Chapter 4 analyses the current state of play of public procurement professionalisation initiatives in Estonia. The chapter presents various elements of professionalisation including the professionalisation strategy and action plan, competency model, capacity-building system, certification framework, incentive mechanisms and collaborative approach with knowledge centres. The chapter also describes the result of the self-assessment survey carried out by the OECD to assess the capability level of the public procurement workforce based on the developed competency model.
Strategic Public Procurement and Professionalisation Initiatives in Estonia
Diagnostic Report
Abstract
Public procurement is increasingly recognised as a strategic instrument for achieving government policy goals aligned with the 2030 Agenda for Sustainable Development (SDGs), including promoting a circular and green economy, stimulating innovation, supporting small and medium-sized enterprises (SMEs), and promoting ethical behaviour and responsible business conduct. (OECD, 2023[1]) Recognising the relevance of public procurement as a strategic tool, the Government of Estonia adopted the Public Procurement Strategic Principles in November 2023. (Government of the Republic of Estonia, 2023[2]) These dynamic global trends, however, make public procurement a more complex function than ever, requiring a more complex skillset for public procurement officials that implement public procurement procedures.
The capacity of the public procurement workforce is a crucial element of a sound procurement system that delivers efficiency and value for money in the use of public funds. (OECD, 2023[1]) Indeed, the OECD Recommendation has a principle dedicated to the capacity of the public procurement workforce. It calls upon countries to develop a procurement workforce with the capacity to continually deliver value for money efficiently and effectively. (OECD, 2015[3]) (See Box 4.1)
IX. [The Council] recommends countries to develop a procurement workforce with the capacity to continually deliver value for money efficiently and effectively.
Ensure that procurement officials meet high professional standards for knowledge, practical implementation and integrity by providing a dedicated and regularly updated set of tools, for example, sufficient staff in terms of numbers and skills, recognition of public procurement as a specific profession, certification and regular trainings, integrity standards for public procurement officials and the existence of a unit or team analysing public procurement information and monitoring the performance of the public procurement system.
Provide attractive, competitive and merit-based career options for procurement officials, through the provision of clear means of advancement, protection from political interference in the procurement process and the promotion of national and international good practices in career development to enhance the performance of the procurement workforce.
Promote collaborative approaches with knowledge centres such as universities, think tanks or policy centres to improve skills and competences of the procurement workforce. The expertise and pedagogical experience of knowledge centres should be enlisted as a valuable means of expanding.
Source: (OECD, 2015[3])
Estonia has been taking initiatives to professionalise the public procurement workforce to achieve goals to promote the uptake of strategic use of public procurement as defined in the Public Procurement Strategic Principles. The result of the self-assessment survey of the public procurement practitioners in Estonia carried out by the OECD in 2023 shows that the lack of adequate capability was identified as the biggest challenge to promote innovation procurement (76%) and socially responsible public procurement (69%) and the second biggest challenge for green public procurement (60%). Therefore, professionalising the public procurement workforce including the development of the capacity-building mechanism could be one of the top priority areas of public procurement reforms for Estonia.
This Chapter overviews the current state of play of professionalisation in Estonia in accordance with the analytical framework of professionalisation through the three steps proposed in the OECD policy paper on professionalising the public procurement workforce. It also describes the initiatives taken by Estonia in collaboration with the OECD under the financial support of the European Commission through the Technical Support Instrument (TSI).
Source: (OECD, 2023[1])
This analytical report directly contributes to Step 1: Assessment, which consists of the two assessment angles: (i) the system of professionalisation and (ii) the capability level of the public procurement workforce. In other words, it analyses the current state of play (system) of professionalisation in Estonia. In addition, the assessment of the capability level of the public procurement workforce was also carried out under this TSI project. (See Section 4.3)
The first section of this Chapter (Section 4.1) discusses Step 2: Development of a strategy by overviewing strategies related to the professionalisation of the public procurement workforce in Estonia. Then, the Section 4.2 describes the competency model developed in Estonia. Section 4.3 analyses the result of the self-assessment survey carried out by the OECD to assess the capability level of the public procurement workforce based on the developed competency model. The rest of this Chapter will analyses Step 3 Implementation of a strategy to review specific initiatives of professionalisation: capability-building system (Section 4.4), certification framework (Section 4.5), incentive mechanisms (Section 4.6) and collaborative approach with knowledge centres (Section 4.7)
It is essential to develop a professionalisation strategy and/or action plan to define activities and their targets within a specific timeline. Currently, Estonia does not have a stand-alone policy to professionalise the public procurement workforce. However, strategies such as Public Procurement Strategic Principles and Public Governance Strategy (2024-2027) recognise the relevance of professionalising the public procurement workforce and specify some activities in the action plan.
The Public Governance Strategy (2024-2027), which was led by the Ministry of Finance to contribute to the national development strategy Estonia 2035, recognises public procurement as one of the most relevant public governance topics in Estonia. The Public Governance Strategy mentions the challenges to build up a systematic capacity to enhance the competences of the public procurement workforce as well as to develop a centre of excellence for public procurement, to ensure the transparent and effective public procurement and promote the strategic use of public procurement (green, social and innovation) as well as the Best Price Quality Ratio (BPQR). (Ministry of Finance of the Republic of Estonia, 2024[4])
The Action Plan for Public Procurement Strategic Principles also set up activities related to the professionalisation of the public procurement workforce from the viewpoint of promoting the strategic use of public procurement. These initiatives include capacity-building activities (training, manual, pilot projects) to promote the use of GPP, SRPP, innovation procurement and the BPQR, the development of the competency model, the establishment of a centre of excellence, the establishment of excellence award system for innovation procurement and innovative contracting authorities.
However, the Public Procurement Strategic Principles focus on the capability-building of strategic procurement with some other elements of professionalisation such as a competency model and the excellence award. Estonia could benefit from considering the possibility of developing a stand-alone professionalisation strategy in the long run, if Estonia aims at widening more initiatives of professionalisation such as certification framework, incentive mechanisms and collaboration with the knowledge centre.
