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4. The procurement process pdg Partnership for Democratic Governance
Answering these questions is crucial to adequately describe the service requirements to potential providers during the tendering process. Usually these questions can be answered through a needs assessment, which can be either formal or informal. The process pdg for conducting a needs assessment will depend onPartnership the nature and complexity of the services for Democratic sought, Governance as well as the capacities of government. However, it is essential that the government plays a lead role in conducting the needs assessment. A consultative process between all stakeholders involved in the service can help to define the needs and will benefit the government’s broader service delivery strategy. Consultation can take place in a formal setting or in less formal community gatherings and should ideally include:
need is urgent, then it may be preferable to address the most immediate requirements in an initial contract, while preparing another contract to address longer-term, strategic needs (see Chapter 3).
• Government decision makers • Representatives of the private sector and NGOs • International organisations that may be working in the community • Multilateral organisations or bilateral donors supporting the contracting-out process • Service recipients • Civil society and other organisations that may be interested in making proposals for how to meet community needs • Potential service providers.
As discussed in Chapter 1, needs should be defined in terms of desired outcomes where possible, but in fragile states it is much more likely that they will be defined in terms of outputs (and see Annex D). This allows the contract payments to be tied to achieving specific objectives or performance levels. This performance or output-based contracting provides incentives for the contractor to deliver the services required. This approach also reduces the potential for corruption and ensures that government objectives are clearly stated in the contract document.
A consultative process can help to build public support for contracting out, and draw the skills, knowledge and experience of the various stakeholders into the planning process. The consequences of failing to achieve adequate consensus are outlined in Chapter 2.
There is growing recognition of the relevance of output-based approaches to service delivery in fragile states. DFID and the World Bank established the Global Partnership on Output-Based Aid in 2003 to promote output-based approaches to service delivery in the water, sanitation, electricity, telecommunications, transportation, health and education sectors. Annex D illustrates how output-based approaches have been used in fragile states.
The assessment also identifies the different options for providing the service. The best option will meet the service need effectively and efficiently and will be readily executed by all parties. Identifying this option often reflects lessons learned from previous experiences or in nearby states. The availability of financial resources, capacity and time are important factors in deciding among options, as well as the region’s social, economic and political situation. If the
It is also important to consider whether the intended results and outputs are appropriate or achievable in the context. The service needed may be simply defined, such as providing access to water or healthcare to the entire population; or it may be defined in more elaborate terms, such as providing access to clean water for x percent of a local community for at least x hours per day. The details of the contract will depend on the government’s contract objectives, the contract type, and the availability of reliable quantitative data against which to assess outputs.
Identify the capacity development requirements As we outlined in Chapter 3, the government will also need to consider its long-term strategy for service delivery and the implications for capacity
OECD PDG HANDBOOK ON CONTRACTING OUT GOVERNMENT FUNCTIONS AND SERVICES IN POST-CONFLICT AND FRAGILE SITUATIONS © OECD 2010