The OECD perspective :Public procurement outside the UE frameworkframework

A New framework for public procurement

Paulo MaginaHead of the Public Procurement UnitPublic Sector Integrity Division, Public Governance Directorate

Madrid, 10 April 2018

The OECD

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Spanning a variety of policy areas:Better policies for better lifes

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The OECD provides a forum where countries compare and exchange policy experiences, identify good practices, discuss emerging challenges and adopt recommendations for better policies.

35 member countries, 3 accession 5 Key partners

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OECD - Fast Facts

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5

€370 Million

Part of a global community

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THE CRITICAL ROLE OF PUBLIC PROCUREMENT: PUBLIC PROCUREMENT:

WHY IT MATTERS ?

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MEX

IRL

CHE

USA

PRT

ITA

ESP

TUR

GRC

OECD

LUX

LVA

POL

KOR

AUS

SVN

29.1

2015

2009

2007

11.9

Government procurement as share of GDP and of total govt. expenditures

Public Procurement matters…6.4 trillion EUR spending in OECD

SVN

CAN

AUT

GBR

ISL

NOR

EST

DNK

ISR

BEL

CZE

FRA

NZL

DEU

SWE

HUN

JPN

SVK

FIN

NLD

CRI

RUS

LTU

ZAF

COL

in terms of GDP in terms of general government expenditure

0 5 10 15 20 25 30 35 40 45(%)05101520

(%)

Source: OECD National Accounts Statistics. (2017)

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…managed at all levels of government

63.2

80

100

Central government (2015) Sub-central government (2015)

General government procurement by levels of government

36.8

63.2

0

20

40

60

NZ

L

IRL

GR

C

ISR

PR

T

SV

K

TU

R

HU

N

LU

X

ES

T

SV

N

LV

A

GB

R

ISL

NO

R

CZ

E

KO

R

PO

L

AU

T

FR

A

NLD

OE

CD

DN

K

ME

X

US

A

SW

E

JPN

FIN

CH

E

DE

U

ITA

ES

P

BE

L

CA

N

CR

I

LT

U

CO

L

Source: OECD National Accounts Statistics. (2017) 9

Public procurement has high implications for public service delivery

Health

30%

Economic affairs

17%

Structure of general government procurement spending in OECD countries (2015)

17%

Education

12%

Defence

10%Social

protection

10%

General public

services

9%

Public order and

safety

4%

Environmental

protection

3%

Recreation, culture

and religion

3%

Housing and

community

amenities

2%

Source: OECD National Accounts Statistics. (2017) 10

Public procurement has high implications for public service delivery (cont’d)

Structure of general government procurement spending (2015)

Source: OECD National Accounts Statistics. (2017)

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THE OECD WORK:

IMPROVING PP STANDARDS

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For over a decade the OECD has supported governments in reforming their public procurement systems to ensure long-term sustainable and inclusive growth and trust in government by:

1) Providing international standards on public procurement;

The OECD work on Public Procurement

2) Undertaking hands-on peer reviews that provide assessment of public procurement systems, either national or sectorial, and tailored proposals to address implementation gaps in specific contexts: USA, Chile, Germany, Greece, Korea, Colombia, Mexico, Peru, etc.;

3) Bringing together a community of practice on procurement to shape directions for future reforms: the Leading Practitioners; 13

4) Organising policy dialogue on the co-operation between government and the private sector also in the framework of the G8 and G20;

5) Collecting analytical, useful and reliable evidence across OECD countries on the performance of public

The OECD work on Public Procurement

across OECD countries on the performance of public procurement operations as well as the impact of procurement on broader public policy objectives: Green, Innovation, SMEs;

6) Coordinating the MAPS revision through leading a diversified working group composed of many MDBs, IOs, developing partners and countries.

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The OECD’s experience in working with public procurement shows that a sound procurement system includes:

a) procurement rules and procedures that are simple, clear and ensure access to procurement opportunities;

Main findings from the OECD work

and ensure access to procurement opportunities;

b) effective institutions to conduct procurement procedures and conclude, manage and monitor public contracts;

c) appropriate electronic tools;

d) suitable, in numbers and skills, human resources to plan and carry out procurement processes; and

e) competent contract management.15

The 2015 Recommendation on Public Procurement : 12 integrated principles

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Assessment tools, MAPS Key

performance indicatorseProcurement

Supporting countries by building evidence

Strategic use:• Green• SME• Innovation

Professionalisation

G@G:Government at a

Glance

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� Toolbox - innovative, practical, collaborative solutions

