Seven procurement principles

From the August 2019 print edition

In the world of public procurement, there is little left that is truly local. While a public institution may operate within a specific sector of a specific jurisdiction, its procurement operating system is typically

Paul Emanuelli is the general council of the Procurement Law office. Paul can be reached at [email protected]

. This article summarizes these global standards and recommends a rapid action plan for complying with these standards at the local level.

Ongoing developments in the procurement field have put us under an unprecedented level of scrutiny and an unprecedented volume of compliance requirements. The ever-expanding and overlapping body of red tape flowing out of public inquiries, public commissions, task forces, auditor general reports, domestic and international trade treaties, statutes, regulations, government directives and best practice guidelines must be untangled and reconciled against a relentless tide of case law that is washing over every aspect of the tendering cycle and reshaping the purchasing landscape.

The common global standards that apply to government procurement can be summarized in the following seven governing principles that apply in all rules-based jurisdictions to regulate the award of government contracts:

  1. Open Competition: Unless a contract falls into a recognized exception, each contract award valued over prescribed thresholds must be awarded pursuant to an open and fair competitive bidding process.
  2. Transparent Requirements and Criteria: Each solicitation must contain clear information regarding the requirements of the tendered contract, along with the evaluation criteria and process rules under which that contract will be awarded.
  3. Neutral Requirements: Public institutions must avoid using biased or unnecessarily restrictive requirements, evaluation criteria, or process rules when running a competitive bidding process.
  4. Fair and Transparent Evaluations: Bid evaluations must be conducted by neutral and independent evaluators in a manner consistent with the pre-established evaluation criteria and procedures. Those procedures must include a thorough record-keeping of the evaluation process.
  5. Fair and Transparent Awards: Subject to narrow exceptions, contracts should be awarded: (i) to the supplier whose submission ranks the highest based on the prescribed evaluation criteria and procedures set out in the solicitation document; and (ii) with a scope consistent with the contract opportunity initially scoped in the bid solicitation.
  6. Bid Protest Mechanisms: The competitive bidding process must provide all bidders with the opportunity for a post-award debriefing and must also include bid protest mechanisms that enable bidders to legally challenge the bidding process.
  7. Performance and Debarment: Contracts should include performance-tracking mechanisms to monitor contract performance. Institutions should establish procedures to sanction recurring poor performance, as well as other bidding infractions and misconduct, through fair and consistent debarment protocols.

These seven governing principles represent the common core global standards that apply to public procurement across all rule-of-law jurisdictions irrespective of the specific source from which these rules are derived in the local context.

While these standards often originate from external sources, at the end of the day, each public institution remains accountable for its own spending. Senior decision-makers within our public institutions need to allocate greater portions of their departmental spending towards updating their central procurement systems and enhancing training programs for their procurement staff.

For strategic execution to deliver projects with speed and precision, public organizations must implement a rapid action plan by redesigning, rebuilding and rebooting their procurement governance systems. This calls for an assessment of existing conditions within the organization, followed by implementing a procurement-centric process improvement strategy, and culminates in the deployment of a rebooted operating system supported by training programs and smart procurement technologies.

These programs should include training on the proper drafting of contract specifications and bid evaluation criteria, on using tendering formats that help avoid legal risks, on properly documenting group evaluations and bidder debriefings, and on properly conducting contract negotiations and managing awarded contracts. Finally, public institutions should also train staff on how to properly handle bid disputes under open tendering rules before they escalate into formal bid protest proceedings.

Without an effective strategy for addressing these regulatory requirements, a procurement operation can quickly find itself stretched to the breaking point by the competing tensions of meeting standards while meeting deadlines. Yet, as experience has shown, institutions can fulfill these twin objectives through the deployment of a three-stage strategy that assesses current conditions, integrates a proper, professionally designed governance framework, and implements an effective institutional deployment and training program.

This article is extracted from Paul Emanuelli’s new book The Art of Tendering: A Global Due Diligence Guide.