A competency model maps critical skills and their capability levels which are required for the overall strategic direction of an organization. It allows procurement officials to identify their skill gaps and can be used for human resource management purposes: recruitment, promotion and training on the skills and competences. (OECD, 2023[1]) As of 2020, 41% of OECD countries had introduced a competency model for the public procurement workforce, compared to 30% in 2018. (OECD, 2021[6])
Currently, Estonia does not have a national competency model for the public procurement workforce but decided to develop it with the financial support from the European Commission under the Technical Support Instrument (TSI). This section describes the competency model developed in collaboration with the OECD.
4.2.1. Steps to develop a competency model
The competency model was developed in collaboration with the Ministry of Finance and the OECD through the five steps described in Figure 4.2.
Source: Prepared by the author
A draft competency model was prepared under Step I and Step II. In Step III, the survey was prepared to evaluate the current capability level of the public procurement workforce based on the draft competency model. The survey also requested for any feedback and suggestions on the draft competency model. In Step IV, the result of the self-assessment as well as the feedback on the draft competency model were analysed to finalise a competency model. The rest of this Section will describe Step I and Step II taken to develop a draft competency model.
4.2.2. Step I: Definition of competences / Step II: Description of each competence
The development process of a competency model started with Step I, which identified competences which should be included in the future competency model of Estonia. Then, in Step II, the detailed information on each competence was prepared, namely, (i) what each competence is about, and (ii) proficiency description for each of four levels (Basic, Intermediate, Advanced and Expert). To draft a competency model for Estonia, the Ministry of Finance and the OECD reviewed the 30 competences defined in the ProcurCompEU competency matrix and adapted them to the context of Estonia.
Source: Prepared by the author
ProcurCompEU is the European competency framework for public procurement professionals, which was launched by the European Commission in December 2020 as a tool to support the professionalisation of public procurement. (see Box 4.2)
ProcurCompEU is a tool designed by the European Commission to support the professionalisation of public procurement. ProcurCompEU consists of three elements:
Competency Matrix, which defines 30 procurement-related and soft competences along four proficiency levels;
Self-Assessment Tool that allows users to set targets for the different competences and assess their proficiency levels against them and identify any gaps;
Generic training curriculum which lists all learning outcomes that public procurement professionals should know and be able to demonstrate after having attended a training for a certain proficiency level.
The Competency Matrix describes 30 competences (knowledge, skills and attitudes) that public procurement professionals should demonstrate in order to perform their job effectively and efficiently and carry out public procurement procedures that bring value for money. The competences are grouped in two main categories: procurement specific competences, and soft competences. The categories are then divided into six clusters, three per category:
Procurement-specific competences (19 competences):
Horizontal: 9 competences applicable to all stages of the public procurement lifecycle
Pre-award: 6 competences required to perform all the tasks and activities taking place before the award of a public contract
Post-award: 4 competences necessary for the contract management after the award of a public contract.
Soft competences (11 competences):
Personal: 4 competences on behaviours, skills and attributes that public procurement professionals should possess, as well as the mind-set that they should display according to their job profile
People: 3 competences enabling public procurement professionals to interact and cooperate with other professionals, and to do so in the most professional manner
Performance: 4 competences public procurement professionals need to have in order to increase value for money in public procurement procedures
Each competence is described along four proficiency levels based on the breadth of knowledge and skills: Basic, Intermediate, Advanced, and Expert.
The ProcurCompEU Self-Assessment Tool is composed of several key elements:
A self-assessment questionnaire
Templates for job profiles
A calculation tool for computing individual and organisational assessment results.
The ProcurCompEU Reference Training Curriculum lists all learning outcomes that public procurement professionals should know and be able to demonstrate after having attended a training for a certain proficiency level.
ProcurCompEU is a quite flexible, voluntary and customisable tool. Getting value from ProcurCompEU does not require using each and every component of the framework, nor does it require the use of each and every competence defined in the ProcurCompEU Competency Matrix.
Source: (European Commission, 2020[7]))
During Step I, the OECD and the Ministry of Finance reviewed each of 30 competences (19 procurement-specific competences and 11 soft competences) defined in the ProcurCompEU competency matrix to determine the relevance of each competence within the context of Estonia. Some of these 30 competences were merged to create one competence. For example, two ProcurCompEU competences C9 (Negotiations) and C22 (Communication) were merged to create one competence on negotiations and communication in the Estonian framework (Competence C17 - Negotiations and Communication). Some ProcurCompEU competences were divided into more competences. For example, ProcurCompEU competence C5 (Sustainable procurement) was divided into C4-1 (Sustainable procurement – Green public procurement) and C4-2 (Sustainable procurement – Socially responsible public procurement) to make these two dimensions of sustainable procurement more visible in the Estonian competency model. ProcurCompEU competence C13 (Technical specifications) was divided and rephrased into C12-1 (Tender document – Technical specifications) and C12-2 (Tender document – Evaluation criteria), as ProcurCompEU competence C13 (Technical specifications) included these two similar but different concepts. As a result, 21 competences (23 including sub-competences) were identified in the draft competency model of Estonia, 14 of which were procurement specific competences and 7 were soft competences. Table 4.2 shows how the original 30 ProcurCompEU competences were adopted into the 21 competences identified in the draft competency model of Estonia.
Source: Prepared by the author
Source: Prepared by the author
During Step II, the competence descriptions and proficiency descriptions of the ProcurCompEU competences were also used as referential starting point, but these elements were adjusted to the Estonian context by refining (adding to / deleting) the competence descriptions and proficiency descriptions for each of four levels (Basic, Intermediate, Advanced, Expert).
The draft competency model was prepared through these Step I and II. The next section describes the analysis of the result of self-assessment survey which corresponds to the Step III and Step IV. It is worth mentioning that the draft competency model developed in Step I and II was adopted as the final version of the competency model in Step V, as there was no feedback which would have required any update and modifications of the competency model during Step III and IV.
