Stimulating Recovery with Public Procurement

This article was written by Nicolás Penagos of OCS.

Countries in the region are facing the challenge of addressing the crisis resulting from the pandemic while striving to stimulate their economies. In this context, we must not forget the need for efficient public procurement, i.e. buying quickly, intelligently and with transparency. 

Public procurement is one of the mechanisms governments can use to guarantee rights, social welfare and promote a healthy market. Putting them at the center of the national ecosystem is recognizing the multiplier effect of good decision-making on the matter. 

Countries that have excelled in their response capacity share common factors: policies that open up emergency procurement, coordinated decision-making based on priorities, use of data and technology to improve processes, teamwork through innovative partnerships with other social stakeholders, and an environment of civil participation that builds trust and promotes monitoring of services. The combination of these features improves government resilience, while providing solutions to the challenges posed by this new context.

At Open Contracting Partnership we have seen how countries that publish open data on their contracts and use it to make decisions are better prepared to address the challenges posed by the pandemic. We have supported these actions by sharing guides, case studies and strategies in our COVID-19 Resource Center to help them tackle these pressing tasks. 

Public procurement is currently becoming the center of attention. It is literally saving lives and it is now a lifeline for public healthcare systems.  The reforms currently underway can impact not only these emergency purchases, but also improve the overall management of public procurement.

Public investment: a path to recovery

Also, prioritizing a strategic design of public procurement could create more jobs and help the economy bounce back. 

In the region, Chile and Peru have opted for comprehensive investment programs with public procurement and concessions at the center of their model. For the economic benefits derived from these programs to realize their full potential, there needs to be a large number of companies bidding in and being awarded public contracts. Transparency of purchasing processes including open data helps us learn about and monitor competition indicators to ensure that such stimulus is equally distributed. 

In addition, Chile has established an independent Public Spending Commission to monitor and issue recommendations on the best use of the funds in the nation’s USD 15 billion stimulus package. The Commission has recommended higher transparency standards for the use of these funds.

We have seen cases from countries that are actively seeking to contact and build relationships with more suppliers. Dominican Republic organized fairs where they teach how to sell to the government and provide advice to submit a winning bid, all with a cross-cutting gender equity approach. In Cali, Colombia more than 500 providers were trained in the use of data tools to obtain information on future contracts, they regularly invite companies to speak to municipal authorities, and have a focus on encouraging the recruitment of head-of-household mothers.

The GovTech sector, which continually supports governments to increase their efficiency and technological adaptation, can be a key ally in improving the ability to address the problems and needs of citizens, specifically in the context of telework and social distancing measures affecting public services.

Design-driven opening: Technology and data that catalyze efficiency

Another effect of the pandemic has been the acceleration in processes of modernization and digitalization of procedures. Faced with the complex network of essential processes in public institutions, the application of standards such as the Open Contracting Data Standard (OCDS) enables interaction between agencies and departments. 

In Colombia, for instance, the national and several local governments took steps to improve competition and promote economic development. These measures coexist in a new environment: an electronic procurement system that acts as a tool to promote integrity and efficiency in the procurement process and as a high-quality performance monitoring tool. Transparent disclosure of timely, user-accessible data, plus the use by government entities to make decisions, add to a new transparency-based, data-driven culture. 

As part of its emergency procurement management, Paraguay has made disclosure a determining factor. The accountability portal of the Paraguayan government displays information on programs, subsidies, contracts and donations for the emergency caused by COVID-19. And it not only makes purchases more transparent, but provides information on the financing of such programs, wages, and distribution of funds. 

Paraguay was one of the first to adopt the open procurement approach and use the OCDS. When the emergency started, they moved quickly to ensure openness in emergency purchases. Our technical support group provides technical support for such disclosure, and we are always looking to assist other countries and cities in opening their procurement.

Innovative collaboration: rethinking the relationship with civil society

The emergency has exposed the need to rethink collaboration between the work of governments and civil society organizations.

Faced with these difficulties, many social initiatives have engaged in auditing their public spending by making incredible efforts to access information in contexts with little data opening. And in places where information about public procurement systems is available, promoting feedback options on their usefulness and data quality would improve management. 

The Procurement Observatory of Poder Ciudadano in Argentina is a clear example of the impact of civil participation in relation to procurement. At one of our community events, they told us how the database they update on a daily basis is used by the Comptroller General’s Office to warn about potential corruption cases, and invited us to discuss how collaboration is a determining factor for the sustainability of open data initiatives.

In addition, this multistakeholder collaboration in public procurement will be decisive for the path to economic and social recovery in the foreseeable future.