Caroline Nicholas UNCITRAL Secretariat April 2013

1. AFDB and EBRD North Africa and SEMED Regional Public Procurement Conference 22-23 April 2013, Marrakesh, Morocco UNCITRAL Model Law: new standards for modern public procurement legislation Caroline Nicholas UNCITRAL Secretariat April 2013

2. UNCITRAL Model Law: new standards for modern public procurement legislation • Why reform public procurement? • Development and governance • Major & important projects (health, education, infrastructure) • With potential for economic performance and development • Provision of services to the most needy • Encourage international trade • Discretionary decision-taking and governance in all parts and levels of government

3. UNCITRAL Model Law: new standards for modern public procurement legislation Why reform public procurement? Size of public procurement market and costs of poor performance • 10-20 % of GDP, 45% government spending (World Bank, OECD) • Systemic corruption = 20-30% of procurement wasted (World Bank) • 80% of waste is inefficiency, not corruption (CONSIP study) • Procurement reform could yield 5-10% efficiency benefits

4. UNCITRAL Model Law: new standards for modern public procurement legislation Why use the UNCITRAL Model Law? • Value: all regions/countries/IGOs/NGOs contribute to negotiating text • Reflects international best procurement practice • Not designed by or for any one region • Template for national procurement law • Designed to work with GPA, UNCAC • MDBs Guidelines/Policies/Rules, OECD guidance, etc • Philosophy – based on principles, rules and results

5. UNCITRAL Model Law: new standards for modern public procurement legislation Key issues in reviewing Model Law, 2004-2011 • Choice of procurement methods • Sustainable procurement • e-procurement • Framework agreements • Challenges, remedies and sanctions • NB – from UNCAC (2004) to financial crisis (2008)

6. UNCITRAL Model Law: new standards for modern public procurement legislation The Model Law: scope and approach • A framework law: all essential principles, rules and procedures needs • Detailed procurement regulations • Supporting infrastructure and institutions • Implementation and use guidance Support for implementation and use– eg EBRD/UNCITRAL Initiative, UNCITRAL TAC activities with MDBs and other agencies

7. UNCITRAL Model Law: new standards for modern public procurement legislation The Model Law: scope and approach • Covers all public procurement - Including “defence” and sensitive procurement - No minimum threshold • Covers all of the elements of the selection process, - Not planning/contract management • Based on - Objectives - General principles applicable to all procurement - Mandated procedures

8. UNCITRAL Model Law: new standards for modern public procurement legislation Key issue 1: Use of procurement methods • A guided toolbox • Default rule – open tendering; justify others • Decision factors: circumstances and maximising competition • Standard procurement • Simple/low-value procurement • Complex procurement • Urgent procurement • Repeated procurement

9. UNCITRAL Model Law: new standards for modern public procurement legislation Key issue 2: Sustainable procurement (an umbrella term) • Policy: no “sustainable procurement” objective • LT and full costing = best practice • No consensus on outcomes • Model Law allows for: • Social/economic criteria – eg promotion of SMEs/disadvantaged groups • Environmental criteria – “green procurement” • Ethical qualification requirements • Subject to international obligations, eg GPA

10. UNCITRAL Model Law: new standards for modern public procurement legislation Key issue 3: e-procurement • Pro-business potential • Greater transparency, lower cost • Removal of human interaction • Improving processes • Standardisation • Monitoring e-procurement is a process, not a technology issue implications for decision-taking?

11. UNCITRAL Model Law: new standards for modern public procurement legislation Key issue 4: framework agreements • Efficient, pro-business • Risks to competition? • Many types and differences between systems • Enactment and use considerations – a sophisticated tool Elevating efficiency over other considerations?

12. UNCITRAL Model Law: new standards for modern public procurement legislation Key issue 5: challenges, remedies and sanctions • Challenges and remedies: • Optional before procuring entity • Mandatory Independent system • administrative/quasi-judicial review mechanism • Court procedures • Appeals • Main aim: corrective action; rapid results • Broad range of relief (including financial compensation) • Default rule: suspension • Default rule: public notice of results • Sanctions (article 21) • Exclusions for bribery, conflict of interest

13. UNCITRAL Model Law: new standards for modern public procurement legislation Supporting the “framework” Model Law Guide to Enactment • Background and explanatory information on policies in the Model Law • Discusses objectives of the Model Law • and how it implements them • Advises on options in the Model Law • and how to adapt them to local circumstances • eg using with the GPA, MDBs policies, rules and guidelines

14. UNCITRAL Model Law: new standards for modern public procurement legislation Guide to Enactment 320 pages … text separated for • Legislators/policy-makers • Scope of reform; which provisions of Model Law to enact? • Regulators • Where are more detailed rules needed? • Those providing guidance to users, eg Public Procurement Agency • Effective use of the law • Practical tools (standard documents)

15. UNCITRAL Model Law: new standards for modern public procurement legislation For more information Website: • http://www.uncitral.org/uncitral/uncitral_texts/procurement_infrastructure.html • http://www.uncitral.org/uncitral/fr/uncitral_texts/procurement_infrastructure.html Contact: caroline.nicholas@uncitral.org THANK YOU