EBRD’s Legal Panel ‘Are you ready for eProcurement?’ held during the 2014 EBRD Annual Meeting and Business Forum, Warsaw, Poland on 15 May 2014, explored current best practice in public procurement policy.
Improving public procurement frameworks is high on the agenda of many countries in the EBRD region as countries seek to make optimal use of budget resources and to develop and promote anti-corruption initiatives.
With a focus on the use of eProcurement tools, recent success stories and the impact international organisations can have in this area, the Panel discussion drew an audience of experts and interests from across EBRD's stakeholder community.
Opening the Legal Panel ‘Are you ready for eProcurement?’ Principal Counsel - Public Procurement, Legal Transition Programme, EBRD, Eliza Niewiadomska, commented "EU directives have brought totally new standards to our region, requiring EU Member States to introduce eProcurement as the main tool for public tenders. The new requirements force countries to rethink their procurement systems, redraft laws and make online communication standard for everyone in the market.”
Other new procurement practices are rapidly emerging in the market, prompting revisions across many jurisdictions. In the last two years alone, several key international instruments for public procurement have been updated: the 2011 UNCITRAL Model Law on Public Procurement replaced the 1994 version; and the 2012 World Trade Organization revision of the Government Procurement Agreement enters into force in 2014.
New and revised policies aim to ensure that public procurement can deliver better value for money and provide the tools for stable, economic development that enshrines principles of transparency in procurement decision-making.
Such new approaches have been particularly effective in Georgia, where, until new policies were adopted, the State was losing half a million dollars a day through waste and corruption.
“This was the amount we were losing every day before the start of reforms,” said Tato Urjumelashvili, former Chairman of the Competition and State Procurement Agency of Georgia and now International expert, EBRD UNCITRAL Initiative. With regards to the introduction of new procurement policies, Mr Urjumelashvili added "When we realised that, we were like crazy, saying “Hurry up, hurry up reform work.”
The previous system for supervising procurement in Georgia also involved an office containing 15 million procurement reports per year monitored by only 20 civil servants. It was plagued by inconsistent and unreliable data housed in spreadsheets or scanned documents. “Even an angel will be spoilt if he is responsible for US$ 1.8 billion a year in these circumstances,” said Mr Urjumelashvili.
The new approach to regulating procurement is based on introducing electronic procurement (eProcurement) for default mandatory use in the public sector. eProcurement – online procurement procedures which are automatically recorded in real time – enhances both the transparency and efficiency of public contracts.
Thanks to information and communication technologies, this improvement in transparency and accountability comes at no extra cost. And with economies of scale and greater competition, more transparent online procedures deliver better value for money.
In addition, by ensuring more open and equal access to procurement opportunities for local and international suppliers and contractors alike, including small and medium-sized enterprises (SMEs), eProcurement supports economic development.
The principles on which eProcurement are based include it being “friendly to small businesses and open to international trade,” said EBRD's Eliza Niewiadomska.
EU governments will need to work hard to master the new policies, to develop necessary regulatory capacity and to produce legal framework and operational tools, like eProcurement platforms and systems. All of which are needed to ensure that reforms are effectively implemented and to bring about the expected results.
Legal Panel: ‘Are you ready for eProcurement?’, at the EBRD’s Annual Meeting and Business Forum, Thursday 15 May, 14:00-16:00, Warsaw, Poland
- Gustavo Piga, @GustavoPiga, Professor of Economics, Department of Business, Government and Philosophy Studies, University Rome Tor Vergata, Italy
- Adam Jonczyk, Sales Director, Marketplanet, Otwarty Rynek ElektronIczny SA
- Paulo Magina, Senior Policy Analyst, Public Sector Integrity Division, OECD, former Chairman of ESPAP Portugal
- Eliza Niewiadomska, Principal Counsel - Public Procurement, Legal Transition Programme, EBRD
- Tato Urjumelashvili, EBRD UNCITRAL Public Procurement Initiative, former Chairman of the Competition and State Procurement Agency of Georgia