4.2.3. Potential job profiles
To reap the full benefits of the competency model, Estonia could benefit from specifying typical job profiles related to public procurement and matching it with the required proficiency levels of each competence in the competency model, if relevant. In the self-assessment survey answered by 143 public procurement officials in Estonia (May 2024), 95% of the participants self-declared one of the most plausible job profiles prepared for the purpose of the survey, which might match best their current positions as the following: Procurement specialist (55%), Department / Division manager (20%), Legal adviser (10%), category specialist (6%), and Procurement support officer (4%). Only 5% of the participants selected Others and described their job profiles such as project expert / specialist, project lawyer, procurement manager (i.e. both procurement coordination, legal advice, procurement and contract management), and adviser to the department. (See the next section 4.3 for more details on the result of the self-assessment survey). However, most of these described positions could correspond to one of the prepared options in broader sense. Therefore, the job profiles prepared for the purpose of the self-assessment survey could be applicable to cover broadly the job profiles under the overall context of Estonia, although more detailed job profiles might exist at each contracting authority level. Some EU member states such as Slovenia and Croatia developed a competency model for the public procurement workforce by adjusting the competency model of ProcurCompEU and developed specific job profiles adjusted to the local context. (See Box 4.3)
Slovenia
The Directorate for Public Procurement within the Ministry of Public Administration of the Republic of Slovenia developed a competency model for the public procurement workforce in Slovenia by adjusting the competency matrix of ProcurCompEU (the European public procurement competency framework) to the context of Slovenia. This framework includes the three-level competency model for the six job profiles: (i) procurement support officer, (ii) stand-alone public buyer for smaller value contracts, (iii) stand-alone public buyer for higher value contracts, (iv) category specialist, (v) contract manager, and (vi) department manager.
Croatia
In 2023, the government of Croatia adapted ProcurCompEU to the context of Croatia. The Manual for evaluating and developing competences in the field of public procurement includes the competency matrix which adopted the same 30 competences with four proficiency levels of the ProcurCompEU competency matrix into the context of Croatia. It also lists seven job profiles: (i) procurement support officer / procurement officials for simple procurement procedures, (ii) procurement officials engaged in all the procurement phases, (iii) procurement officials engaged in the part of the procurement phases, (iv) category specialist, (v) contract management specialist, (vi) manager, and (vii) control officers. The proficiency descriptions for control officers were developed for each competence.
This section presents the key takeaways and results of the self-assessment survey, which was prepared based on the 21 competences of the draft competency model and applied to 143 procurement officials from 37 contracting authorities in Estonia in 2024. It is worth noting that these 37 contracting authorities represented 38.17 % of the total number of public procurement procedures and 67.38 % of the total estimated procurement volume in Estonia in 2023. (See Annex B for more detailed result of the survey)
The survey aimed at feeding the assessment of the capability level of the public procurement workforce, one assessment angle of the current level of professionalisation, which was specified in the Step I Assessment of the OECD policy paper on the professionalisation. (OECD, 2023[1]) The participants were requested to self-assess their proficiency levels of knowledge and skills for 21 competences (23 including sub-competences) from the following levels that were converted to points (0 to 4): (i) Less than basic: 0 point, (ii) Basic: 1 point, (iii) Intermediary: 2 points, (iv) Advanced: 3 points, and (v) Expert: 4 point.
4.3.1. Self-assessment result of 21 competences
The total average point of the 23 competences of all the 143 participants was 2.06 point within the range from 0 point to 4 point. The total average point of procurement-specific competences (No. 1-14) amounted to 2.27 point, while the one for the soft competences (No. 15-21) was 2.13 point.
The following Figure 4.5 shows the average points of all the 143 participants by competence in ascending order. The self-assessment result identified C5 (Innovation Procurement) as the weakest competence of the 143 participants with the lowest average point of 1.02, followed by C4-2 (Socially responsible public procurement), C6 (Risk management), C4-1 (Green public procurement), C10 (Market analysis & engagement).
Note: C1 Planning, C2 Legislation, C3 e-Procurement and other digital tools, C4-1 Sustainable public procurement - Green public procurement, C4-2 Sustainable public procurement - Socially responsible public procurement, C5 Innovation procurement, C6 Risk management, C7 Conflict resolution, C8 Category specific, C9 Needs assessment, C10 Market analysis & engagement, C11 Procurement strategy, C12-1 Tender document - Technical specifications, C12-2 Tender document - Evaluation criteria and other elements, C13 Tender evaluation, C14 Contract management, C15 Adaptability and modernization, C16 Analytical and critical thinking, C17 Negotiations & Communication, C18 Organisational awareness & Compliance, C19 Collaboration & Stakeholder relationship management, C20 Team management and leadership, C21 Project management
Source: Self-assessment survey result for 143 public procurement officials at 37 contracting authorities in Estonia (May 2024)
4.3.2. Training needs of 21 competences
In addition to the self-assessment exercise, all the participants were requested to select three competences of his or her top three choices that require more methodological assistance (such as training, guidelines, manuals etc).
The result on training needs is aligned with the self-assessment result. C5 (Innovation procurement) is selected most as the first priority competence that requires more methodological assistance, followed by C2 (Legislation), C4-1 (Green public procurement), C4-2 (Socially responsible public procurement). However, it should be noted that C2 (Legislation) gained stronger training needs (2nd followed by innovation procurement) compared with the self-assessment result (20th) with 2.52 average points. However, the discussion with some survey participants during the conference held in Tallin on14 June 2024 showed that this was attributable to the need for training on the regular update and amendments of legislation.
The similar result was observed, when 1st to 3rd choices were taken into account. C5 (Innovation procurement) is selected most as the 1st-3rd priority competence that requires more methodological assistance, followed by C2 (Legislation), C4-2 (Socially responsible public procurement), C4-1 (Green public procurement), C10 (Market analysis & engagement).
