Fighting corruption in the public sector

Integrity in Public Procurement

 


Introduction | OECD Principles | Toolbox | Reviews | Analysis | Contact Us 


 

Why public procurement matters for governments?

 

Public procurement is a key policy instrument. In ordinary times it accounts for 16% of GDP, on average, in OECD member countries. It is a versatile mechanism that can also be used to pursue additional policy aims such as environment, innovation or social goals.


However, public procurement is the government activity most vulnerable to waste, fraud and corruption due to its complexity, the size of the financial flows it generates and the close interaction between the public and the private sectors.

 

 Average perceived level of bribery risk in selected 
government activities in OECD countries (2006)

 

 Download Corresponding Excel File


Integrity in procurement has received particular attention in the current crisis: billions of dollars in stimulus funds and accelerated procurement procedures raise additional risks. A strong and clean recovery needs to proactively promote a level playing field and fair competition in contracting by public sector organisations.

 

      General government and state-owned utilities procurement in
selected OECD countries as a percentage of GDP (2008)

                                        Download Corresponding Excel File

 

 How does the OECD help countries enhance integrity in public procurement?

 

The OECD supports governments in reforming their public procurement systems to ensure long-term sustainable and inclusive growth.  An efficient and effective public procurement system is the backbone of a well-functioning government.  Public procurement contributes to promoting a level playing field for the private sector and delivering effective services to the public.

 

The OECD approach aims to enhance integrity in public procurement by mapping risks throughout the entire procurement cycle. It takes a holistic view of the public procurement cycle: from needs assessment, bid evaluation and contract award, as well as contract management and payment.

 

The OECD has developed a set of Principles for Enhancing Integrity in Public Procurement. The Principles were approved as a Recommendation by the highest body of the OECD, the Council, in October 2008. OECD Recommendations reflect a consensus by member countries as good practice.

 

The OECD supports and measures progress the implementation of the Principles through a Toolbox of existing public procurement tools used in member and non-member countries, Public Procurement Reviews and analyses of public procurement.

Public procurement brochure cover

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 For an overview of OECD activities on procurement read the brochure: "Public Procurement for Sustainable and Inclusive Growth".

 

OECD Principles for Enhancing Integrity in Public Procurement

 

The OECD Principles for Enhancing Integrity in Public Procurement provide guidance to policy makers to enhance integrity in public procurement. They are anchored around 4 pillars:

  • Transparency
  • Good management
  • Prevention of misconduct, compliance and monitoring
  • Accountability and control.

The Principles support the implementation of international legal instruments developed within the framework of the OECD, as well as other organisations such as the United Nations, the World Trade Organisation and the European Union.

    

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In 2011, all OECD member countries will report back to the Council on progress made in implementing the Principles. It will include the use of public procurement to achieve secondary policy aims (e.g. environment, social and innovation).

 

For more information also see:

 

Enhancing Integrity in Public Procurement: A Toolbox 

 

To help countries implement the Principles for Integrity in Public Procurement, the OECD has developed a compilation of existing tools used in member and non-member countries. These aim to support public officials in designing and developing guidance and procedures at various points in the procurement cycle.

 

It also includes tools to ensure integrity in accelerated procurement procedures, a key concern related to the implementation of the current fiscal stimulus programmes.

 

The Toolbox has undergoing a consultation process with a broad group of key stakeholders from both OECD member and non-member countries. They include the national and sub-national governments, the business community, trade unions and civil society organisations. The Toolbox can be accessed at www.oecd.org/governance/procurement/toolbox.

 

The Toolbox will be regularly updated. Readers are invited to send tools which have proven to be effective in their organisations to the OECD integrity unit at gov.integrity@oecd.org.

 

Other related documents:

 

OECD Public Procurement Reviews 

 

Public Procurement Reviews conducted by the OECD Secretariat help policy makers improve policies, adopt good practices and implement established principles and standards. It entails a comparison with practices and lessons learned in OECD and non-OECD member countries.

The main output of a Review is a report that strategically analyses a country’s public procurement system and that details alternative options and trade-offs to address different 'at risk' areas.

 

The benefits of an OECD Public Procurement Review are:

  • Strategic analysis of national systems, policies and practices
  • International benchmarking, country policies and practices
  • Policy dialogue as a basis for learning and reform
  • Proposals for action to improve policies and practices


Recent and forthcoming publications which present the findings of OECD Public Procurement Reviews include:

 

OECD Analysis on Public Procurement

 

The OECD produces analysis on public procurement and publishes thematic studies, comparative analysis and reports. Recent examples include:

 

Public Procurement Training for IPA Beneficiaries (Sigma, 2010). (PDF 14.5 MB) Sigma has completed the preparation of a comprehensive Public Procurement Training Manual which is now being used as the basis for large-scale training of public procurement practitioners in beneficiaries of the EU’s Instrument for Pre-Accession Assistance (IPA).

Centralised Purchasing Systems in the EU (Sigma, 2011). (PDF 1.35). This study provides a comparative analysis of existing centralised purchasing institutions in selected EU Member States in terms of organisation, coverage, objectives and rationale, financing models, types of framework agreements and call-off systems, as well as the information technology used, and it examines success factors, risks and future challenges.

Promoting the Use of Performance-Based Contacts between Water Utilities and Municipalities in Eastern Europe Caucasus and Central Asia (2009) provides five case studies of performance based contracts in the water sector (two in Armenia, one in Kazakhstan and two in Ukraine).

Public-Private Partnerships: In Pursuit of Risk Sharing and Value for Money (2008) identifies possible good practices for the public sector to maximise the potential of partnerships and to ensure that they are used appropriately to maximum the public interest.

Public procurement: The role of competition authorities in promoting competition (2007) comprises proceedings in the original languages of a Roundtable discussion on Public Procurement. The Role of Competition Authorities in Promoting Competition, held by the Competition Committee in June 2007.

OECD/SIGMA Public Procurement Review and Remedies Systems in the European Union (2007) provides a comparative analysis of the review and remedies systems of 24 European Union member states. It does not attempt to evaluate their respective advantages or disadvantages or to recommend particular institutional arrangements.

Fighting Corruption and Promoting Integrity in Public Procurement (2005) captures the main points of the Global Forum: Fighting Corruption and Promoting Integrity in Public Procurement held in Paris in November 2004. It includes case studies from Europe, Asia and Latin America.

The Environmental Performance of Public Procurement: Issues of Policy Coherence (2003) contains background reports on the assessment of greener public purchasing programmes, as well as their links with public expenditure management.

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Contact Us

For more information about the OECD Principles for Enhancing Integrity in Public Procurement, the OECD Toolbox and OECD Public Procurement Reviews please contact the OECD Integrity Unit at gov.integrity@oecd.org.

 

Permanent URL: www.oecd.org/gov/ethics/procurement

 

Related Documents

 

OECD Review of Public Procurement of the Mexican Institute of Social Security

 

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