Top five tips on smart public sector procurement

Gurjit Degun
posted by Gurjit Degun
9 July 2014

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9 July 2014 | Gurjit Degun

European governments need to introduce directorates for procurement to establish effective purchasing goals and work on competencies to be successful in public buying.

That’s the advice from Gustavo Piga, professor of economics at the University of Rome Tor Vergata, who was speaking at the European Commission’s third annual conference on public procurement in Athens, Greece, two weeks ago.

His top five tips for smart public procurement are:

Introduce a ministry for public procurement. “Twenty per cent of GDP, this is on average how much we spend, one fifth of the creation of well-being of a country,” said Piga. “If you need to tackle this giant, you need coordination. Certainly there is a need in every country to put public procurement more at the centre stage.” He added a procurement minister should also monitor data for short-term efficiency. “This is a call for something not all governments have – not centralisation of procurement but centralisation of data,” explained Piga. “The prime minister of that country needs to have in real time data of who buys what, when, where, why. And then obviously, the minister has to propose reforms for long-run efficiency.”

Work on competency. Piga told delegates corruption and incompetence “go hand in hand”. He added: “You need to fight both and the best way is to fight the battle of competences. The European Commission’s role to push competency is very important.”

Develop a plan to improve performance. "In some countries there is a national action plan towards performance, " said Piga. "It is based on competence, building on rewarding competencies. Why don’t we make public procurers in Europe like diplomats or judges but with a lifetime career where a big chunk of the 20 per cent of GDP is used to pay them? [Then] see if you pay them if they don’t want to achieve competences, if they want to be corrupt. You need to set them internal goals but don’t make goals comparable across administrations.”

Fight cartels. This is “fundamental,” said Piga. “Cartels and corruption go together. Where corruption is strong cartels find a way to get in. Where cartels are strong, corruption is far more stable. You need to fight the two of them. Cartels are pervasive in public procurement. This is why a very important policy must have a lot of resources to fight cartels.”

Invest in technology. Gather data in a machine readable format, not pdf, said Piga. “This is the true new frontier to allow spend management both at the policy and procurers level,” added Piga. “It needs to fight waste, cartels.”

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