Upgrading public procurement

Monday, 27 February 2017 01:15 -     - {{hitsCtrl.values.hits}}

Public procurement is a hidden conveyor belt that keeps an economy running.  Without effective procurement, hospitals wait for drugs, teachers for textbooks and cities for roads. Whenever a news item surfaces about drugs shortages in hospitals, schools without textbooks or failing road networks, the reader may be looking at a procurement problem. Without efficient procurement, money gets wasted on a very large scale. 

Many developing countries including Sri Lanka channel significant proportions of their budgets through the procurement system, which means even marginal changes can add up to big savings. Public procurement is a part of the Government that citizens see every day. Lack of transparency and corruption in procurement directly affects citizens, and the losses to corruption are estimated in the billions of dollars every year. Tracking the convoluted public procurement system can be exhausting but essential to combating corruption.  

With this in mind the independent National Procurement Commission (NPC) is amending Sri Lanka’s National Procurement guidelines and manual, and will release an official plan today, more than a year after it was appointed by President Maithripala Sirisena.

A committee is drafting the amendments, according to news reports. In August last year, the NPC sent out a letter to the Secretaries of the President, Prime Minister, Cabinet of Ministers, ministries as well as the Chief Secretaries of Provincial Councils, announcing its intention to upgrade the prevailing procurement guidelines and manuals issued by the National Procurement Agency (NPA) and the Treasury’s Public Finance Department. It sought suggestions and recommendations and called for its letter to be circulated among all procurement entities. The NPC is empowered to formulate fair, equitable, transparent, competitive and cost-effective procedures and guidelines for procurement of goods, services, works, consultancies and information systems for Government institutions.

Among other things, the NPC asked what sections of the existing guidelines should be deleted for not being technically relevant; problems that have been identified when dealing with external parties; new areas to be introduced; and ambiguities within present guidelines. But upgrading procurement systems is difficult for a number of reasons. Data on procurement outputs, outcomes or systemic performance is hard to come by and limits policymaker knowledge for reform that makes a real difference. Procurement reform also has a collective action problem. Any improvement to the procurement system will benefit a very large population of beneficiaries a little bit. However, most citizens, like the next person in the street, will never know nor care about procurement. On the other hand, civil servants or those who operate and directly interact with the system, care a great deal about it and are often very heavily invested in the status quo, at the risk of affecting their jobs or careers. Procurement reform isn’t (just) about procurement. Different stakeholders have different, complex interests and incentives related to procurement reform: Influential stakeholders outside the procurement system could well care enough about specific changes that deliver better outputs for them. Procurement is also intrinsically linked to cash management. Simply put, procurement, especially through major Government tenders, has long been at the core of corruption and tackling it is crucial for the Government not to just gain credibility on the good governance front but also run the country efficiently and progressively.   

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