EIGHTH REGIONAL PUBLIC PROCUREMENT FORUM TIRANA, ALBANIA, MAY 22 - 25, 2012

1. EIGHTH REGIONAL PUBLIC PROCUREMENT FORUMTIRANA, ALBANIA, MAY 22 - 25, 2012 E-procurement: Developing a Legal Framework that Maximizes its Advantages Caroline Nicholas UNCITRAL April 2012

2. E-procurement: Developing a Legal Framework that Maximizes its Advantages Background: • 1994 (first Model Law, GPA): EDI in its infancy • Today: some systems entirely electronic • EU 50% e-procurement (goal) • A big deal: procurement = 10-20% GDP • Online trade worldwide $12.8 trillion (2006, Forrester) What is its potential?

3. E-procurement: Developing a Legal Framework that Maximizes its Advantages • “[e-procurement] is emerging worldwide with the potential to reform processes, improve market access, and promote integrity in public procurement” (Schapper, 2008) • Is e-procurement living up to these expectations?

4. E-procurement: Developing a Legal Framework that Maximizes its Advantages Key policy goals in introducing e-procurement (1) better • Transparency • Participation and competition • Objectivity and accountability • Efficiency Potential for better value for money

5. E-procurement: Developing a Legal Framework that Maximizes its Advantages Key Policy goals in introducing e-procurement : (2) better • Oversight (external and internal) • Measurement of performance/results • Identification of risk areas (red flags) Potential for enhanced accountability and integrity – longer-term goal

6. E-procurement: Developing a Legal Framework that Maximizes its Advantages UNCITRAL Model Law e-procurement tools: • e-advertising • e-communications • e-reverse auctions • Framework agreements • e-tenders • e-signatures • e-records

7. E-procurement: Developing a Legal Framework that Maximizes its Advantages Policy approach of UNCITRAL • Encourage e-procurement • Where appropriate (infrastructure) • Safeguards and public confidence • Main policy issues • Staged implementation and where to start • Don’t over-regulate • Business models • International market access • Treat as a reform issue, not a technology issue

8. E-procurement: Developing a Legal Framework that Maximizes its Advantages Staged implementation and where to start • Simple tools • E-advertising, e-communications • Uploading and downloading documents • Communications during the procurement process • Second-stage tools • E-reverse auctions • Framework agreements

9. E-procurement: Developing a Legal Framework that Maximizes its Advantages Simple tools – e-advertising and e-communications • Legal standards for e-communications, e-advertising, e-tendering, meetings • Public confidence and safeguards – authenticity, integrity, confidentiality • Safeguarding market access • Functional equivalence/Technological neutrality • i.e. put all communications on a par • Don’t describe technology

10. E-procurement: Developing a Legal Framework that Maximizes its Advantages Second-stage tools: e-reverse auctions(e-catalogues, framework agreements) • Competitive market • Common/simple procurement • Goods, construction and services • Price-only procurement Strict transparency rules • Overheads for both parties in early stages • Refinements: quality criteria, auctions as a phase

11. E-procurement: Developing a Legal Framework that Maximizes its Advantages Don’t over-regulate • Avoid higher standards for e-procurement • e-signatures • UNCITRAL does not require advanced signatures • EU recommends them • e-tendering requirements • Equivalent to previous requirements for paper tenders • MDBs e-tendering requirements

12. E-procurement: Developing a Legal Framework that Maximizes its Advantages Business model • Proprietary systems/specialist software • Restrict access? • Charges • Outsourcing • Organisational conflicts of interest

13. E-procurement: Developing a Legal Framework that Maximizes its Advantages Longer-term goals: e-procurement as reform issue • Redesigning the procurement system • Integrated from planning to payment and evaluation • Not a technological issue alone • Costs of investment in new system • System to fit needs • Select your tools • Staged approach

14. E-procurement: Developing a Legal Framework that Maximizes its Advantages Longer-term goals: e-procurement as reform issue • Enhancing value for money • “Toolbox” approach to procurement • Involves discretionary decisions • Guidance and oversight – ensuring objectivity • E-records

15. E-procurement: Developing a Legal Framework that Maximizes its Advantages Longer-term goals: e-procurement as reform issue • Enhancing efficiency • Reduced transaction costs and times • Standardisation of purchases • Better management information • Better processes • Better supplier knowledge

16. E-procurement: Developing a Legal Framework that Maximizes its Advantages Longer-term goals: e-procurement as reform issue • Enhancing governance • Removal of human interaction • “Internal” transparency • Enhancing accountability • Traceability • E-records - monitoring trends, red flags

17. E-procurement: Developing a Legal Framework that Maximizes its Advantages Conclusions • UNCITRAL has a facilitative approach to e-procurement • With safeguards • Recognises the value of process reform when implementing e-procurement

18. E-procurement: Developing a Legal Framework that Maximizes its Advantages • For more information • Website: • http://www.uncitral.org/uncitral/en/commission/working_groups/1Procurement.html • http://www.uncitral.org/uncitral/ru/commission/working_groups/1Procurement.html • Contact: • caroline.nicholas@uncitral.org THANK YOU