OECD Public Governance Reviews Reforming Public Procurement Progress in Implementing the 2015 OECD Recommendation

This report presents progress made by OECD countries and other economies on their adherence to the 2015 Recommendation of the Council on Public Procurement. The Recommendation provides strategic guidance in addressing challenges encountered in public procurement and identifies good procurement practices in order to ensure a strategic and holistic use of public procurement. This report discusses the Recommendation's continued relevance, how widely it has been disseminated, and whether it requires updating or revision. Foreword 5 Acknowledgements 6 Abbreviations and acronyms 10 Executive summary 13 Key findings 13 1 Strategic uses of public procurement to achieve broader policy outcomes 15 1.1. Supporting implementation of public procurement to encourage innovation 18 1.1.1. Using procurement procedures to encourage competition in the area of innovation 21 1.1.2. Digital transformation in public procurement – the path to greater effectiveness, efficiency and transformation 23 1.2. Using Green public procurement to address environmental challenges 24 1.3. Improving economic results through public procurement 25 1.4. Public procurement as a tool for inclusive growth 26 1.5. Assuring global supply chains by using public procurement to support responsible business conduct 29 1.6. Understanding the trade-offs for informed decisions 32 References 35 2 Investing in the future: building skills and capabilities in public procurement 39 2.1. Assessing capability to support future planning to improve public procurement systems 40 2.2. The impact of capacity and capability on public procurement governance and funding models 42 2.3. Using the right strategies, tools and guidelines to support public procurement capability and capacity development 43 2.4. Using competency models to assess baselines capability levels and address needs 43 2.5. Training to support the increasingly strategic nature of public procurement 44 2.6. Recognising the professionalisation of public procurement with certification 45 2.7. Professionalisation of the procurement workforce to address both capability and capacity constraints 47 2.7.1. Learning together - collaborative approaches to addressing gaps in capability 49 References 51 3 Fostering trust through a risk-based approach to public procurement 53 3.1. Supporting accountability through oversight and control mechanisms 60 3.2. Transparency, a mechanism to ensure sound governance in a public procurement system 62 3.3. Integrity, a cornerstone of good governance in public procurement 66 3.3.1. Promoting common values for a culture of integrity 67 References 71 4 Built for purpose: Towards a more efficient and effective public procurement system 73 4.1. Achieving greater efficiency through public procurement 74 4.1.1. Market efficiency and procurement processes 74 Market engagement to develop realistic and effective tender specifications 74 Redefining efficiency: MEAT criteria and value for money 75 Adapting the procurement method depending on value 76 4.1.2. Using collaboration for improved outcomes 77 Leveraging e-procurement tools for efficiency 83 4.2. Understanding the value of procurement 86 4.2.1. Realising the value of public procurement data 86 4.2.2. Measuring efficiency to understand value 87 Measuring the performance of public procurement 87 Understanding private sector inputs that improve public services 89 Key performance indicators (KPIs) 90 Assessing the efficiencies of collaborative instruments and centralisation 92 Insufficient evaluation of procurement policies and systems 94 4.2.3. Managing procurement dividends 96 References 99 Annex A. Regional outreach of the Recommendation: Performance in LAC countries 102 Implementation for results in LAC countries 103 Integrating risk management in LAC countries. 106 Effective risk management and the establishment of controls 106 Driving performance improvements through evaluation in LAC countries 109 Balancing the objectives of public procurement systems in LAC countries 111 Developing the skills and capabilities of procurement professionals in LAC countries 113 References 115 Blank Page 2