Public Procurement Process Research Articles

Iraq ∙ Conflicts, Protests and Bad Management: Is There a Way Out for Iraq’s Public Procurement Problems?

According to a World Bank Systematic Country Diagnostic of Iraq made in 2017, Iraqis feel discontented with the basic service they receive.1 Although conflict is not the sole reason behind the deterioration of service providing in Iraq, it may be considered as the main catalyst. The deadly on-going protests that commenced in 2019 shed light on the need for reform to increase public confidence in the government that is responsible for delivering services to the citizens.2 More than 500 Iraqi people have lost their life due to violent protests aimed at overthrowing the government in order to improve basic standard of living through improving the basic service providing and ending corruption.3 The Iraqi Government has spent around $213 billion in public expenditure in the period 2003-20124, however the Iraqi citizen has not seen improvement in service delivery. According to Transparency International latest Corruption Perceptions Index which ranks countries according to their corruption rate, out of 179 countries, Iraq is ranked 160 most corrupt country globally.7 This ranking is not a coincidence but is endorsed by the lack of accountability for the public procurement process. Restoring Public Confidence in Iraqi Procurement Process: Steps and Lessons Learned In order to improve the complications associated with public procurement and civil unrest in Iraq, it is important to assess the success of public procurement in other countries and examine the steps taken by those countries that attributed to the success. 18 In the United Kingdom for example, the government took steps to increase the value of public procurement expenditure through an official government review.19 In Iraq, there is no statistical framework whereby studies and reviews could be gathered in order to produce an official report for public procurement .However, internationally recognized frameworks have been placed to act as a best practice and guides for governments to

Публічні закупівлі як об’єкт аудиту та управління об’єднаними сільськими територіальними громадами в умовах децентралізації

United territorial communities in the context of decentralization are authorized to carry out public procurement at their own discretion. However, additional responsibility reinforces the need to involve the institution of audit as a guarantor of the economic and social feasibility of the process. The purpose of the article is to determine the place of public procurement as one of the objects of the national audit system in order to increase the efficiency of management of united territorial communities. It was found that, despite the improvement of legislative regulation in the sphere of public procurement, the illegal, often “lobbied” use of budgetary funds requires increased control, both from the state and the public, and from the actual administration of the united territorial communities. The theoretical and methodological foundations of the state audit of public procurement were revealed. The directions of improving the state audit of the public procurement process in united rural territorial communities were proposed, while observing the priority of sustainable development goals. The capabilities of the electronic public procurement platform Prozorro were critically assessed. The reasons and prerequisites for the elimination of the corruption component of the public procurement process at the local (united territorial communities) and global (national economy) levels were identified. The need for IT-auditing in the field of legality and economic feasibility of using budget funds in rural territorial communities was proved. The impact of the audit on the general system of information and analytical support of management consists in assessing the effectiveness of activity processes, information processes and control procedures in order to improve the management model of activity and, accordingly, the decision-making system.

Analysis of Sustainable Practices Adopted in the Health Sector Public Procurement Process of Goods by the Provincial Director of Health Services Office, Central Province of Sri Lanka

Analysis of Sustainable Practices Adopted in the Health Sector Public Procurement Process of Goods by the Provincial Director of Health Services Office, Central Province of Sri Lanka