These results of the training needs survey imply that participants need more training and skills in using public procurement as a strategic tool to pursue different policy objectives such as innovation, social dimension, and environment.
Table 4.3 lists the five competences based on the self-assessment and the training needs.
Source: Self-assessment survey result for 143 public procurement officials at 37 contracting authorities in Estonia (May 2024)
In accordance with the self-assessment survey, Estonia could benefit from designing tailored trainings for the identified top-priority competences. The next section will discuss the current capability-building system of the public procurement workforce in Estonia, by mapping the availability of the capability-building system for the 21 competences.
This section overviews the capacity-building system to reinforce the capability of the public procurement workforce in Estonia such as the provision of training courses and methodological assistance.
4.4.1. Training
Reinforcing the capability of the public procurement workforce requires an adequate training system. Table 4.4 mapped the availability of training and materials such as manuals for each of 21 competences defined in the draft competency model.
Note: (*) Training needs are based on the aggregated result of 1st to 3rd priorities
Source: Prepared by the author based on the information provided by the Ministry of Finance of Estonia, (Ministry of Finance of the Republic of Estonia, n.d.[10]) and (State Shared Services Centre of the Republic of Estonia, n.d.[11])
Table 4.5 shows the training providers and some remarks on the training of each competence.
Note: (*) RTK refers to State Shared Services Centre, Others are universities and/or private sector in most cases
Source: Prepared by the author based on the information provided by the Ministry of Finance of Estonia, (Ministry of Finance of the Republic of Estonia, n.d.[10]) and (State Shared Services Centre of the Republic of Estonia, n.d.[11])
In general, many trainings are provided by the Ministry of Finance and the State Shared Services Centre (RTK) through in-person and/or online format. Recorded videos are available in most cases. Some trainings on public procurement are available at universities (e.g. Tartu University) and the private sector (Chamber of Commerce and Industry, private companies). The followings are some remarks on training:
Training is not available for competences such as C8 (Category specific), C9 (Needs assessment) and C10 (Market analysis & engagement). In particular, C9 and C10 will be relevant to all public procurement officials;
C4-1 (green public procurement) is provided with the strong initiative of the Ministry of Climate, and the main focus is the mandatory green criteria defined in the Regulation No. 35. However, introductory training to GPP as well as advanced topics such as LCC are still missing;
Training on C4- 2 (Socially responsible public procurement) was organised with the initiative of the Ministry of Finance in June 2024 Better Access to Socially Responsible Public Procurement through the EU-funded initiative and recorded video and training materials are available;
A comprehensive training on C5 (Innovation procurement) is not developed yet. State Office's Innovation Programme is an eight-month program for the development of public services based on design thinking. The program consists of 12 training days, in-depth field work, dozens of discussions and testing of solutions, but it does not focus on procurement aspect. Estonian Chamber of Commerce and Industry organised a 3-hour innovation procurement training which touched upon market dialogue and a procurement procedure (competitive dialogue);
C11 (Procurement strategy) focuses on centralised procurement (framework agreement and dynamic purchasing system), but does not cover other elements;
The Ministry of Finance provided training Value-based public procurement - how to draw up qualitative evaluation criteria and uploaded the recorded video, which is directly related to C12-2 (Evaluation criteria and other elements) and to some extent to C12-1 (Technical specifications) and C13 (Tender evaluation);
C14 (Contract management) focuses on the modification or breach of contracts, and do not cover other elements of contract management;
C6 (Risk management), C7 (Conflict resolution) and soft skill competences (No. 15 – 21) are covered by the Top leaders training program by the State Office. However, these are not customised to the context of public procurement, and it is not sure whether or not this training is widely available to public procurement officers; and
The Ministry of Justice uploaded a video course of corruption and conflict of interest, which is related to C6 (Risk management). However, this implies a focus on integrity risk, and does not consider other risks in public procurement.
4.4.2. Methodological assistance
Methodological assistance constitutes a key pillar to strengthen the capacity-building systems of the public procurement workforce. It is a useful tool to support public procurement officials to undertake their daily tasks effectively, and complements training courses. (OECD, 2023[1]) This part overview the methodological assistance system available in Estonia such as manuals, standardised templates, and help desks.
Manual
Manuals provide practical information on specific procedures and topics. Table 4.6 shows some key manuals which are related to some competences.
Source: Prepared by the author based on the information provided by the Ministry of Finance of Estonia, (Ministry of Finance of the Republic of Estonia, n.d.[10]) and (State Shared Services Centre of the Republic of Estonia, n.d.[11])
Like the case of training, C9 (Needs assessment) and C10 (Market analysis & engagement) lacks the manual;
Like the case of training, C14 (Contract management) focuses on the modification of contracts, and do not cover other elements of contract management;
C4-1 (green public procurement) is provided with the strong initiative of the Ministry of Climate, and main focus is the mandatory green criteria defined in the Regulation No. 35;
Training materials of 2024 Better Access to Socially Responsible Public Procurement for C4-2 (Socially responsible public procurement) are available. However, feedback from the participants of the self-assessment showed the strong appetite for actual case studies and criteria examples;
Estonian Business and Innovation Agency published the second version of Innovation Procurement Handbook in 2024. This updated manual is web-based and reader-friendly. However, feedback from the participants of the self-assessment showed the strong needs for the actual cases of innovation procurement by each procurement procedure / method.
Estonia could consider developing trainings for topics, which are currently not available or need more updates. In addition, when publishing the competency model, a portal or document should be set up so that people can see all the available training and materials for each competence. (or study guide for each competence for professional development).
