procurement efficiency jp
DESCRIPTION
IPPC6TRANSCRIPT
Measuring Efficiency in International Public Procurement
Anjali Kumar, Arvind Nair and Juliane Piecha
International Public Procurement Conference Dublin, August 2014
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IEG WORLD BANK | IFC | MIGA
• Apply Best Practices through Procurement Guidelines
• Economy and Efficiency in Project Implementation
Fiduciary
Responsibility:
World Bank Procurement: Context
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• Reducing Transaction Costs
• Better Procurement Planning, clear and appropriate Evaluation criteria
• Effective public procurement in client countries enables better use of government budgets
Value
for
Money
World Bank policies and standard bidding documents provide many of the mechanism necessary to consider Value for Money factors.
World Bank Procurement Review Process
3
Source: World Bank, IEG
• Clients’ concerns: Timeliness, delays in procurement • Analysis of process efficiency in procurement transactions needed
“No-Objection” Steps for Prior Review
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World Bank: Procurement Efficiency Data
• Centralized system: Focus on limited key fiduciary data • Regional systems: Information for specific monitoring needs Unable to provide data for analysis of procurement process steps
Bank-wide database for contract information
Procurement Plan Execution System SEPA:
Latin America and Caribbean Region
Procurement Cycle Tracking System PROCYS:
Africa Region
Procurement Portfolio Dashboard MNA-dash:
Middle East & North Africa Region
Efforts towards integrated system:
Electronic No-Objection
Data and Methodology
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• Analysis of Contract Data: Bank Databases + Sample of 500+ contracts
• Data on prior-reviewed contracts constructed from questionnaire
surveyed in eleven client countries
• Information on dates of each step where Bank is required to provide its “No-Objection”
• Dataset records other country and contract attributes that could potentially affect overall procurement efficiency
• Average Elapsed Times, Frequency Distributions and Regression Analysis of time taken in intermediate steps of procurement process
• Current Bank tracking systems not equipped to provide key information on individual procurement process steps
Basic Sample Characteristics
6 Source: World Bank, IEG
Number of Observations by Country, Fiscal Year, Procurement Category and Sector
Average Elapsed Times
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Average Elapsed Time Between Steps in the Procurement Process all Contracts (days)
PROCUREMENT PROCESS
STEPS
Borrower
first Submission to Bank of draft Bid (preQ)
Documents
Bank final No Objection to draft
Bid (PreQ)
Documents
Borrower issue of Bid
(PreQ)
Documents
Borrower bid (PreQ)
opening
date/ Minutes
Borrower submission to
Bank of Bid Evaluation
Report
Bank No-Objection to
Bid Evaluation
Report
Date of Contract
Signature Issue of Specific Procurement Notice
171.9 169.0 135.1 126.7 226.4 253.0 269.5
Borrower first Submission to Bank of draft Bid (preQ) Documents
56.6 66.0 121.8 224.3 252.9 286.1
Bank final No Objection to draft Bid (PreQ) Documents
24.6 77.7 178.3 199.8 231.8
Borrower issue of Bid (PreQ) Documents
59.7 170.6 190.4 223.3
Borrower Bid (PreQ) Opening date/ Minutes
118.4 144.9 178.0
Borrower Submission to Bank of Bid Evaluation Report
37.4 73.7
Bank No-Objection to Bid
Evaluation Report
48.2
Source:IEGanalysisofasampleofcontractdata
On average, it takes 286 days to sign a contract – but long tail of outliers
Variations in Elapsed Times
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Distribution of Days from Issue of Specific Procurement Notice to Contract signature
Distribution of elapsed times shows existence of extreme values for all procurement methods, especially high values for ICB and QCBS contracts
02
04
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0
Nu
mb
er
of
Co
ntr
acts
0 500 1000 1500 2000Number of Days
All Contracts
05
10
15
Nu
mb
er
of
Co
ntr
acts
0 500 1000 1500 2000Number of Days
QCBS
05
10
15
20
25
Nu
mb
er
of
Co
ntr
acts
0 500 1000 1500 2000Number of Days
NCB
01
02
03
0
Nu
mb
er
of
Co
ntr
acts
0 500 1000 1500 2000Number of Days
ICB
Source: IEG analysis of a sample of contract data
What explains Time Taken in the Procurement Process?
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Contract value emerges as important determinant of elapsed time
Contracts procured using NCB appear to take less time than ICB
Country capacity and governance matter
Diagnostic of delays requires better data availability, e.g. identification of resources used, number of iterations, complexity of contract, etc.
Fin
din
gs f
rom
Sta
tist
ical
An
alys
is
Determinants of Procurement Efficiency (cont’d)
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Processing Time Submission of Draft Bid Documents to Bank’s No-Objection to Final Bid Evaluation Report
Note: N=213; Specifications includes country and regional level controls. Robust standard errors in parentheses, *** p<0.01, ** p<0.05, * p<0.1 Source: IEG analysis of sample contract data
Generalizability to other Procurement Contexts
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Public Procurement deals with trade-off between Compliance and performance:
• Inefficiencies reduce Value for Money
• Need to measure and analyze procurement information
High level of variability in processing times due to country indicators or review process?
• Setting right incentives for use of existing flexibilities
• Contribute to better informed procurement strategies globally
Integrated data management as strategic tool to improve procurement performance:
• MDBs in unique position to collect contract data on transactions
THANK YOU
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