PROBLEMS CAUSED BY THE PANDEMIC IN PUBLIC PROCUREMENT OF GEORGIA

The spread of the new coronavirus in the world, including in Georgia, had a significant negative impact on both public and private organizations, which has affected the public procurement process in the country. Georgia has spent a large amount of money to deal with the virus. As a result, administrative costs have been reduced in order to finance the 2020 state budget deficit - 57 million GEL for labor costs and 107 million GEL for goods and services. It should be noted that 195 million GEL is used on arranging quarantine spaces and other additional health care costs while 1.31 billion GEL is provided for goods and services. During the pandemic, demand from the state increased significantly in the health sector, while declining in other areas, many planned purchases were canceled, tenders were not held, were suspended or their announcement was delayed. This has affected companies whose major activities include state orders. Also rising inflation and currency devaluation have made goods and services more expensive. Consequently, complex problems arose for the entities participating in public procurement, namely: - From the moment the first case of the virus was reported in Georgia, it became mandatory for public and private organizations to follow the recommendations of the World Health Organization and the National Center for Disease Control and Public Health. So, large amount of money was spent on hygiene, disinfection and other means of protecting against the virus to ensure the safety of customers and employees. - Some public and private organizations continued to work remotely, for which they incurred additional costs for equipping employees at home (with computer or other technological resources). Other organizations, which were not prohibited the operation, funded the transportation of staff to the workplace, because of emergency was declared and public transport was restricted. - In order to free up financial resources, procurement organizations have restricted the announcement of planned tenders. Even the winner had already been identified or the bidder had been invited to sign the contract. At the same time, according to the Unified Public Procurement Electronic System a number of tenders have been suspended, including largescale infrastructure projects, most of which were in the selection stage or successful bidder was revealed and invited to sign the contract. - Due to the global pandemic, most companies failed to meet their contractual obligations on time. Contract authorities change the terms of the contract, including increased delivery time and services. In the case of infrastructure projects, based on the decree of the Government of Georgia, contract authorities were given the right to increase the contract value by 10% -20% in order to finance the increase of supplier costs on construction materials - Amendments were made to the legislation governing public procurement. For example, Procurement of goods and services under the many of CPV codes were restricted to contract authorities without the consent of the Government of Georgia. In the original version of the resolution, only 30 out of 200 codes were restricted, and from April 1, 2020, the number of restricted CPV codes has increased to 160. There are number of classified goods and services, whose purchase does not require government consent: agricultural and food products, outerwear, pharmaceutical products, miscellaneous transport equipment and spare parts, Works for complete or part construction and civil engineering work, laboratory services, refuse and waste related services. Because agreement with the government and electronic procedures takes a long time, procurement organizations were forced to purchase goods and services through a simplified procurement in the case of urgent necessity. This means that in accordance with the law, the contract authorities directly signed a contract with the company and after agreed with the State Procurement Agency. Therefore, it is necessary to analyze the additional costs incurred in the field of public procurement due to the coronavirus to make predictions about the procurement process for the next year.

Data Protection in the Public Procurement Process

Transparency is one of the fundamental principles in public procurement. At the same time, the General Data Protection Regulation (GDPR) requires all operators, whether public or private, to respect privacy and data protection. The study starts from the premise of avoiding sanctions and of complying with the obligations of the contracting authority by knowing the hierarchy of values protected by the regulations in force. An important role in ensuring compliance with the law is to correlate the activity of the data protection officer with the procurement department. The stages of the public procurement procedure will be analyzed in the most relevant aspects, from the publication in the Electronic Public Procurement System and the management of personal data submitted by bidders in the procurement procedures until the publication of the results. We will observe whether data protection can become an award criterion and the influence of bidding data breaches in procurement procedures. A sensitive issue is the protection of data transferred outside the European Union and, from the point of view of competition law, the consequences of the associations, and we will finally discuss some aspects regarding the corrective measures that the data protection authority may impose.

Securing Human Right to Water through Public Procurement in Slovakia

Summary The paper aims firstly to assess the deficiencies in access to drinking water that are present in Slovakia. Recently, the country was condemned for various violations in ensuring access to drinking water for all, whether by third parties, but also national institutions and international organizations. Drawing upon the identified failures and violations, the actions undertaken to remedy the situation are analysed, especially in order to establish whether Slovakia dispenses with its obligations under the human right to water and addresses the identified problems satisfactorily. Finally, the process of public procurement in providing drinking water is considered, having regard to its role in promptness and efficiency of addressing the unsatisfactory situation which makes Slovakia open to severe criticism from international human rights bodies.

Review Mechanisms of the Public Procurement Process

Review Mechanisms of the Public Procurement Process

The efficiency of public procurement in the health sector – the platform on sustainable public finances

