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4. The procurement process pdg Partnership for Democratic Governance
4.2. Defining and initiating the contract In this initial stage of the procurement process (Figure 4.1), the government:
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Partnership • develops a service strategy; for Democratic Governance • identifies the service needed; • identifies the required capacity for long-term service provision and how it will be developed; • ensures the adequacy of funding; and • defines the contractual approach.
The outcome of this process is a well-defined service that can be readily tendered for and executed. Each step in the process is discussed in turn below.
Develop a service strategy The partner government should ideally first develop a strategy to guide service delivery. A service delivery strategy helps a government meet its service goals and objectives and provide an integrated and efficient service to the community. A strategy will also help government co-ordinate its service delivery with other services that may be externally delivered by multilateral organisations or bilateral donors. Strategies can be: • Sectoral – such as for health or education – and can address a range of subsectors, such as infant health or adolescent health. • Regional or local, particularly if the needs of different areas – such as rural and urban areas – differ considerably. • Designed to assist in the delivery of government functions, for example defining how an agency will undertake its financial management responsibilities. In this respect, a government strategy for service delivery is a critical tool for determining how the agency will meet these responsibilities and best use limited resources.
In developing a strategy, it is important to consider the risks of the various options, which can be political, organisational, financial, and operational. Risk assessment (referred to in Chapter 2) directly affects the procurement process. For example, in reviewing potential service providers, the partner government may decide that, due to capacity limitations (e.g. organisational weakness), local contractors are a more risky option for providing rural health services than international NGOs. This would be reflected in the subsequent procurement plan by targeting service providers in the international community. >TIP: Preparing and identifying a strategy helps the government to develop and define its service goals and objectives. However, in fragile situations there may be urgent requirements that should not wait for a strategy to be developed. In such instances, a short-term contract (i.e. 6-12 months’ duration) can be used while the government refines its strategic approaches. The lessons learned from the interim contract can then be built into the longer-term contracts.
Identify the service goals, objectives and priorities The next step in the planning process is to ensure that the service goals, objectives and priorities are clear. Key questions to be answered include: • What is needed, who requires it and can it be clearly defined? • What outcomes do we want and are they realistic? • How can we achieve these outcomes? • When, where, how often, or for what period of time are these services required? • Is the need urgent and can how quickly can it be met?
OECD PDG HANDBOOK ON CONTRACTING OUT GOVERNMENT FUNCTIONS AND SERVICES IN POST-CONFLICT AND FRAGILE SITUATIONS © OECD 2010