Public Procurement Environment
in
Europe and Central Asia:
World Bank Perspective
Devesh Mishra
Regional Procurement Manager
Europe and Central Asia Region/The World Bank
Sixth Regional Public Procurement Forum
Istanbul: April 26-29, 2010
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Content
 Background
 Bank’s involvement
 Recent Developments
 Central and Eastern European Countries/Issues with
Procurement Harmonization with EC
 South Eastern European Countries ( Balkans)
 Turkey
 Ukraine, Moldova, Belarus
 Russia
 Armenia, Azerbaijan, Georgia (Caucasus)
 Central Asian Countries
 Quick Lessons from Use Of Country System Pilot
 Way Forward
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Background
• Establishment of new independent countries and
introduction to market economy after collapse of
Soviet Union
• Introduction of new public procurement laws, mostly
based on UNCITRAL Model Law (1994): Revision
expected in 2010/2011
• WTO – Government Procurement Agreement (1996)
• European Directives on Public Procurement (2004)
• World Bank working closely with other international
institutions (EC, EBRD/ EIB, IsDB, ADB) in the area of
public procurement reforms to approach their
common client countries with the same voice
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Bank’s Involvement
1.
2.
Key priority for the Bank is to improve country public procurement
systems for a real impact in the countries.
Maintaining continuous dialogue with the countries on public
procurement
i.
ii.
iii.
iv.
3.
4.
5.
Conducting diagnostic work (CPARs, Joint Fiduciary Assessments, PEFA),
Providing technical assistance through IDF Grants Examples: Armenia,
Moldova, Kyrgyz, Azerbaijan, Turkey , Georgia etc
Reviewing and providing comments on draft public procurement legislation
(PPLs, SBDs and Manuals)
Introducing policy actions through DPLs / PRSCs,
Capacity building and institutional strengthening in countries
Moving forward with the use of country systems in procurement,
conducting assessments in line with the Board Paper on Use of
Country System(UCS)
Collaborating with other donors and international institutions.
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Central and Eastern European Countries (Romania, Bulgaria,
Croatia, Poland, Latvia, Lithuania, Slovenia, Czech Republic,
Estonia, Hungary, Slovak Republic)
a)
b)
c)
d)
e)
f)
First public procurement laws based on UNCITRAL Model
Law in mid 1990s
EU Accession was the main driving force for all of these
countries to improve their legislation and adopt modern
public procurement laws
New public procurement laws in 2000s with several
amendments to ensure full compliance with EC Directives
WB, EBRD, EIB, EC supported the public procurement
reform through technical assistance, grants and several
diagnostic studies.
Poland: New Law in 2009: One of the pilot country for Use
of Country System
Modernization through e-procurement.
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Key Issues in Procurement Harmonization with the European
Union
1.
2.
3.
Eligibility:
– WB: No restriction based on nationality
– EU: Directives are silent on eligibility.(54 countries are directly or indirectly concerned by
EU procurement Framework)
– Solution: Will be dealt on a case by case when they arise( if there is restriction to access
the complaint system by foreign firms)
Use of procurement methods (Open Competitive Bidding vs Restrictive Procedure):
– WB: LIB is used only under certain conditions.
– EU: Both can be used. Open procedure not the default method. RP may limit the
number of bidders.
– Solution: Under RP all qualified bidders shall be invited.
Evaluation of Bids:
–
WB: Award to the lowest evaluated substantially responsive bidder, no merit point
evaluation, bid evaluation by excluding import duty and taxes.
–
EU: Use of price and non-price criteria in evaluation, bid evaluation by including all
taxes and duties.
–
Solution: Evaluation criteria should be objective and disclosed in the procurement
notice and bidding documents, EU import duties and taxes are low and have negligible
effect on bid evaluation. WB will only finance such a contract if a ranking of an non-EU
bidder is not negatively effected by inclusion of duties.
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Key Issues in Procurement Harmonization with
the European Union(contd.)
4. Procurement Procedures for Consulting Services:
–
WB: Separate methods for consulting services.
–
EU: Same three methods (Open, Restricted and Negotiated Procedures)
apply.
–
Solution: Restricted Procedure can be adopted for the use of consultant
selection similar to QCBS.
5.Two-Stage Bidding vs Competitive Dialogue: These are similar but
different in approach.
6. Negotiated Procedure:
–
WB: Negotiations are not permitted, except under certain
circumstances.
–
EU: Negotiations are permitted simultaneously with two or more
bidders.
–
Solution: Will be dealt on a case by case basis.
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South Eastern European Countries / Balkans (Albania,
FYR Macedonia, Serbia, Bosnia, Kosovo, Montenegro)
a.
b.
c.
d.
e.
f.
g.
First public procurement laws based on UNCITRAL Model Law in late 1990s
or early 2000s
EU Accession is a very important incentive for all of these countries to
improve their legislation and align with EC Directives. Even though there are
several improvements, many challenges still remain.
