3. Contracting out and capacity development
73 pdg Partnership for Democratic Governance
One element of capacity assessment includes examining the number, qualifications, skill levels, availability, and distribution of staff capable of undertaking the various tasks associated with contracting out. Clearly, without appropriately qualified people willing and able to take on these tasks, neither the government nor potential service contractors will be in a position to successfully pursue contracting out. Stakeholder analysis can be helpful to map the range of interests associated with contracting out for services, and to determine where there might be champions supportive of contracting out.2
Individual technical capacities include competent professionals, such as lawyers, accountants, and financial managers, all of whom are needed to manage the procurement process and contract administration. Individuals with technical knowledge of, and experience in, the sectoral services that are topdg be Partnership contracted out (for example, health, education, mufor Democratic Governance nicipal services) are needed by government in order to design contracts effectively and exercise appropriate oversight and quality control. Such individuals are also necessary for non-state suppliers.
2. The UK’s Overseas Development Institute provides additional information on stakeholder analysis at www.odi.org.uk/Rapid/ Tools/Toolkits/Communication/Stakeholder_analysis.html
Box 3.3. Contracting out champions: pros and cons
Capacity at the leadership level of government is an important consideration particularly for contracts that are large, highly visible or controversial in some respect. A champion at the leadership level who can provide vision, anticipate and address political obstacles and build support for contracting out can be a critical component in creating an effective enabling environment. Concerns may be encountered from other ministers, other
government institutions or bodies, local community representatives or other stakeholders. Strong leadership can address these concerns so that they do not obstruct the procurement process and delay the delivery of critical services. On the down side, relying solely on a leader can make procurement overly dependent on a single individual retaining their post, or politicise a programme which is not inherently political in nature.
3.3. Contracting out when capacity is almost non-existent: the use of procurement agents Where an assessment reveals the enabling environment to be especially weak, the government can contract out the procurement function itself; for example, in Afghanistan a centralised procurement agent was set up through a contract (see Case Study 6). The procurement agent acts on behalf of the government to manage the acquisition of services and products. Typically the agent will manage all aspects of one or
more procurements and will charge a fee for its services. A procurement agent is usually a firm that specialises in purchasing goods and services. Normally, the procurement agent would follow the procedures set out in the country’s own laws and regulations, but in some cases procedures may be determined by donors. In the latter case, it is even more important to have a procurement agent to manage donor requirements.
OECD PDG HANDBOOK ON CONTRACTING OUT GOVERNMENT FUNCTIONS AND SERVICES IN POST-CONFLICT AND FRAGILE SITUATIONS © OECD 2010