“ Public Procurements in Practice ”

1. “Public Procurements in Practice” December 14th 2010

2. The Importance of Procurement Monitoring • Public procurement affects all aspects of people’s lives and assumes a large share of government budgets • The Organisation for Economic Cooperation and Development (OECD) has estimated the value of government procurement markets worldwide to beUS $ 2 trillion annually • Transparency International (TI) estimates that damage from corruption on public procurement can represent on average 10 to 25% of a contract’s value • Corruption in public procurement is not just about money: it costs lives

3. Who Can Monitor? • Everyone – from individual citizens to high level government officials – can play a role in ensuring that tax payers’ money spent on procurement delivers good quality services at a fair economic cost for all • Governments and other control bodies alone do not have the capacity to monitor all procurement processes effectively • Civil society can play an important role in bringing independence to procurement monitoring • The inclusion of all stakeholders acts to broaden and strengthen procurement monitoring • TI has followed this approach for over 15 years

4. The Integrity Pact • One of TI’s flagship tools - developed to help governments, businesses and civil society fight corruption in the field of public contracting • Agreement between government and all bidders for a (public sector) contract so that neither side will pay, offer, demand or accept bribes • Used successfully in more than 15 countries around the world in the last 10 years, in all sectors and for all types of contracts Some Examples: • Germany – Berlin Schönefeld new international airport, a project worth € 2.4 billion • Latvia – The construction of the National Library - Ministry of Culture/New Three Brothers Agency • Mexico – IPs have been used in nearly 100 contracts worth approximately US $ 30 billion in different sectors

5. Other Examples of Procurement Monitoring Bulgaria : Expert Monitoring Group • Main sources of information to carry out monitoring: audit reports of the National Audit office and State Agency for Financial Inspection and interviews with experts • Expert Monitoring Group (EMG) formed by public procurement experts and NGO representatives focus on 3 categories; (i) methodology indicators; (ii) data collection tools; and (iii) on the spot monitoring • Monitored 13 conditions to be determined using 28 standard indicators of transparency and accountability • Feedback on results to government and advocacy for procurement reform

6. Other Examples of Procurement Monitoring Argentina : Public Hearings • The responsible authority convenes citizens, businesses, experts; presents details of project and procurement provisions; and enables participants to express their suggestions and objections • Recommendations to be taken into account and incorporated where appropriate • Open to citizens from all backgrounds, ages and interests • Implemented primarily for city/local government projects • wider involvement enables wider scrutiny on the behaviour of contracting parties both during the bidding process and contract execution • Some public hearings can attract close to 500 attendees

7. Procurement Monitoring Innovation • TI is constantly working to find new ways to monitor procurement processes more effectively • The set of indicators developed by TI Serbia to measure performance of the public procurement system is testament to this • The whole TI movement expects to learn from Serbia, and adapt and apply the indicators to other countries and contexts • We also hope the project will raise particular interest in the European context