Achieving a Transparent,
Efficient and Professional
Public Procurement
Smart Public Procurement:
Efficient Management
though e-Procurement
20th June 2014
Athens, Greece
Prof. Gustavo Piga
Department of Business Government Philosophy Studies
University of Rome Tor Vergata
www.gustavopiga.it
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What is Smart?
Effective procurement: buying the right stuff* …
* At the policy level: how much green? how innovative? …
* At the procurer’s level: unbiased by corruption/incompetence,
coherent with specifications …
… from the right people**.
** At the policy level: Social preferences? Industrial preferences? …
** At the procurer’s level: unbiased by corruption/incompetence,
dynamically consistent ...
With Central Purchasing Bodies often
between policy and procurement level
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What is Smart?
«The Right Stuff from the Right People»
depends also on the cost of such choices
At the policy-level: How costly is green? And buying from SMEs only?
At the procurer’s level: How competent are we (e.g. for innovation
purchases)? And how organized (e.g. for vendor ratings purposes)?
Efficient procurement:
buying it also at the right cost (organizational, transaction, price + …)
Short-run efficiency: taking organization, e-proc, competences as given;
Long-run efficiency: choosing the right level of centralization, e-proc,
competences etc…
Keeping in mind that some «external constraints», like cartels and corruption,
can be faced both in the short-term with good procurement practices and in
the long-run with good institutional reforms.
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Advice number 1
Coordination Matters
a)
b)
c)
d)
Why not a Ministry for Public Procurement?
that establishes national goals for effectiveness
monitors data for short-term efficiency
proposes reforms for long-run efficiency
Italy’s recent merging of Anti-Corruption and Procurement
Authorities may internalize synergies.
UK setting targets for SMEs
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Advice number 2
Competences are fundamental
Waste derives from Corruption and Incompetence.
Study by Bandiera, Prat, Valletti points to 2% of GDP in
goods and services only, only in prices.
Incompetence represents 83% of waste
Corruption and incompetence are strategic complements,
reinforcing each other. Fight the weakest!
Role of European Union in setting interdisciplinary standards
of knowledge and mandating professionalism is key
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Advice number 3
Organization is key
National Action Plan toward Performance
Where competences are stressed and rewarded
Where the profession of the public procurer is a lifetime career
Where output-based goals are set-up internally
within a medium-term horizon
Centralization and reduction of purchasers
must be traded-off with SMEs concern
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Advice number 4
Fighting Cartels is Fundamental
Cartels and Corruption sustain each other.
Cartels are pervasive in public procurement and
stable.
Giving weight and resources to Antitrust authorities
in public procurement is essential: data gathering
and incentives cannot be left in the hands of the
public procurers.
SMEs are hit by corruption and cartels,
recent procurement scandals confirm
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Advice number 5
Technology? Yes! But: Which one, How, for Whom
Data gathering, in machine readable format (not
pdf) is the true new fronteer to allow spend
management both at the policy and the procurer’s
level.
Issue of how transparent should data be.
E-proc is necessary but not sufficient to help SMEs
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Conclusions
20% of GDP requires caring,
effort, attention, dedication.
A huge investment.
Be smart, make procurement
smarter.
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