4. The procurement process
87 pdg Partnership for Democratic Governance
4.1. The procurement process Once the decision is made to contract out a government service or function, procuring these services involves a number of steps (Box 4.1). This chapter follows these steps, which reflect international good practice in procurement. However, as each fragile situation is unique, this chapter also outlines how the process might be modified when a country’s situation does not allow for all the steps to be taken. This chapter will provide guidance and tools for partner governments on how to design and manage the procurement process in order to maximise the probability of a successful outcome. This discussion refers to three primary public sector roles – technical, procurement and financial (see Box 4.2). Procurement can be a complex process that requires choices to be made among various alternatives. Some of the key factors in the decision-making process are highlighted in the following decision diagrams and discussed in this section. The diagrams are designed to serve as a guide or starting point for government officials when considering how to contract out government functions or services. Naturally, each government may face unique factors that should also be considered in contracting out and cannot be captured by these diagrams.
Retaining clear government ownership The parties to contracts will in most cases be a national or local government agency (the government) and a third-party service provider (the contractor). In some cases donors may be parties to contracts. In summary, contracts can be: 1. government-funded and procured; 2. donor-funded and government procured; or 3. donor-funded and procured.
Donors will usually have their own standard contract forms that they use when procuring services. pdg If donors require their procurement rules to be folPartnership lowed rather than the national procurement law the for Democratic Governance system can become rather complex. There are approaches that can be used to manage this complexity, including the use of a procurement agent and encouraging donors to allow the use of government procurement requirements. A programme strategy that positions the functions to be contracted out within the framework of government policy is particularly important in the third scenario, where contracted services or functions are financed and executed externally. In this scenario, the role of partner government policy makers and officials in providing leadership through strategy, programme design and objective monitoring is critical. This will ensure that donor-funded and executed activities are a part of the broader government strategic framework and complement other services provided directly by the partner government. The ultimate goal of contracting out is the delivery of quality services and/or government functions on a national, regional or targeted local basis. Working through contractors to achieve partner government goals requires the government to be clear about what it would like to achieve, where it should be delivered, in what quantity, over what period of time and according to which standards. The government should provide clear guidance to potential suppliers or service providers in order to better achieve these deliverables and the government’s broader goals and objectives. The procurement should also be performed in an open and transparent manner, as this will minimise the potential for corruption, and help the partner government achieve the most competitive price for the contracted services or functions.
OECD PDG HANDBOOK ON CONTRACTING OUT GOVERNMENT FUNCTIONS AND SERVICES IN POST-CONFLICT AND FRAGILE SITUATIONS © OECD 2010