SUSTAINABILITY &STRATEGIC PUBLIC STRATEGIC PUBLIC

PROCUREMENT

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Development of PP Strategy/ Policy to support secondary policy objectives (2016)

Never been developed

Has been rescinded4%

24%

55%96%

Green Public Procurement

3%

24%

66%97%

Support to SMEs

Developed by some

procuring entities

Developed at the central

level

Developed at the central

level and by some

procuring entities

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17%7%

45%

7%

38%

10%

55%

Support to responsible business

conduct

17%

24%

48%

11%

83%

Support to procure innovative

goods and services

Countries increasingly use procurement to achieve broader policy objectives

Mandatory Use of Public Procurement for Secondary Policy Objectives

50%

60%

70%

80%

90%

100%

No, it is not mandatory and

targets are not in place51.5%

50%

60%

70%

80%

90%

100%

20

goods and services

0%

10%

20%

30%

40%

50%

Green public

procurement

Support to Small

and Medium

Enterprises

Support to

procure

innovative

goods and

services

targets are not in place

No but it Is subject to

defined targets

Yes, it is mandatory but

targets are not defined

Yes, it is mandatory and

targets are defined

45%

21%

<2016>

30.3%

12.1%

0%

10%

20%

30%

40%

50%

Green public

procurement

Support to

Small and

Medium

Enterprises

Support to

procure

innovative

goods and

services

Yes, it is

mandatory

<2012>

59%

% of countries that measure the results of their public procurement to boost…

Measuring results: Strategic procurement

…Green Objectives …SMEs…Innovative Goods &

Services

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Austria

Japan

Korea

Sweden

Turkey

Australia

Belgium

Canada

DenmarkEstonia

Finland

Germany

Ireland

Latvia

Mexico

Netherlands

New Zealand

Norway

Spain

Yes:

26%

No:

74%

AustraliaChile

Germany

Hungary

Ireland

Israel

Japan

Korea

Mexico

NetherlandsSlovak

Republic

SwedenTurkeyAustria

Belgium

Canada

Denmark

Estonia

Finland

Greece

Latvia

New Zealand

Norway

Portugal

SloveniaSpain

Yes:

50%No:

50%

AustriaChile

Denmark

Finland

Germany

Hungary

Iceland

Israel

Japan

Korea

Latvia

Poland

PortugalSlovak

RepublicSlovenia

Spain

Sweden

Turkey

Belgium

Canada

Estonia

Greece

Ireland

Mexico

Netherlands

New ZealandNorway

Yes:

67%

No:

33%

EFFICIENCY ENABLERS

BENCHMARK ONBENCHMARK ONCENTRAL PURCHASING

BODIES

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Central Purchasing Bodies in OECD

IcelandKorea

Mexico

Portugal

Slovenia

TurkeyNorway

Slovak Republic

Spain

Sweden

JapanNetherlands

One CPB at the central level

22%

NO CPB7%

Australia

Austria

Canada

Chile

Denmark

Estonia

Greece

IrelandIsraelLatvia

New Zealand

Poland

Belgium

Finland

Germany

Hungary

Italy

More than one CPB at the central level

41%

CPBs at the central and

regional level30%

Source: 2016 OECD Survey on Public Procurement (29 OECD countries)23

No CPB:

12.1%State-owned

Enterprise:

15.1%

Legal status of CPBs

Ireland

Under Ministry:

27.3%

Government Agency:

45.5%

Source: 2014 OECD Survey on Public Procurement24

Framework agreements established by the CPBs are subject to…

AustraliaAustria

Canada

Chile

Denmark

EstoniaSlovak Republic

France

Germany

Greece

IrelandSweden

Mandatory

use by all CAs

(8%)

Voluntary use

(19%)

… however, regardless of the arrangements, CPBs need to keep the terms of their instruments competitive with respect to the market.

Finland

Hungary

Iceland

Israel

Italy

LatviaMexicoNew Zealand

Norway

Poland

Portugal

Slovenia

Spain

Korea

Mandatory use by

CAs at the central

level (73%)

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Use of central purchasing

60%

80%

100%

Use of central purchasing in OECD countries (2016)

0%

20%

40%

PC, Printers Stationery

and Paper

Medical

goods and

services

Fuel Telephony Software Travel Energy Cleaning

services

Surveil lance

services

Public works

and

constructions

Canteens Consulting

Central purchasing is used Framework agreements are used in central purchasing

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MAPS:

METHODOLOGY FOR ASSESSING

METHODOLOGY FOR ASSESSING

PROCUREMENT SYSTEMS

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End of a two -year journey

Spring 2015 Revision launchedJuly 2016 First draft of the revised tool

Summer 2016 Consultation: public feedback Winter 2016/17 Testing in Chile, Norway, Senegal

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Winter 2016/17 Testing in Chile, Norway, SenegalFall 2017 Revised core MAPS finalisedFall 2018 Global launch of the final tool

2018 MAPS Secretariat

What is the new MAPS?