New public procurement laws are dated late 2000s and few of these are
mostly in compliance with EC Directives, though implementation issues
remains due to inadequate capacity
Albania: First country in the region to carry out OECD-DAC benchmarking
in 2006 and has implemented several procurement reforms
FYR Macedonia: PPL aligned with EC Directives. One of the Countries as
pilot for Use of Country System
Kosovo: Bank conducted an Operations Procurement Review in 2004 and
worked on improving the PPL with the government
WB, EBRD, EIB, EC supported the public procurement reform through
technical assistance, grants and several diagnostic studies.
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Turkey
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
Old public procurement law dated 1983
CPAR (2001) was very timely and recommendations were taken
seriously
New public procurement law dated 2002
Public procurement reform implementation support through IDF
Grant (2002 – 2005)
Series of amendments to make the law in line with EC Directives are
done, but more needs to be done for full compliance
Regulatory Agency – Public Procurement Agency
Independent Complaint Review Body – Public Procurement Agency
WB, EC supporting the public procurement reform through technical
assistance, grants and several diagnostic studies
Has done pioneering work in public procurement to be used as a
model for the entire region
Was “pilot” of pilot for Use of Country System in Bank-funded
operations in 2008
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III. Ukraine, Moldova, Belarus
a. First public procurement laws based on UNCITRAL
Model Law in early 2000s
b. First generation CPARs are prepared in early 2000s and
second generation CPARs are being conducted by
incorporating OECD/DAC methodology for assessment
of National Procurement Systems in late 2000s
c. Several IDF Grants to support the public procurement
reform agenda
d. Current public procurement laws dated late 2000s
e. Ukraine: revising again its PPL- WB/EC engaged
f. Moldova: CPAR 2010 being done using OECD-DAC
benchmarking
g. Belarus: Presidential decree on supplies of goods for
state needs. Draft PPL.
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Russian Federation
a. New public procurement law dated 2005.
b. While there are several improvements in the
public procurement area, there are many
deficiencies and negative aspects of the laws yet
to be addressed.
c. WB, EBRD, EIB, EC supporting the public
procurement reform through technical
assistance, grants and several diagnostic studies.
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Caucasus (Azerbaijan, Armenia,
Georgia)
a. First public procurement laws based on UNCITRAL
Model Law in early 2000s
b. First generation CPARs in early 2000s and second
generation CPARs incorporating OECD/DAC
methodology for assessment of National
Procurement Systems in late 2000s
c. Several IDF Grants to support the public
procurement reform agenda
d. Current public procurement laws dated late 2000s
e. Bank has recently carried out CPAR for all the three
countries using OECD-DAC Benchmarking tool
f. In active dialogue with the government to
implement CPAR recommendations.
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Central Asian Countries (Kazakhstan, Kyrgyz Republic,
Turkmenistan, Tajikistan, Uzbekistan)
a. First public procurement laws in late 1990s
b. First generation CPARs in early 2000s and second
generation CPARs incorporating OECD/DAC
methodology for assessment of National
Procurement Systems in late 2000s
c. Current public procurement laws dated late 2000s
and mostly in line with internationally accepted
standards, but still some countries do not have any
public procurement law at all
d. Weak capacity and widespread implementation
issues exist
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Central Asian Countries (Kazakhstan, Kyrgyz Republic,
Turkmenistan, Tajikistan, Uzbekistan
)
• Kazakhstan: Hosted 2006 Central Asia Public Procurement
Forum, Bank carried out limited assessment in 2005, OECDDAC Benchmarking likely in 2011
• Kyrgyz Republic: Hosted 2007 and 2009 Forum, IDF Grant,
CPAR 2007. Reorganization of public procurement agency
• Turkmenistan: No PPL, IDF grant in 1996.More work needed
• Tajikistan: Hosted 2008 Forum, CPAR 2003
• Uzbekistan: No PPL, Multiple bodies on public procurement
control, issues of import contract, Country Fiduciary
Assessment 2010 in progress.
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Quick Lessons from Use of Country
System Pilot
• Need to develop capacity of procurement officials to
implement in accordance with the laws and regulations
• Weak complaint handling mechanisms
• Lack of full range of model bidding documents and general
conditions of contracts but most countries do have
documents for goods and works
• Lack of generic users’ guide
• Handling of selection of consultants differs from Bank’s
Guidelines
• Dispute resolution procedures do not use arbitration
• Lack of information on enforcement of dispute resolution
decisions or compliance with the PPL
• Procurement is not seen as a profession
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Way Forward
• What are the common lessons from the
experience of ECA Client countries ?
• Lessons from UCS pilots?
• How different funding agencies and client
countries work together to improve the public
procurement system in ECA region?
• How to we make our sharing knowledge
sustainable, more effective and actionable?
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