Standardised Templates
Standardised templates are ready-to-use forms that contracting authorities can use to facilitate their work. They help contracting authorities save time and avoid errors. They also contribute to assuring the quality of procurement procedures and decrease the administrative burdens of economic operators who prepare bid proposals. (OECD, 2023[1])
In Estonia, some standardised templates are available such as the European Single Procurement Document (ESPD) and tender conditions such as compliance and contract award criteria. As one of the EU member states, Estonia implemented the European Single Procurement Document (ESPD), which is named as the Procurement Passport in Estonia. ESPD is a self-declaration form on the eligibility of economic operators to participate in public procurement procedures such as the information related to the undertaking and grounds for exclusion. Under ESPD, only the winner of the tender needs to provide the actual documents to prove its eligibility. In addition, PDF documents are automatically generated for some tender conditions such as compliance criteria and contract award criteria when the information is placed by procurement officials in the e-procurement.
In addition, as an unique initiative from the private sector, Estonian Information Technology and Telecommunication Union, an association of ICT sector companies in Estonia, developed standard contract templates (general conditions and special conditions) for ICT development contracts. (Estonian Information Technology and Telecommunication Union, 2023[12])
Helpdesk
A help desk is a contact point centre to assist contracting authorities and/or economic operators in clarifying their inquiries related to their daily tasks of public procurement. It is an efficient tool to provide quick and tailor-made information. This function is essential because public procurement regulations are complex and can be modified frequently. A help desk can contribute to ensuring legal compliance and solving recurrent issues of daily procurement tasks, such as the choice of procedure and award criteria. (European Commission, n.d.[13])
Currently, three help desks are available in Estonia to answer to questions from both contracting authorities and economic operators. Help desk operated by the Ministry of Finance answers to questions related to legal framework and any questions related to public procurement. Each year, the Ministry of Finance receives approximately 600 questions. Help desk on green public procurement operated by the Ministry of Climate covers questions on green public procurement. Help desk on the e-procurement (Public Procurement Register) operated by the State Shared Service Centre answers to questions (approximately 7 000 per year) on how to use e-procurement system.
Source: Created by the author based on (Ministry of Finance of the Republic of Estonia, n.d.[14]) and the information provided by the Ministry of Finance
In addition, the Ministry of Finance has the section on frequently asked questions (FAQ) within its website. The FAQ section covers 27 different topics of public procurement, to name a few, tender conditions, procurement procedure, procurement passport (European Single Procurement Document: ESPD), centralised purchasing (framework agreements, dynamic purchasing system), simple procurement and remedy mechanism. (Ministry of Finance of the Republic of Estonia, n.d.[15])
Direct support and advice to the implementation of the actual procurement procedure
Recently, there have been initiatives of more direct support and advice on implementing the actual complex procurement procedure. (OECD, 2023[1])
In Estonia, the Action Plan of Public Procurement Strategic Principles mentions the future plan to set up a competence centre within the State Shared Service Centre, a national central purchasing body, to provide advice and support for strategic procurement such as innovation procurement. Under this scenario, the case of technical support provided by the Austrian competence centre of innovation procurement provides insights, as the Austrian competence is also established within a Federal Procurement Agency of Austria (BBG). In Austria, officials of a competence centre of innovation procurement assist contracting authorities in identifying and describing the needs during the preparation phase of innovation procurement. When contracting authorities decide to launch innovation procurement procedure, BBG, a federal CPB in Austria, is available to help them carry out innovation procurement procedure. (See Box 4.4)
In Austria, the PPPI (innovation-promoting public procurement:) Service Centre, or a national competence centre of innovation procurement, was established within the Federal Procurement Agency (BBG) in 2013. Financed by the Ministry of Digital and Economic Affairs (BMDW) and the Ministry of Climate Action, Environment, Energy, Mobility, Innovation and Technology (BMK), the PPPI Service Centre aims at building bridges between public procurers and innovative companies, and acts as the single point of contact for innovation procurement issues in Austria including pre-commercial procurement. The PPPI service point is a one-stop shop for all questions about PPPI and its operational implementation.
The PPPI Service Centre offers the following services:
Acting as a one-stop shop for questions concerning innovation procurement
Providing contracting authorities with technical support to carry out innovation procurement:
The PPPI Service Centre helps contracting authorities identify potentials for innovation procurement projects (describing needs and functional description etc)
BBG helps contracting authorities carry out an actual innovation procurement procedure
Administering the IÖB digital innovation platform: This digital platform provides the following two modules:
Innovation Marketplace: The platform contains an online marketplace for innovative companies whereby they can showcase their innovative products and services. Contracting authorities can use this marketplace for market research purposes and will be able to find solutions for public administration that have been tested for their level of innovation.
IÖB Challenges: In case contracting authorities do not find a suitable innovative solution in the Innovation Marketplace, they can announce an IÖB challenge whereby they post their challenges and problems so that innovative companies can submit their innovative solutions that solve those challenges.
Coordinating a national funding scheme for innovation procurement projects funded by the BMK
Preparation cost:
Consulting costs for the design and implementation of IÖB challenges on the IÖB innovation platform: up to 90% of the eligible costs but limited to EUR 15 000 of the eligible costs.
Costs for legal and/or technical advice to prepare tenders: up to 90% of the eligible project costs but limited to up to EUR 20 000 of the eligible costs.
Cost to procure innovative goods and service
Investment funding for innovative procurement projects: up to 90% of the eligible costs but limited up to a maximum of EUR 100 000
Providing trainings for contracting authorities
Organising networking and events
Supporting Austrian ministries in the implementation of the PPPI guiding concept on a national level
A certification framework certifies the levels of skills and competences acquired. It is closely linked to a competency model. A certification framework allows public procurement officers to improve their knowledge and skills through targeted training on the competences required under the certification framework. Thus, it may greatly contribute to recognising public procurement as a professional task, which will lead to increasing the motivation of the workforce. (OECD, 2023[1])
According to the tentative result of the 2024 monitoring survey for the OECD Recommendation on Public Procurement, 43% of the OECD countries (15 out of 35 countries surveyed) have a national certification framework. 81% of the OECD countries without certification framework are developing it currently or are considering the possibility of developing it in the future.