At present, public procurement processes and their efficiency represent one of the key determinants of public finance system. Many countries of the European Union work intensively on reforming public procurement processes. The main aim of public procurement is to create an open competition in order to achieve the most efficient use of public funds. The Slovak hospitals, that have been inefficiently managed in the long run, are the weakest segment of the healthcare system. Also, the public hospitals continue to generate substantial losses even if many reforms had been implemented to increase cost efficiency. However, medical debt consolidation did not help the hospitals to set optimal functioning of the economic processes in order to improve their management permanently. The primary aim of the study is to examine an impact of selected determinants on an efficiency of public procurement processes in the healthcare system of the Slovak Republic during the 2014 – 2017. The data were obtained from the registers of the Public Procurement Office of the Slovak Republic. The multinomial logistic regression was used to determine the following findings: in case of zero, or positive savings, the number of offers, year of public procurement, type of public procurement procedure, NUTS level of procurement and participation of a subcontractor in procurement process are significant categorical variables. The study results enable a creation of multi-dimensional analyses and support models in order to make effective public procurement processes in the healthcare system. Similarly, these results enable to create comparative benchmarking analyses, and may lead to a creation of new agencies and institutions.

Diversity as job quality: toward the inclusion of trade unions in public procurement of social services

PurposeWhen union representatives are included in government procurement procedures for contracting-out of social welfare services, organizational diversity is enhanced if the job quality parameter, as reflected in the contract, is improved. Asking how unions are treated in government procurement procedures, this paper discusses an approach to diversity management based on the inclusion of unions.Design/methodology/approachAs part of a broader research project, interviews were conducted with six budget administrators and 16 occupational standards administrators employed by the Israeli ministries of Welfare, Education and Health; and with eight trade union activists. Grounded theory was applied for data analysis, revealing meanings of “trade unions” and “job quality.”FindingsBudgeting administrators manifested diversity resistance by means of only partially supporting trade union demands to enhance job quality. Their power position enabled them to prioritize the profit imperative of service providers; the diverse labor force operating the contracted-out service were consequently denied the ostensible benefits of workplace diversity.Practical implicationsUnionization, and trade union participation in social welfare procurement processes, is a potentially effective path to improving job quality and enhancing workplace diversity. However, more must be done to develop the institutional-level processes that will ensure that this potential is utilized to the full.Social implicationsIncluding trade unions in social welfare procurement processes is a potentially effective path to improving job quality and enhancing workplace diversity. However, specific actions are required to develop the willingness of budgeting administrators to recognize the association between union participation, job quality and the acknowledged benefit of promoting organizational diversity.Originality/valueAn institutional work perspective was used to detail how budgeting administrators involved in public procurement processes resisted diversity by undermining trade union action for job quality. By identifying three social processes deployed to side-track trade union campaigns for improved job quality, this research shows how the power struggle between budgeting administrators and union representatives ultimately undermines workplace diversity.

An investigation into design and performance of supply chains for public procurement projects

This study provides new insight into current and emerging supply chain approaches and related power relations deriving from public procurement processes within Local Authorities (LAs). Drawing on a mixed-method empirical research (involving data from LAs across the Yorkshire and Humber region of the United Kingdom) this research examines stakeholder pressures, paying particular attention to principal-agent and dependency relationships between public sector and private companies in public procurement projects. Resource Dependency Theory is used as the theoretical framework to support the study. The paper presents and critically evaluates across a set of dimensions, four models of supply chain archetypes deriving from the implementation public procurement projects. These archetypes identify key stakeholders and determine power relations between main contractors, sub-contractors, government agencies and LAs for the delivery of public sector projects. The research carried out in this paper can inform practice, policy and research in aiding public organizations such as LAs in the design of projects before the procurement stage. Also, the research provides useful insight on how the procurement process can serve as a mechanism for LAs to manage activities of agents in order to achieve a range of objectives.

Проблемы и эффективность госзакупок глазами их участников

<span>Статья посвящена оценке ключевых проблем и эффективности российской системы госзакупок с позиций ее непосредственных участников. Результаты массового опроса заказчиков и поставщиков, проведенного в 2020 г., свидетельствуют о разрастании проблем регулирования госзакупок. Для обеспечения конечных содержательных результатов закупки добросовестные участники рынка все чаще вынуждены действовать в «серой» зоне, переступая через формальные правила. Следствием этого становится рост числа нарушений, выявляемых в ходе проверок ФАС, и рост числа штрафов, но это не приводит к улучшению ситуации. В целом результаты опроса дают основание полагать, что при всей важности борьбы с коррупцией и повышения конкуренции регулирование государственных закупок, в первую очередь, должно быть нацелено на обеспечение их конечной эффективности</span><span class="myHorizontalScaleForEmDashSpaceBefore"> </span><span>–</span><span class="myHorizontalScaleForEmDashSpaceAfter"> </span><span>в виде качественного и своевременного исполнения контрактов с учетом интересов и предпочтений основных участников процесса.</span>

