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Is Procurement the Next Horizon for Government Transparency?


February 4, 2013

Doug Hadden, VP Products

I attended the International Consortium on Governmental Financial Management( ICGFM _ DC Forum last month where Marcela Rozo from the World Bank described the Open Contracting initiative. Her presentation is available and some of my notes are located below via Storify.

Ms. Rozo pointed out that even a 1% improvement in government costs through procurement transparency is material because total annual government procurement is $9.5T. Procurement transparency leads to increased competition and reduced corruption. Jorge Claro, formerly of the InterAmerican Development Bank, and an expert in government procurement at a DC Forum in 2008 suggested that Public Sector Procurement accounts for approximately 15% to 20% of GNP in many countries Procurement has traditionally been poorly managed with inefficiencies adding anywhere between 15% to 20% to the cost of the works, goods and services being procured. Corrupt practices add an additional 15% to 20% to the cost of those works, goods or services In other words, inefficiency and corruption combined could account for 2.25% to 4% of GNP in most countries, thus negating growth – yet there seems to be little concern about this loss of GNP in most countries.

These are staggering figures.

We’ve been delivering government procurement automation including e-procurement portals and transparency for a few years. Many governments have initiated e-procurement portals – but without direct integration to back office procurement and commitment accounting systems. I think that this integration is critical to reducing corruption because it eliminates a point where data can be “treated” manually. It also improves efficiency and ensures that the procurement opportunity was posted only after meeting all fiscal discipline rules. (It’s not unusual to hear about the disconnection between systems so that Ministries of Finance are caught unawares of budget arrears.)

I wrote about performance procurement last year and the need to integrate front and back office processes. Yes, open contracting is an important step towards government value for money. But, tight integration with back-office systems will provide significant improvements in procurement performance.

Procurement: the next horizon for transparency

ICGFM DC Forum Wednesday January 9th on open contracting. Presentation by Marcela Rozo from the World Bank

Storified by · Wed, Jan 09 2013 10:28:27

We’re tweeting from @icgfm #DCForum: #procurement, the Next Horizon in #transparency, Marcela Rozo from@WorldBank, @thegradschool sponsorFreeBalance
.@opencontracting is the subject of the #DCForumFreeBalance
David Simpson @thegradschool introduces Marcela Rozo #DCForum
There is significant value that can be achieved through more effective procurement. Transparency can lead to improved effectiveness,
Marcela Rozo #DCForum: Poor performance in $9.5T in global public #procurement, even 1% improvement is materialFreeBalance
#DCForum value of #procurement #transparency
Marcela Rozo #DCForum: open contracting, #opengov benefits everyone #transparencyFreeBalance
Marcela Rozo #DCForum: lots of effort on #budget #transparency & outcomes but not so much on public #procurementFreeBalance
Marcela Rozo #DCForum: open contracting means #transparency across the entire acquisition cycle such as changes to terms, contract winnersFreeBalance
Marcela Rozo #DCForum: focus on open contracting on extractive industries, infrastructure investment & #PPPsFreeBalance
Open contracting initiative builds on existing transparency standards and is building a group of partners.
Marcela Rozo #DCForum: open contracting group looking for more partners to help set global principles, tech standardsFreeBalance
Marcela Rozo #DCForum: open contracting tech standards intended to integrate with #IATI #transparency #aideffectivenessFreeBalance
Marcela Rozo #DCForum: open contracting initiative building on #ogp, #eiti & open construction initiativesFreeBalance
Marcela Rozo #DCForum: World Bank working with GIZ, CoST, TI, Philippines, Integrity Action & Oxfam for open contracting #transparencyFreeBalance
Open contracting is part of broader #transparency movement #IATI #OGP #cost #eiti
Marcela Rozo #DCForum: numerous points of engagement with open contracting movement, join the global movement!FreeBalance
Social media can help improve procurement effectiveness by sharing and analyzing open data.
Marcela Rozo #DCForum: #SocialMedia #sm can increase the discussion about #procurement performance beyond #corruptionFreeBalance
Marcela Rozo #DCForum: big media more interested in #procurement #corruption not on improvements in effectivenessFreeBalance

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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