‘Large swathes’ of public procurement inefficient

Transparent and efficient public procurement is still a challenge in “large swathes of the world”, the World Bank has said.

In its third, and largest, report on the state of public procurement globally, the bank said procurement rules in many countries were still depriving firms the opportunity to bid for public sector contracts.

Bad procurement policies were blocking SMEs in particular, it added.

The report, Benchmarking Public Procurement 2017, said there were four key areas countries in all regions could improve: payment delays, e-procurement, bid deposits and performance guarantees, and handling complaints.

Late payments were identified as the main barrier to companies doing business with the public sector, and was a problem across all regions.

Timely payments were only made in one third of economies, with higher income countries tending pay quicker than their lower income counterparts. Most high income economies saw payments made within 30 days.

Bangladesh, the Ivory Coast and Qatar were among the worse countries for payment delays, leaving suppliers waiting for between 91 and 180 days.

The report also said there was a large gap between countries that used sophisticated public e-procurement systems – bringing benefits of transparency and efficiency – and countries that didn’t have any dedicated online procurement portal.

Out of the 180 countries included in the report, 27 did not have any dedicated public e-procurement system. “The lack of such a portal means that suppliers may not have access to procurement opportunities and associated information… [giving] some parties an unfair advantage,” the report said.

The amount of information available on tenders also varied between countries, even within regions. In Latin America and the Caribbean, for example, three out of the 30 economies did not publish any procurement-related information, while 13 made all information available.

Globally, only 74 countries published procurement plans online, a practice particularly helpful for SMEs. Eastern Europe and Central Asia scored highest for this indicator, and Georgia was singled out for being one of the few countries to have completely eliminated paper based tendering. It now conducts 100% of public procurements through its e-procurement system.

The bank estimates the global market for public procurement to be worth $9.5tn annually, with public procurement making up a larger share of economies in low-income countries.

“Governments in developing countries are significant purchasers of goods and services, and these markets represent huge opportunities to enhance competition and development,” the report said.

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