U4 Helpdesk Query

U4 helpdesk reply

Having consulted relevant papers and resources of international organisations active in the field as well as having sought guidance from a Transparency International expert (Michael Wiehen), who has researched public procurement and related topics extensively, the general advice to your query can be summarised as follows (captured from different sources):

Source - OECD SIGMA Policy Brief on Public Procurement (1997): "The choice of organisational structure developed for the procurement system varies widely from country to country. No standard approach or model can be recommended and a country will often evolve from a highly centralised to a more decentralised system as public procurement entities in line ministries or local authorities gain experience and expertise. Some centralisation is required, particularly in the early stages, to define national standards and operational rules. Moreover, most countries recognise that central purchasing permits cost savings through volume purchases".

Source - M. Wiehen, Transparency International (2003): "A central procurement agency can of course be corrupted and then everything fails. But in principle, in a country with no procurement expertise, a central agency is a proven way to efficiency - and if transparency and integrity are built in as well, it may work better than training individual procurement offices of agencies, ministries, etc."

Source - paper by J. Diamond, IMF Working Paper Series (2002): "Successful procurement systems will usually have a central procurement office that sets policy and provides management within a decentralised system. However, it is not recommended that transitional economies move too fast towards this model before governance issues are sorted out."

Source - paper by W. A. Wittig (UNCTAD/WTO) on reform of public procurement, with specific information on the state of public procurement in selected countries in Africa presented at 9th IACC (1999): "With regard to institutional and administrative arrangements, in almost all cases reported, the central procurement authority is involved operationally in the conduct of procurement proceedings. Such operational activity ranges from sitting on evaluation committees, serving as the adjudicator body, or procuring country-wide or common use items. This creates an overlap between the operational and regulatory functions to the detriment of regulatory independence. In effect, the regulator and regulated become one, with the regulatory function subject to pressure and potential conflicts of interest."

While the above listed are examples of general observations and advice on the matter taken from different sources, it is crucial to keep in mind that the exact system and structure that is best suited for a particular country can only be determined after a targeted country analysis (particularly a detailed review of key state institutions with an assessment of their capacity, integrity, etc. along with an examination of past and present procurement practices, knowledge and capacity already in place or the lack thereof).

Links to papers and web resources with relevant information

Below are some links to papers and web resources that may be of interest with regards to the query. These are mostly references linking to information on public procurement systems in place in various countries.

Country Information (containing information on a number of countries' procurement systems using a standard format):

The site contains information on over 20 countries' procurement systems (brief descriptions of how central government procurement activities are administered, including appropriate description of the centralisation or decentralisation of the procurement. The systems adopted by different countries do vary enormously from being highly decentralised to being confined to central procurement bodies.
Free Trade of the Americas (FTTA) Government Procurement

The site contains data on national legislation, regulations and procedures on government procurement for a number of countries. There is a section reading "TPR Secretariat Study (Section on Government Procurement)", which contains summary reviews of each country's procurement systems in practice, including the institutional basis in place --centralised procurement office or decentralised system, etc.
WTO Government Procurement

Recent Country Examples (African countries) on the type of system adopted:

Sierra Leone: Procurement Reform Action Plan is Launched with Technical Assistance from UNDP/IAPSO, Jointly Funded By UNDP and The World Bank - from a 08/09/2003 Press Statement

"Mr. John Van de Gronden, IAPSO Director, told the assembled stakeholders of the Procurement Reform process that at the end of the first 9 months, Sierra Leone would have a restructured Central Tender Board, functioning as a supervisory and policy-setting board, with decentralised procurement offices in key line Ministries. New rules and regulations will be in place, and procurement officers and their supervisors will be trained to begin a career as professional procurement officers. The business community will receive information and orientation on the ways to benefit from a reformed system, and a draft procurement law will be ready for presentation to Parliament".

Information on Other Public Procurement Issues (not confined to the question of centralised vs decentralised institutional systems)

Should you be interested in other public procurement related aspects, particularly information on anti-corruption and integrity issues related to public procurement processes, the U4 Helpdesk can provide you with references to a wealth of such resources. You can contact the U4 Helpdesk team using the web-portal on the U4 partner website.