Implementing the Recommendation in Complex Environments
Public procurement can be particulary challenging in complex environments, such as major events & infrastructures or specific sectors. Some specific tools can be used to face the particular challenges of these high impact areas.
Why is public procurement challenging in complex environments?
Because these complex environments:
- Are prone to corruption risks, because of the magnitude of the projects or the amount of government spending related to specific sectors
- Often lack competition, such as the energy and the health sectors for instance
- Often have inadequate cost recovery, such as infrastructure projects for example
- Often witness important variation in prices, in particular in the health sector
These risks can have important impacts: economic impacts and impacts on government image and trust.
What can be done?
The principles of the OECD Recommendation on Public Procurement need to be implemented in complex environments, with a specific focus on:
- The promotion of a culture of efficiency and integrity
- The creation of skilled and mature organisation and procurement workforce
- The development of comprehensive project risk maps
The promotion of strategic oversight and coordinated governance models.
Related Tools
- Checklist for a periodic assessment of a procurement strategy in infrastructure projects
- Different types of infrastructure delivery models (adapted from countries)
- High-Level Principles for integrity, transparency and effective control of major events and related infrastructures (2016)
Country Cases
Public Procurement in Major Events
- The EXPO MILANO ex ante control mechanism in Italy (also refer to the High-Level Principles for integrity, transparency and effective control of major events and related infrastructures)
Public Procurement in Large Infrastructure Projects
- Allocation of risks during the construction of Heathrow Airport Terminal 5 (UK)
- Controversies around the development of the Berlin-Brandenburg International Airport, BBI
- Four-eyes principle used in the Tappan Zee Bridge Project, New York State (USA)
- Governance failures in the management of the Berlin-Brandenburg International Airport
- Integrity monitor, Tappan Zee Bridge Project, New York State
- International competition in infrastructure projects in Australia
- Multi-level co-ordination in the development of Milan-Malpensa Airport
- Positive work culture in the construction of Heathrow Airport Terminal 5 (UK)
- Stakeholder engagement during the construction of Heathrow Airport Terminal 5
- The Construction Industry Ethics and Compliance Initiative in the United States
- The Project Initiation Routemap in the United Kingdom
- The UK infrastructure procurement routemap
- Tappan Zee Bridge video camera monitoring
Reviews
Public Procurement in Large Infrastructure Projects
Public Procurement in the Health Sector
What has the OECD done to support members?
In order to support OECD countries and beyond in the implementation of infrastructure projects and major public events, the OECD (and Italy) developed High-Level Principles for integrity, transparency and effective control of major events and related infrastructures (2016).
The OECD is also supporting countries in the management of complex public procurement processes related to Major events, Major infrastructure, and complex sectors such as Energy and Health.
The EXPO Milan 2015 in Italy
In order to tackle several corruption cases, the Italian National Anti-Corruption Authority (ANAC) developed, together with the OECD, a project to foster transparency and integrity in the tender procedures linked to the EXPO Milan. The project involved the development of a ‘collaborative supervision and control’ model, including the creation of a special operating unit (UOS), ex-ante controls of procurement procedures, and other innovative supervision methodologies, all developed in accordance with international best practice.
The New International Airport of Mexico City (NAICM)
Given that the implementation of large infrastructure projects requires a careful execution due to the high complexity, time constraints and multiple stakeholders involved in the project, the Airport Group of Mexico City (GACM) developed, together with the OECD, an action plan to ensure high standards of transparency, accountability and integrity in the execution of the NAICM. In case of the NAICM, which is planned to be operational in 2020, it was recommended to adopt a corporate governance structure, foster an open and extensive dialogue with all stakeholders, install permanent coordination between various agencies involved in the project, tailor the communication and require high integrity standards for all stakeholders.
The state-owned company Petroleos Mexicanos (PEMEX)
At the request of the company Petroleos Mexicanos (PEMEX), OECD undertook an intensive review of the company in 2015-2016. The review was carried out shortly after PEMEX went through major regulatory changes which resulted in PEMEX being granted autonomy for its administration, organisation, management, and budget, as well as a new corporate structure. The Energy Reform that started in 2013 changed the organisation of PEMEX. While PEMEX was going through this transitional period OECD reviewed the governance infrastructure of the procurement function, the internal mechanism for risk management and accountability and how the company was ensuring efficient supplier’s relationship through e-tools, negotiations, clarification meetings etc. The current situation was then assessed and compared to OECD Recommendations and guidelines.
The ISSSTE in Mexico (Social Services)
The OECD has been working with Mexican health institutions to improve their procurement processes for many years. In 2013, it presented the first procurement review of the State’s Employees’ Social Security and Social Services Institute in Mexico (ISSSTE), which included recommendations on procurement procedures, human resources, integrity and transparency, among others. In 2015, the OECD developed a follow-up report that mainly addresses weaknesses on procurement planning and coordination, optimisation of market intelligence, and enhancing competition. This second report was presented and launched in January 2016.
OECD Reports
Other Initiatives
- CoST – the Infrastructure Transparency Initiative
- Managing Major Projects (UK’s National Audit Office series)