Currently, Estonia does not have a certification framework for the public procurement workforce. However, the country has been working with the OECD to consider the possibility of establishing it through analysing lessons learned by other countries that have already introduced certification framework as well as by conducting a survey to public procurement officials in Estonia to understand their appetite for this mechanism. Based on these research and analysis, OECD will prepare a separate note on the advantages and potential challenges of introducing a certification framework, including a proposal for the Ministry of Finance on the considerations to establish a certification framework in Estonia.
Motivating public procurement officials is a crucial factor not only for maintaining the high performance and outcome of public procurement, but also for attracting talented professionals. The OECD Recommendation of the Council on Public Procurement calls upon countries to provide attractive, competitive and merit-based career options for procurement officials, in order to motivate them and enhance their performance. (OECD, 2015[3])
Incentive mechanisms play a key role in motivating public procurement officials: they are used to attract and retain qualified staff and motivate them to perform better. Incentives can be classified as financial (e.g. wages, performance-linked bonuses, pensions, allowances) and non-financial (e.g. professional development including training courses and certification, work recognition and award, working conditions)
This part overviews practices of financial and non-financial incentive mechanisms to motivate public procurement officials in Estonia,
4.6.1. Financial incentives
Financial incentives represent the principal type of incentives used to reward civil servants, mainly through salaries and monetary allowances. However, it is difficult for the public sector to apply financial incentives due to fiscal constraints arising from the economic status and/or the rigidity of their public employment frameworks.
Estonia is not an exception like many other countries. However, Estonia has some practices of financial incentive mechanisms by the State Shared Services Centre (RTK), a national central purchasing body of Estonia. RTK put in place some financial incentive mechanisms to motivate and retain public procurement officials by assuring competitive salaries based on the labour market benchmark, specifying five basic salary classes, and providing variable remunerations such as performance-based bonus in addition to basic salary. (see Box 4.5)
The Salary Guide of the State Shared Services Centre (RTK) aims at providing motivating remuneration in line with the situation on the labour market, to ensure that RTK's strategic objectives are achieved with competent and motivated staff, by rewarding:
Competitively in the labour market (external equity): Ensuring that a basic salary is at the median level of the average basic salary paid to people doing similar work in the whole of Estonia, based on the salary data from the Estonian labour market;
Fairly within the organisation (internal fairness) – similar salaries for jobs with similar functions and levels of complexity, and for similar performance; and
Based on the individual performance.
It specifies the following five salary classes for basic salary, each of which has the maximum and minimum rate:
In addition to the basic salary, the RTK adopts variable remuneration which can be paid based on the performance and/or additional duties. The total amount of the variable remuneration payable to the official may not exceed 20% of the total amount of the basic salary payable to the servant during the same calendar year. It consists of the followings:
Performance-based bonus: Payable up to a maximum of two months' basic salary.
Supplementary service allowances: Payable to additional tasks of a large scale which are not foreseen in the job description or which arises from a substantial temporary increase in the workload.
A replacement allowance shall be paid to the staff in respect of the performance of the duties of a temporarily absent staff in proportion to the extent of the replacement where those duties are not foreseen in the job description or entail a significant increase in the workload of the compared with the job description. A substantial increase in the workload shall normally be considered to be the replacement of an absent official for a long period (normally not less than two months). In the case of a shorter period, a replacement allowance may be granted where the absence of the staff results in a significant increase in the workload of the staff affected by the absence. The replacement allowance shall be paid to the staff in proportion to the volume of the replacement. As a rule, the replacement of one substitute may not exceed 30% of the work to be replaced.
Lastly, allowances for working in special conditions (e.g. additional work time which exceeds the regular worktime, working in public holidays).
The Value Proposition of the RTK also specifies financial incentives such as life event / sick leaves and financial support for recreation activities such as sports, physiotherapy, psychotherapy.
Source: RTK’s Salary Guide, and the information provided by the State Shared Services Centre (RTK)
According to the survey carried out by the Chartered Institute of Procurement & Supply (CIPS), the eligibility for a performance-linked bonus in the public sector (27%) was considerably lower when compared with the private sector (66%), implying that the public sector tends to be more reluctant to adopt a performance-linked bonus than the private sector. (Chartered Institute of Procurement & Supply (CIPS) and Hays, 2024[17])
It is worth mentioning that the RTK has a performance-based bonus system like other CPBs such as Hansel (Finland) and CPO LT (Lithuania) (See Box 4.6). Each year, a performance-based bonus is payable up to a maximum of two months' basic salary based on the result of the performance interviews. The following criteria will be taken into account when determining the individual performance:
Efficiency (e.g. the total number of performed operations compared to the average of the department/service);
Quality of work (e.g. low number of errors, quality of tasks);
Compliance with the agreed core values;
Time management (e.g. meeting agreed deadlines);
Customer satisfaction (e.g. customer satisfaction survey);
Active involvement in tasks; and
Time worked during the period for which the performance-based bonus is paid (minimum 4 months).
The provision of a performance-based bonus is also subject to the availability of the budget. However, 100% of the staff at the public procurement department of the RTK received it in 2023, although its amount differs among the staff, depending on the performance.
Hansel (Finland)
Hansel Ltd acts as a central purchasing body for central and local governments in Finland. It is a non-profit limited company which is owned by the State (65%) and the Association of Finnish Local and Regional Authorities (35%),and finances its operations through service fees of FA/DPS paid by the suppliers based on the value of purchases. Currently, the maximum service fee that can be charged is 1,5 % of the contract value with an average of 0.83% in 2022. In 2022, 1 433 contracting authorities and 981 economic suppliers used the services provided by Hansel. Hansel provides competitive salaries which are closer to the private sector.
Hansel has introduced the performance bonus mechanism to motivate its officials. There are two types of performance bonuses: performance bonus of up to 15% of the annual salary and a one-off set bonus between EUR 300 and EUR 3000 for particularly good performance. The performance bonus mechanism is mainly financed by the revenues from service fees (such as user fees from FA/DPS).
