Fundamental Procurement Principles

1. Fundamental Procurement Principles Objective: Identify the fundamental principles that underlie law, policy and implementation of public procurement systems.

2. The Principles • Efficiency/Effectiveness • Fairness • Openness • Competition • Transparency

3. Definition of Public Procurement System • The Procurement System is a function of government that involves using government resources (public funds) to obtain goods, works and services to meet the the needs of the government as it carries out its responsibilities to the citizens.

4. Efficiency and Effectiveness • Obligation to spend public funds efficiently – value for money • Obligation to obtain goods, works and services needed for intended purpose – effectiveness and quality considerations • Timeliness

5. Fairness • System needs to operate in a manner that is perceived as offering an opportunity for participants to win contracts in accordance with an agreed set of rules that are not “prejudiced” against participants without a reasonable explanation.

6. Openness • Relates to fairness, but is more specific as to ability of wide range of participants to participate in a competition • An example of lack of openness might be restricting procurement to national or local firms • Another example might be restricting participation to small businesses only

7. Competition • Having multiple demands for limited resources creates competition • Having more than one participant trying to win creates the potential for a competition • Increased competition helps reducing costs

8. Transparency • The ability to understand and see through the process to determine if the process has adhered to the principles and achieved the objectives that the system is trying to implement.

9. Why the principles? • The public procurement system should be fair, open, and transparent. It should provide a means to obtain needed goods, works and services in a timely, effective manner at a efficient prices that are competitive.

10. Procurement Impacting National Interests

11. Harmonization • Harmonization of donor policies, practices and procedures should: • reduce transaction costs • build partner capacity, and • improve aid effectiveness • Harmonization should be done around improved country systems

12. Procurement Capacity Development Success Factors

13. Equivalency with Country Procurements System Performance Indicators ICB Indicators

14. Some Thoughts • Effective procurement is key for development and achieving millennium development goals • Political will for procurement reforms and country ownership are key to success. Support groups interested in improving procurement need to be encouraged. Donor community should continue to support the reform agenda and harmonize their procedures • Mainstreaming and strengthening procurement functions are central for achieving value for money • In designing governments overall reforms strategy, procurement should have a frontline seat and not side tracked • Sustained development in procurement is difficult to achieve without active participation of contracting parties and citizens in general • To enhance public procurement performance, country must pay attention to build an improved procurement capacity-sustainable training efforts from central to municipal levels

15. THANK YOU