2011 - UNCITRAL Model Law on Public Procurement PRINT E-mail

In 1994 UNCITRAL issued its Model Law on Procurement of Goods, Construction and Services (the PP Model Law). In 2004 UNCITRAL's working group on procurement was charged with updating the PP Model Law to reflect new procurement practices, in particular regarding electronic procurement (e – procurement) and related aspects of electronic commerce, and the experience gained in the use of the PP Model Law as a basis for legal reform.

The result is 2011 UNCITRAL Model Law on Public Procurement, which was adopted on July 1st 2011. The law is a template available to national governments seeking to introduce or reform public procurement legislation for their internal market. It is intended to provide all the essential procedures and principles for conducting various types of procurement proceedings in a national system, and can be flexibly implemented to accord with local circumstances, while preserving the desired outcomes (that is, seeking to harmonize procurement law, rather than imposing mandatory text as a convention or treaty would). Prepared with a view to supporting the harmonization of international standards in public procurement, the 2011 UNCITRAL Model Law takes into account the provisions of the WTO Agreement on Government Procurement, the European Union Directives (on procurement and remedies), the UN Convention Against Corruption, the Procurement Guidelines and Consultant Guidelines of the World Bank and the equivalent documents of the IFIs.

Need and Relevance of the Law

The nature of procurement is such that it involves discretionary decision-taking on behalf of the government at all levels; procurement spending may represent 10-20% of GDP and up to 50% or even more of total government spending. Further, the nature of procurement necessarily involves a risk of abuse and the size of the market shows that potential losses could be significant, but also procurement involves important projects in the areas of health, education and infrastructure all of which have a major impact on the economy and development of a country. Accordingly, achieving value for money in procurement and avoiding abuse are critical.

UNCITRAL's original work on public procurement was undertaken in response to the fact that in a number of countries, particularly developing countries the existing legislation governing procurement was perceived to be inadequate or outdated, resulting in inefficiency in the procurement process, abuse and the failure of the public purchasers to obtain adequate value in return for public funds expenditure. Its work since 2004 has focussed on updating the 1994 Model Law to include new procurement practices and modernise existing practices in e-procurement as mentioned above, introducing framework agreements, new procurement methods for complex procurement, and streamlining the text to make it easier to use.

Scope of the law

The 2011 UNCITRAL Model Law states in Article 1 that the scope of application of the law applies to all public procurement. Article 1 of the 1994 PP Model Law excluded defence procurement and allowed enacting States to exempt other sectors of the economy. The 2011 Model Law therefore represents a significant development in terms of coverage.

There are various options provided in the text to define the concept of ' procuring entity' reflecting different notions of the public sector found among States, making it clear that the law is intended to address public and not private sector procurement. There is no general threshold below which the UNCITRAL Model Law's provisions do not apply, by contrast with other international procurement texts.

Objectives of the law

The PP Model Law has six main objectives set out it in its Preamble, as follows:

a. Maximizing economy and efficiency in procurement.

b. Fostering and encouraging participating in procurement proceedings by suppliers and contractors, especially where appropriate, participation by suppliers and contractors regardless of nationality, thereby promoting international trade.

c. Promoting competition among suppliers and contractors for the supply of the goods, construction or services to be procured.

d. Providing for the fair and equitable treatment of all suppliers and contractors.

e. Promoting of the integrity of , and fairness and public confidence in, the procurement process.

f. Achieving transparency in the procedures relating to procurement.

Key provisions of the 2011 UNCITRAL Model Law

The Model Law has a number of Key provisions which aid in streamlining the overall public procurement process.

  • The Model Law allows government purchasers to take advantage of modern commercial techniques, such as e-procurement and framework agreements, to allow them to maximize value for money in procurement.
  • The law contains provisions to allow for several types of procurement namely: standard procurement, urgent or emergency procurement, simple and low-value procurement, and large and complex projects (in which, and where appropriate, the government can interact with potential suppliers and contractors to obtain the best solution to its needs).
  • While the government purchaser has discretion in deciding what to purchase and how to conduct the procurement, that discretion is subject to safeguards that are consistent with other international standards - notably, those imposed by the United Nations Convention Against Corruption.
  • The law provides that all procedures are subject to rigorous transparency mechanisms and requirements to promote competition and objectivity.
  • All decisions and actions taken in the procurement process can be challenged by potential suppliers.

The UNCITRAL website records that approximately 30 States enacted legislation based on the 1994 Model law. Its influence has probably been broader and deeper that this list might suggest; it is anticipated that the 2011 Model Law will enjoy similar success.

© 2011 European Bank for Reconstruction and Development | E-mail Us | Terms and Conditions | Users | godaddy