The performance bonus can be paid up to 15% of the annual salary of each staff. For members of the management team, the maximum bonus can be up to 30% of the annual salary, if the performance has been exceptionally good. Performance bonus assessments are based on contract usage, customer satisfaction and contribution to the organisational strategy. In 2022, EUR 905 000 were paid as the performance bonus with an average rate of 12.5% (against the possible maximum 15%).
In addition, Hansel employees may receive a one-off bonus between EUR 300 and EUR 3 000 for particularly good performance. The managing director decides on the award of a one-off bonus based on a proposal from the employee’s supervisor. In 2022, the total EUR 8 600 of one-off bonus was awarded to 13 employees.
CPO LT (Lithuania)
CPO LT acts as a national central purchasing body of Lithuania. CPO LT applies remunerations based on performance up to 15% for extra tasks.
Source: (OECD, 2024[18])
4.6.2. Non-financial incentives
There are many kinds of non-financial incentives. Developing a certification framework and structured capability-building initiatives could contribute to motivating public procurement officers through professional development and to increased professional recognition. Packages related to work-life balance such as holidays and flexible working conditions also represent non-financial incentives. In addition, establishing mechanisms such as performance management system (constructive feedback), an excellence award system or professional networks could play a role in motivating public procurement officials and increasing the sense of professionalism. (OECD, 2023[1])
RTK shows good practices in Estonia in this field. RTK prepared a document called the Value Proposition to put in place many non-financial incentive mechanisms such as well-being (flexible working conditions, leaves, support for recreation activities) and professional development opportunities to motivate and retain public procurement officials. (See Box 4.7)
The Value Proposition of the RTK mentions non-financial (some financial) incentives by describing the principles on the well-being, professional development, motivation and recognition of its staff, with the aim of ensuring their commitment to the achievement of RTK's strategic objectives.
Well-being:
Flexible working arrangements (both time and place flexibility)
Life event / sick leaves
Financial support for recreation activities such as sports, physiotherapy, psychotherapy
Children's rooms in the offices of Tallinn and Tartu
Professional development opportunities:
Induction programme for new staff or the ones returning from long-term absence (e.g. maternity leave) during the probationary period (four months).
One personal development day on a quarterly basis, which can be used to consult professional literature or case law, and / or to participate in an e-course or otherwise for job-specific self-development.
Performance appraisal interview: The line manager shall conduct at least two structured interviews per year with the staff members in accordance with the staff interview policy. The staff member will receive feedback on his/her performance in the previous period and a plan with objectives for the next period will be developed. The main purpose is the professional development of the staff member.
Encourage for the staff to move within the organization, taking into account the preference on professional development in different areas of work
Training opportunity
Week of Career Development in November in which the staff has the opportunity to learn about the work of a specialist in another field
Motivating staff
Performance-based bonus
The Employee Initiative Fund (TAF) to support employee activities, with the aim of supporting and enhancing collective activities and initiative and providing the necessary financial support for activities that promote organisational culture and responsibility, thus enabling the realisation of ideas.
Source: Value Proposition of the RTK and the information provided by the State Shared Services Centre (RTK)
Recognition is an effective way to motivate public servants through acknowledging good behaviours or actions with no or little cost, but it is underutilized. (Van Wart, 2008[19]) Empirical studies also demonstrate that recognitions are strong motivators in the public sector. (Anderfuhren-Biget et al., 2010[20])
Currently, Estonia does not have excellence award system to recognise the achievements of contracting authorities and/or individual public procurement officials. Recognising its relevance, however, the Ministry of Economic Affairs and Communications has the plan to establish innovation procurement excellence award system, in accordance with the Action Plan of the Public Procurement Strategic Principles. (Government of the Republic of Estonia, 2024[5]) Indeed, the Government Office has taken the initiative to open the application for Public Sector Innovation Awards by February 24, 2025. The award of outstanding initiatives will be announced on the 29th of April 2025. (Government Office of the Republic of Estonia, 2024[21]) Although establishing innovation procurement excellence award system will contribute not only to increasing the sense of professionalism among public procurement officials but also promoting the uptake of innovation procurement in Estonia, it might not cover other dimensions, to name a few, green public procurement or innovative way of carrying out public procurement procedures. Countries like New Zealand and Lithuania established excellence award system to acknowledge the public procurement workforce in various fields. (See Box 4.8Box 4.8) Therefore, Estonia could consider the possibility of establishing excellence award system for the public procurement workforce for varieties of categories.
New Zealand
The New Zealand Procurement Excellence Forum was formed in 2014 to lift the capability of procurement practitioners in New Zealand. The Forum brings together like-minded and committed procurement professionals, from across the public and private sectors, who consider the procurement profession as a developing specialisation, and are willing to share their knowledge with each other for the purpose of further enhancing the recognition of the procurement profession in New Zealand. The current main initiatives of the Forum consist of the two pillars: Championing Procurement Excellence to deliver successful outcomes for New Zealand and Fostering People and Capability.
As a part of this initiative, the Forum started the annual award event in 2016, New Zealand Procurement Excellence Awards. This award was established to raise the profile and awareness of procurement, or what great procurement looks like and how it can contribute to better outcomes for New Zealand, across both private and public sectors. The founders thought that it was possible only through sharing great stories of achievement across many organisations in both the public and private sectors, inspiring others to raise the bar, and to make sure that organisations achieve more than just good practice and compliance.
The New Zealand Procurement Excellence Awards are the foremost recognition of industry-leading procurement practice in New Zealand. There are five competitive categories that have been established to recognise New Zealand’s finest:
Young Procurement Professional of the Year (30 years old or under)
Procurement Professional of the Year
Most Effective Teaming of the Year
Social or Environmental Impact of the Year
Most Innovative Project of the Year
The application must be related to activities and initiatives of procurement. The judging criteria are disclosed for each award category. The overall Supreme Winner will be selected from the category winners to recognise the highest achievement of the year in the procurement field in the country. The prize of the winner, for example for 2016, includes not only the award certificate and trophy but also a paid trip to any procurement conference anywhere in the world.