Military Technical Developments in the Frame of the Czech Armed Forces development

In the horizon of 2030, the Ministry of Defense of the Czech Republic set out significant changes, supported not only by an anticipated budget increase, but also by an efficient process of public procurement, and an increase in the number of members of the armed forces to respond to current and future threats. In 2019, the Czech Air Force capabilities the development was ensured by the acquisition of twelve helicopters, eight MADR mobile 3D radars, and two new CASA aircraft. An important year for the Air Force development is the year 2027, when the lease agreement for the supersonic aircraft JAS 39, will be terminated.

Clarifying strategic alignment in the public procurement process

PurposeWhile the need for strategic alignment in public management has been recognized, there is a lack of conceptual clarity to support its application in practice. Focusing on the specific field of public procurement, this paper clarifies and illustrates how the concept of strategic alignment can be applied when strategizing the public procurement process.Design/methodology/approachThe current literature on strategic alignment in public procurement is critically reviewed to identify ambiguities that hamper its application in practice. Based on this review, an analytical framework is developed that conceptualizes strategic alignment as that between the procurement instruments used in a sourcing project and the corresponding higher-level strategies. The framework is empirically illustrated by applying it in a case study that reconstructs the procurement strategy for an innovation projectFindingsStrategic alignment in the public procurement process can be demonstrated by identifying, explicating and logically linking reasoning and trade-off decisions on competing priorities across multiple levels and dimensions of strategyOriginality/valueAlthough creating alignment between policy and public procurement practice is generally held to be important in the public management literature, it is only discussed on high levels of abstraction. This paper provides clarity by investigating alignment in greater detail.

Does E-Procurement Prevent Corrupt Activity in Public Procurement Process?

Corruption is an extraordinary crime that occurred in every country. The United Nations Office on Drugs and Crime (UNODC) reported in 2013 that about 10-25 percent of the value of public procurement in the whole world, including Indonesia, was corrupted. Based on the data of Indonesia’s Corruption Eradication Commission (KPK), corruption cases in public procurement is in the highest rank compared to the others. Using a game theoretical approach, this study aims to analyze the procurement process of public goods and services of the Indonesian Government, which has adopted the electronic system, called e-procurement. The game is played sequentially by two representative agents, namely the organizer (government) and the provider. It is assumed that the organizer has a non-corrupt nature. This study results that e-procurement is not significantly able to reduce corrupt behavior. It happens because, although the procurement process is conducted electronically, both sides still have the possibility to meet for negotiation, which can lead to corruption. Therefore, the key to preventing corrupt practices in public procurement is to avoid the two players’ meeting.

Policies Versus Politics: Which is the more important determinant of public sector supplier selection decisions in Nigeria

Government policy requirements and external political influence are two important factors that have been associated with public procurement processes, but only few studies have considered their relative effect on public supplier selection outcomes in emerging markets. Using Nigerian public sector firms as research setting, this study aimed to empirically determine which of these two factors is more important/influential in explaining supplier selection decisions. Data were obtained from a purposeful sample of 342 senior level staff drawn from 40 public sector firms via structured self-administered questionnaires. Result of regression analysis shows that relative to the importance attached to government policies during public supplier selection decisions, considerations for the interests of important politicians predominate the process. In other words, though important, government policy measures aimed at constraining public sector supplier selection behaviour will continue to appear ineffective in the face of inordinate political influence in the selection process. The implications of the study's finding to prospective investors and policy makers, as well as suggestions for further research, are also discussed.

Risks of Public Procurement for Construction Works

Conducting a public procurement process is prone to conflict if it deviates from procurement principles. Based on Presidential Regulation number 16 of 2018, the public procurement principles are efficient, effective, transparent, open, competitive, fair, and accountable. Problems in public procurement process may occur at every stage, starting from identifying procurement needs to delivering the results of the completed work. Many problems are likely to occur if risk identification is not implemented at public procurement process. If the risk is not identified early, it will be a potentially significant budget loss of government’s construction projects. This paper is an initial research to discover the risk variables in the public procurement process. The purpose of this study is to identify risks that may arise in the process of public procurement. Research variables in this study were obtained from related literature studies. The data in this study were acquired from questionnaires and interviews with several parties related with the public procurement. Mean and Standard Deviation (SD) were employed to assess the relevant variables from questionnaires. According to the experts’ opinion, there were 13 variables in the Planning and Preparation Stages and 9 variables in the Implementation Stage.