Methodology for Assessing Procurement Systems

• Ambitious, universal tool for all countries to evaluate how well their public procurement systems worksystems work

• Used in the past 10 years in developing countries (over 90 assessments)

• Revision process in place since April 2015, linked to international standards, e.g. OECD Public Procurement Recommendation also aligned with the UN Sustainable Development Goals (SDGs)

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• SDG Target 12.7– “Promote public procurement practices that are

sustainable, in accordance with national policies and priorities”

� MAPS Indicator 3(a): Sustainable Public Procurement

MAPS and the SDGs

� MAPS Indicator 3(a): Sustainable Public Procurement

+ Optional Module

• SDG Target 16.6– “Develop effective, accountable and transparent

institutions at all levels”

� MAPS Indicators 5, 6, 8, 12, 13

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• Harmonized tool…to conduct an assessment of PP systems

• Universal tool, mutually reliable

Characteristics of the new MAPS

• Universal tool, mutually reliable…for all countries: Considers country context and political environment

• Reform tool…to develop systems: Initiate improvements, encourage dialogue, monitor progress

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The MAPS Analytical Framework

MAPS

Pillar I Pillar II Pillar III Pillar IV

Sup

plem

enta

ry M

odul

es

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Legal, Regulatory and Policy Framework

3 indicators, 18 sub-indicators

Institutional Framework

and Management

Capacity

5 indicators, 14 sub-indicators

Procurement Operations and Market Practices

2 indicators, 6 sub-indicators

Accountability, Integrity and Transparency

4 indicators, 17 sub-indicators

Ana

lysi

s of

Cou

ntry

Con

text

Use

r's G

uide

Glo

ssar

y

Sup

plem

enta

ry M

odul

es

ONGOING PROJECTS IN EU COUNTRIES:

- STRATEGIC PROCUREMENT- LITHUANIA- GERMANY- GERMANY- FINLAND

COMING: COMPETENCY FRAMEWORK; GREECE; MALTA

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• Initiative launched by the Directorate-General for Regional and Urban Policy- DG REGIO

• The project (implemented by the OECD) aims at promoting the use of strategic procurement in the context of Cohesion Policy :

The project

context of Cohesion Policy :

� Green public procurement (GPP) �Socially responsible public procurement �Public procurement for innovation �Better access for SMEs

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• Managing authorities

• Relevant authorities responsible for public procurement in all Member States implementing ESIF funded projects.

Targets

implementing ESIF funded projects.

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1- Providing practical “hands-on” support to implement or promote strategic public procurement such as:• assist contracting authorities to run the pre-market

consultation, • define selection and award criteria,• select procurement procedure,

How to promote the strategic use of Public Procurement?

• select procurement procedure, • ensure good governance and coordination during the

implementation phase

2- Developing support material to help Member States implementing Strategic public procurement

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Selection criteria:

• Project should receive co-financing from ERDF orCohesion Fund (approved/secured)

• Timing: tender procedure should not yet have been

How to promote the strategic use of Public Procurement?

• Timing: tender procedure should not yet have beenlaunched; the tender procedure should be initiated withthe issuance of the tender in the next 2 to 14 months

�It requires sending the expression of interest toREGIO-E1-DMINISTRATIVECAPACITY@ec.europa.euby 20 April 2018.

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For more information on OECD work on public

procurement

http://www.oecd.org/gov/public-procurement/

Lithuania: an OECD/ European Commission partnership

• The European Commission in the area of

public procurement under Regulation (EU)

2017/825 on the establishment of the

Structural Reform Support Programme

("SRSP Regulation) has agreed to provide ("SRSP Regulation) has agreed to provide

financial support to the OECD to provide

technical support to Lithuania in the area of

public procurement.

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• To improve the efficiency of the national procurement system by raising the level of competency of the public buyers at the central and local level

Objectives of the Project

• To rationalize the system for procurement of R&D services in order to achieve higher economic impact in Lithuania.

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Description of the Action’s components

Evaluation of training needs, definition of training priorities and the development of training programs

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Development an integrated system for public procurement of R&D services