The New Zealand Procurement Excellence Awards contribute not only to knowledge sharing among procurement professionals, but also to enhancing the motivation and incentives of public procurement experts in New Zealand, thus lifting the recognition of procurement as a professional task.
Lithuania
As part of its action plan to professionalise the public procurement workforce (2019 – 2022), the Ministry of Economy and Innovation of Lithuania established an excellence award system for the public procurement workforce in 2021 in collaboration with the Public Procurement Office for the purpose of motivating the public procurement workforce. This excellence award system rewards contracting authorities in four categories: the most sustainable, the most innovative, the smartest, and the best procurement governance/processes.
Establishing a professional network or a community of practice also contributes to motivating public procurement officials, facilitating networking and the exchange of ideas, and increasing the sense of professionalism. Establishing the professional network will be beneficial for specific topics such as technical specifications and green procurement, because the members of the network will contribute to increasing the sense of professionalism of public procurement practitioners. (OECD, 2023[1])
Currently, Estonia has a network of innovation procurement as well as an informal CPB network. However, Estonia does not have a nation-wide professional network like the case of New Zealand Procurement Excellence Forum (See Box 4.8), a community of practice in the Netherlands (PIANOo) with approximately 80 sub-communities organised according to specific procurement topics (European Commission and PWC, 2016[23]), and the Public Buyers Community administered by European Commission with 21 different communities such as CPB and procurement of AI. (European Commission, n.d.[24]) In the long run, Estonia could consider the possibility of establishing a nation-wide professional network for the public procurement workforce.
An increasing number of countries have recognised the role that knowledge centres such as universities, think tanks or policy centres can play in promoting professionalisation. The OECD Recommendation of the Council on Public Procurement calls upon countries to promote collaborative approaches with knowledge centres to improve skills and competences. (OECD, 2015[3]) Indeed, there are many types of collaborative approaches with knowledge centres such as developing and/or providing training programmes (62% of OECD countries in 2020), a joint research programme on public procurement (44%), joint seminars and workshops on public procurement (62%). (OECD, 2023[1]) Some countries also collaborate with universities to encourage future procurement specialists by increasing awareness of public procurement as a professional task among young people. These initiatives include, but are not limited to, offering courses or degree programmes in public procurement, thesis contests, and internship programmes. (OECD, 2023[1])
Estonia has the great opportunity to enhance collaboration with knowledge centres. Currently, Estonia introduced collaborative approaches with knowledge centres in thesis contexts and occasional internship opportunities. For example, Estonian Research Council administers a National Contest for University Students each year to promote research among university students. The contest is open to all students studying in Estonia (including foreign students studying in Estonia) and Estonian citizens studying abroad. Research papers can be submitted on all university levels including applied higher education and bachelor’s studies, master’s studies, doctoral studies and in all fields of research (Natural Sciences, Engineering and Technology, Medical and Health Sciences, Agricultural and Veterinary Sciences, Social Sciences, and Humanities and the Arts). There are various categories for the prize with the total award fund of EUR 181,374.78 for the year 2024. (Estonian Research Council, 2024[25]) Public procurement is one of the eligible research fields, and in 2023 the thesis on Factors Promoting and Restricting the Acquisition of Innovation at the Level of Estonian Central Government submitted by a student of the University of Tartu received the special award from the Ministry of Finance. (Estonian Research Council, 2023[26])
In addition, the Faculty of Law of the University of Tartu and the Johan Skytte Institute of Political Studies developed a micro-degree program, the Public Procurement Management for Beginners. (University of Tartu, 2023[27]) This master’s programme is designed for those with less than two years of work experience in the field of public procurement so that they can acquire the following knowledge and skills on public procurement:
know-how to apply Estonian and EU public procurement law, including the general principles of public procurement;
identifying the main legal risks of a specific public procurement, how to avoid or remedy them;
having a good overview of planning and organising procurement;
navigating the state procurement register and necessary documents;
thorough knowledge of the objectives, process and conditions of organising public procurements;
preparing public procurement documents; and
know-how to organize public procurement efficiently and accurately.
The duration of the programme is 5 months (September 2023 – January 2024 for the year 2023). To complete the programme, candidates are required to obtain 12 credits (60 hours of classroom work and 252 hours of independent work), which consist of the three subjects: Public procurement law (3 credits), Preparation of procurement documents (3 credits), and Organisation of public procurement (6 credits).
Estonia could benefit from further promoting collaborative approach with knowledge centres such as developing procurement courses and degree programs. In Lithuania, for example, the government and a university collaborated to develop its first-ever 1-year master programme on public procurement and provided scholarships to some of the students. (See Box 4.9)
The Ministry of Economy and Innovation and the Public Procurement Office in Lithuania collaborated with Mykolas Romeris University to launch its first-ever master’s programme in public procurement, the Master of Law (LL.M.) in Public Procurement Law in September 2021. They provided advice on the curriculum. CPO LT, the largest central purchasing body in Lithuania, grants scholarships to some of the students enrolled in this master’s programme (5 students in 2022 and 10 students in 2021).
This master’s programme is designed to prepare highly qualified specialists in public procurement law who are able to:
provide legal advice in this field;
explain the latest issues and development trends in public procurement law;
organise public procurement;
analyse and evaluate complex legal contexts related to public procurement;
promptly and efficiently resolve public procurement relations arising legal disputes;
represent contracting authorities or economic operators in the courts; and
submit proposals to the legislator regarding the improvement of the legal framework of public procurement.
The duration of the programme is 1 year. The programme focuses more on the practical aspects than on academic ones. To complete the programme, candidates are required to obtain 60 credits including passing the final examination. However, a master's thesis is not required. In general, classes take place in person.
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