Accessing Public Contracts in Ghana: The Case of Small and Medium Enterprises

Public procurement is seen as an avenue to increase business opportunities by Small and Medium Enterprises but this goal has been hindered due to the challenges in accessing public contracts in Ghana. The study sought to ascertain the depth of knowledge in procurement practices by the owner/managers of SMEs in Ghana and also identify and or examine the challenges faced by SMEs i n the public procurement process, so as to know where government interventions would be needed. The study was conducted in the Greater Accra Region. A Focus Group Discussion was organised for the owner/managers of SMEs. This sub-sample were members of the Ghana National Chamber of Commerce and Industry (GCCI) in Accra. A total of 112 owner/managers were available for the last quarter meeting, 9 groups of 14 members each were organised for the focus group discussions. It was discovered that the content of the tender documents were totally or to a large extent left at the discretion of the one procuring it. This could lead to subjective buying and the buying of inferior items. It could also be concluded in this study that the Act had fallen short in bringing the needed transparency with respect to the use of public funds by entity officials. There exist numerous allegations of dishonest deals and lack of openness in procurement practices in Ghana. Furthermore, this research revealed that the actions of procurement entities fall short of the provisions of the Act and that the suppliers and contractors (SMEs) were not privy to these decisions.

Sustainability Policy Objectives, Centralized Decision Making, and Efficiency in Public Procurement Processes in U.S. Local Governments

Some U.S. local governments are leveraging public procurement to meet their sustainability goals. However, does the simultaneous pursuit of multiple sustainability objectives potentially slow down the speed of procurement processes? We suggest that the simultaneous pursuit of multiple sustainability objectives through procurement is related to decision making speed. Additionally, we argue that centralized decision-making structures might moderate this relationship. Drawing on a representative sample of more than 200 U.S. local governments, we demonstrate that for low-cost purchases, as the number of policy objectives increases, so too does the average length of time for approval. We also find evidence of an interactive relationship between decision-making structures and the number of existing sustainability policies pursued simultaneously. For routine low-cost and routine high-cost purchases, we find evidence that as the centralization of procurement decision making increases, the marginal effect of purchasing complexity on approval times decreases. These findings offer important evidence about how pursuing multiple sustainability objectives affect decision-making efficiency and how decision-making structures might facilitate U.S local governments’ integration of sustainability objectives into their existing internal processes.

La competencia y la reforma a la Ley de contrataciones públicas de la Republica Dominicana

