4. The procurement process
89 pdg Partnership for Democratic Governance
Case Study 9. Southern Sudan: the importance of getting the procurement process right
In 2005, after 22 years of civil war, health service coverage in Southern Sudan was extremely limited. Where services existed, they were provided by non-governmental organisations (NGOs), the church and other non-governmental agencies, together with local communities. In 2006, a joint government-donor Umbrella Health Programme was established. The programme aimed to contract lead NGOs to work in consortium with other local partners. Their task was to deliver immediate basic health care to up to 50% of the population in each of Southern Sudan’s ten states while the core capacities of the government health system were developed. The procurement process for delivering basic health packages in the ten states was launched in April 2006, using World Bank procedures. Expressions of interest (EoIs) were requested from NGOs interested in acting as a lead agent in a state. However, the government only received adequate responses from NGOs from four out of the ten states. It therefore moved to the request for proposal (RFP) stage with the first four states in November 2006, while reissuing the EoI for the remaining six states in 2007. Once the detailed proposals were received from NGOs for the first four states, it became clear there was a significant problem. The proposals received were for significantly higher amounts than the funds available for each state, often by a multiple of ten or more. The Ministry of Health therefore embarked on an extended contract negotiation process with the four selected NGOs, which lasted from 2007 until 2008. Following these extended negotiations, the basic health delivery contracts began in two states in the second half of 2008, a full two years after
the Umbrella Health Programme had been established. Contracts also began in a further two states in 2009. Meanwhile, the Ministry of Health issued pdg Partnership RFPs for the remaining six states in mid-2008. for Democratic Governance
These delays meant that the Umbrella Health Programme failed to meet its initial objective: the immediate delivery of essential services. More than three years after the programme was approved, only four states had started to receive basic health services. The delays can be attributed to a combination of factors, including: • The lead times involved in procurement using World Bank procedures, exacerbated by limited procurement capacity in the Ministry of Health, and the need to process World Bank “no objections” through Washington. • Ambitious initial programme design, which subsequently required protracted contract negotiations to scale contracts back to the limits of affordability. • Limited capacity of NGOs to understand or comply with the procurement procedures used, or to meet the necessary service delivery standards. • The requirement for lead NGOs to provide bank guarantees for 20% advance payments before mobilising. Lessons learned: A decision to contract out service delivery must be accompanied by a procurement process which reflects the situation, including the capacity of the government to manage procurement processes, and the capacity of targeted providers to comply with them.
Source: Davies, F. (2009), “Contracting Out Government Functions and Services in Southern Sudan”, in OECD (2009) Contracting Out Government Functions and Services, OECD, Paris
OECD PDG HANDBOOK ON CONTRACTING OUT GOVERNMENT FUNCTIONS AND SERVICES IN POST-CONFLICT AND FRAGILE SITUATIONS © OECD 2010