ChileCompra: A public policy to enhance transparency and efficiency

1. ChileCompra: A public policy to enhance transparency and efficiency

2. Agenda • The Public Marketplace in Chile • Outcomes • A Public Management Reform • Key considerations for a successful implementation

3. The Public Marketplace in Chile

4. Procurement system overview Supported by a web-based marketplace.

5. Procurement system overview Stakeholders provide the check & balance structure Public Procurement Court Contracting agencies are accountable for their procurement process ChileCompra is agency responsible for operating and regulating the market Supreme Audit Institution

6. 2009 ChileCompra Performance Transactions worth 3.5% of GDP 6.200 Mio USD 1,650,000 Purchase Orders 500,000 Business Opportunities 100% of all Agencies 90,000 Businesses Placing Bids 900 Public Agencies 4.8 in 2008 5.3 Bids Per Process 2,000,000 Visitors Per Month Chile Population: 16 million 15,000 Contracting Officers

7. Outcomes

8. In terms on Integrity CPAR IDB 2008 OECD/DAC 2.5 2.9 2.8 2.7 2.73

9. Suppliers’ Opinions: Transparency in the market place • ¿Half Empty? • ¿Half Full?

10. Leaders’ Opinions: Transparency in the market place Public Sector Trade Unions Judicial Power Opposition Political Parties Government Political Parties Public Sector Workers Congress and Members of Parliament Citizens International Organizations Source: Feed Back

11. 2009 savings up to USD 180 MM Hospital Fully Equipped Police Cars Cataract Surgery Post Degree Scholarship Computers for Children

12. A Public Management Reform

13. 1998 2000 2003 2004 2008 Kingdon (1995) 2003: Window of Opportunity Problem: “Regardless of the degree of development, public procurement is a risk area for corruption” (Thai, 2001). Problems Politics: Transparency and corruption scandals in 2003. Solutions Politics Solutions

14. ChileCompra was a project in a broader agenda aiming to reform the State. • Other examples: • Quality services for the citizens • Improvement the planning and control management • Electronic Government • Improve cooperation between privet and public sector • Decentralization of the State • New Ministry of Energy and New Ministry of Environment a Participation Strategy

15. Top-Down Implementation • Political Support • The Ministry of Finance leads the Reform • No restriction on resources • “Sticks and carrots” • Objectives are steady, well-understood and shared by every stakeholder • Officials are well-paid and have sound professional records.

16. The Role of Leadership Waissbluth, 2006, “La Reforma del Estado en Chile 1990-2005” (TheStateReform in Chile 1990-2005)

17. Key considerations for a successful implementation

18. The relevance of data BI Business Intelligence CRM Customer Relationship Management Customers

19. Threat: Small & Medium Enterprises perception of further market concentration

20. 18% 18% 24% 35% 18% 24% Response: Having more suppliers is a strategic goal Transactions by Company Size National Economy ChileCompra 2006 ChileCompra 2007 Source: Chilecompra

21. Threat: Resistance to change

22. Response Improve contracting officers capabilities

23. Operations • Initial Investment in SW: USD 2 MM • ChileCompra’s budget: USD 11 MM • Goods and services: USD 6 MM • Data center : USD 2,8 MM • Customer support : USD 0,5 MM • Software : USD 1,5 MM • Training: USD 0,3 MM • Others: USD 0,9 MM • Internal HHRR: USD 5 MM + Service Level Agreements All figures in USD millions per year

24. Thank You José Miguel de la Cuadra Head of Public Procurement Division of ChileCompra Ministry of Finance Josem.delacuadra@chilecompra.cl