espanolLa autora parte de la premisa de que la legislacion de la Republica Dominicana sobre las contrataciones publicas amerita revision en virtud de que las mejores practicas en la materia han sufrido importantes evoluciones, ademas de que se produjo una reforma constitucional en el pais en el ano 2010 que representa importantes desafios para la reforma del Estado. En este trabajo propone los aspectos mas importantes a considerar para la reforma del regimen juridico dominicano en materia de contrataciones con el Estado que enfrente los desafios y se adecue a las mejores practicas internacionalmente reconocidas. El tema se justifica porque las contrataciones publicas poseen una importancia economica indiscutida; en consecuencia, existe riesgo permanente de que los agentes del mercado se coordinen e incurran en practicas anticompetitivas, conocidas en Derecho dominicano como licitaciones colusorias. La autora destaca que existe espacio suficiente para mejora, lo que amerita una reforma legal en la materia. Ha escogido dos grandes pilares para la reforma: por un lado, la mejora en la transparencia de los procesos de contrataciones publicas, integrando las tecnologias de la informacion; por el otro, la mejora de la competencia. La autora considera vital embeber en las contrataciones publicas las reglas de libre competencia. Por esa razon desarrolla en este trabajo cuales son, a su criterio, las herramientas de politicas de competencia que, de ser integradas al marco legal de las contrataciones publicas, podran mejorar de manera significativa el ambiente de competencia efectiva en los procesos de contrataciones publicas. EnglishThe writer starts claiming that Dominican Laws on public procurement deserve revision considering that best practice in the field has gone through major evolution, on top of going through a constitutional reform in the country in 2010, which means major challenges toward a State reform. In this piece of work the writer points at the major points to be considered for a reform of the Dominican legal system regarding State procurement, which faces challenges and adapts to best internationally acknowledged practice. The subject warrantees itself because public procurement is clearly economically powerful, so, there is permanent risk that market agents get coordinated and fall into anticompetitive activities, known within Dominican Legal System as collusive bidding. The writer points out that there is margin for improvement, which deserves a legal reform in the field. She has chosen two great pillars toward reform, on the one hand, improvement in transparency in proceedings of public hiring, by information technology. On the other hand, competence improvement. She finds it vital to soak the rules of freedom of competence in public procurement. She thus develops in this piece of work, the competence policy tools which according to her -when legally framed as public procurement- will significantly improve the atmosphere of effective competence within the process of public procurement DeutschDie Autorin geht von der Pramisse aus, dass die Gesetzgebung der Dominikanischen Republik im Bereich des offentlichen Beschaffungswesens eine Uberprufung verdient, weil sich die besten Praktiken in diesem Bereich erheblich geandert haben, zusatzlich zu der Tatsache, dass im Jahr 2010 eine Verfassungsreform im Land durchgefuhrt wurde, die erhebliche Herausforderungen fur die Staatsreform darstellt. In diesem Papier schlagt sie die wichtigsten Aspekte vor, die bei der Reform des dominikanischen Rechtssystems im Bereich der Staatsvertrage zu berucksichtigen sind und sich den Herausforderungen stellen sowie mit den besten international anerkannten Praktiken in Einklang stehen. Das Thema ist gerechtfertigt, weil die offentliche Auftragsvergabe eine unbestrittene wirtschaftliche Bedeutung hat und folglich ein standiges Risiko besteht, dass sich die Marktteilnehmer koordinieren und wettbewerbswidrige Praktiken anwenden, die im dominikanischen Recht als Absprachen bei Ausschreibungen bekannt sind. Die Autor betont, dass es genugend Spielraum fur Verbesserungen gibt, welcher eine Rechtsreform in diesem Bereich erforderlich macht. Sie hat zwei Hauptpfeiler fur die Reform ausgewahlt: zum einen die Verbesserung der Transparenz der offentlichen Auftragsvergabeverfahren unter Einbeziehung der Informationstechnologien und zum anderen die Verbesserung des Wettbewerbs. Die Autorin halt es fur unerlasslich, das offentliche Auftragswesen mit den Regeln des freien Wettbewerbs auszustatten. Aus diesem Grund entwickelt sie in dieser Arbeit die Instrumente, die ihrer Meinung nach eine Wettbewerbspolitik erfordert, welche, wenn sie in den rechtlichen Rahmen des offentlichen Auftragswesens integriert werden, das Umfeld eines effektiven Wettbewerbs in offentlichen Vergabeverfahren erheblich verbessern konnen.

RISK MANAGEMENT IN PUBLIC PROCUREMENT PROCESS. PARTICULARITIES AND SOLUTIONS FOR OPTIMIZING PUBLIC PROCUREMENT IN ROMANIA IN THE CONTEXT OF EMERGENCY CAUSED BY THE COVID-19 CRISIS

Public procurement involves adequate risk management, specific to the procurement portfolio established at the level of the organization. In order to achieve the proposed objectives, in accordance with the regulated framework established at the level of public institutions from Romania, decisions made at the level of contracting authorities must be based on risk management tools and mechanisms. These tools and mechanisms are defined on the basis of analyses of public procurement processes, carried out in compliance with the legal framework applicable at both European and national level. The new context created at the level of the contracting authorities in Romania, with the onset of the COVID-19 crisis, forced the management factors to adopt emergency decisions, to manage new risks and to implement rapid changes in public procurement processes, in the context of high uncertainty. This paper aims at analyzing the way decisions are made at the level of contracting authorities in Romania, in order to identify specific risk management mechanisms, based on the assessment and anticipation of risks related to public procurement organized in an matter of emergency.