are critical • Success not possible without culture change • Gradual development is possible and desirable • Modest start yields large transparency benefits • Overall impact can be major • Every country case is different