What makes a good and sustainable procurement system

The control room of the train station in Mazar-e Sharif, where the Asian Development Bank funded a 76-kilometer railway from Uzbekistan to the Afghan city. A reliable procurement process ensures the timely delivery of services to stakeholders. Photo by: ADB / CC BY-NC-ND

One of the most important phases in the implementation of public works and development programs is procurement — or the acquisition of good and services to deliver project objectives and results.

International development institutions, private organizations, national governments and corporations need a reliable procurement process to ensure timely delivery of services to their stakeholders. Disaster victims, for instance, could starve or die from diseases if the procurement of food and medicine is delayed or not done right. The quality of education, meanwhile, may not improve if school supplies, books and teaching materials are not delivered in rural areas.

But how can you make procurement better and more sustainable?

While there isn’t one strategy that can apply to all contexts, Steve Schooner, co-director of George Washington University’s government procurement law program, explained that a sustainable procurement system will only be possible if the legal and institutional environment allows for it.

“Anybody can come up with a very good procurement legislation, but it’s another if we can apply it and implement it well with transparency, integrity, accountability, efficiency and effectiveness,” the professor said in a procurement conference attended by Devex, adding that governments — as the main proponents of public procurement — should always engage the private sector and other stakeholders in the process.

Eveline Venanzoni, head of the ecological procurement service of the Swiss Federal Office for the Environment, agreed, saying that sustainable procurement systems take into account the environmental, social and economic effects of the process.

She explained that modern procurement systems should integrate objectives into larger development goals and aspirations — a move away from the detached view that procurement had been put under over the past couple of decades, as an industry of winning contracts and delivering them.

Some governments, such as that of the Philippines, and even multilateral institutions like the World Bank and the Asian Development Bank have recognized the benefits of aligning procurement processes with national and international interests. Doing so, according to Venanzoni, is “good for the whole procurement process” as it cuts costs and improves efficiencies.

Process should be clear and stable

The whole procurement process should also be clear and stable, with each stakeholder fully aware of their specific roles and the general objectives of the project — everyone is a vital piece of a huge puzzle.

Felipe Estefan, an open government strategist at the World Bank, shared that in the whole procurement process, “everyone should be aware of the goals, objectives and their responsibilities so people and other stakeholders are aware of what’s happening and what is expected. This helps in managing expectations.”

The World Bank official added that being engaged and fully aware of the process, objectives and expected outcomes of the whole project also empowers stakeholders and beneficiaries to hold contractors and funders accountable if a certain key result is not achieved or a certain good or service is not delivered — making the whole process sustainable and more effective.

Procurement should also be more outcome-oriented with a view of delivering quality results, instead of just being process-oriented. Schooner shared that “having goals is better in making procurement outcome-oriented” because it is a “double-edged sword” that always targets policy goals and value for money.

By focusing just on the process, Jose Tomas Syquia, executive director for procurement at the Philippine budget department, shared that the whole system runs the risk of becoming a checklist where stakeholders just do what is written without any “discretion.”

“Procurement is not just about having a checklist and crossing them out. There should be discretion to be able to exercise judgment,” the Philippine official said. “If there’s nothing like that, there’s no growth or no room for improvement. Crossing out everything in the checklist does not necessarily suggest and ensure success, effectiveness and efficiency.”

Having a standard is important

The implementation of standards as a way to make procurement sustainable is also key. Schooner shared that the maturity of a procurement process is the presence of standards or benchmarks where all stakeholders are required to follow.

“Think about your procurement regime and think inwardly and ask if there are things that need to be improved,” he said.

The GWU professor added that stakeholders should also be aware that awarding of the contract is not the end of the procurement process. It is rather the “first contact of business” because it is “not an assurance that you will get results every single time.”

Monitoring and evaluation of goods and services delivered from the start of the contract to the delivery of the last ones should be done to ensure that beneficiaries are getting what they deserve and expect.

These standards should be streamlined — or even centralized — in all procurement services and programs as it allows for “buying in volume, competitive pricing and coherent implementation,” among others, Venanzoni shared. “Make things measurable and set up a standard so you can assess progress and improvement easily.”

“Countries tend to measure what’s easy to measure and not what’s important,” Schooner concluded. “We shouldn’t just train [stakeholders], but we should empower them.”

What else do you think can make procurement systems more effective and sustainable? Let us know your thoughts by leaving a comment below.

Read more international development news online, and subscribe to The Development Newswire to receive the latest from the world’s leading donors and decision-makers — emailed to you FREE every business day.

You have 2 free articles left
Log in or sign-up to unlock all of the free news on Devex.

About the author

  • Lean 2

    Lean Alfred Santos

    Lean Alfred Santos is a Devex development reporter focusing on the development community in Asia-Pacific, including major players such as the Asian Development Bank and the Asian Infrastructure Investment Bank. Prior to joining Devex, he covered Philippine and international business and economic news, sports and politics. Lean is based in Manila.