An analytical framework for the management and reform of public procurement

Pages1-26
Published date01 March 2006
Date01 March 2006
DOIhttps://doi.org/10.1108/JOPP-06-01-02-2006-B001
AuthorPaul R. Schapper,João N. Veiga Malta,Diane L. Gilbert
Subject MatterPublic policy & environmental management,Politics,Public adminstration & management,Government,Economics,Public Finance/economics,Texation/public revenue
JOURNAL OF PUBLIC PROCUREMENT, VOLUME 6, ISSUES 1 & 3, 1-26 2006
AN ANALYTICAL FRAMEWORK FOR THE MANAGEMENT
AND REFORM OF PUBLIC PROCUREMENT
Paul R. Schapper, João N. Veiga Malta and Diane L. Gilbert*
ABSTRACT. Public procurement frameworks in developed and developing
countries alike are recognised as being characterised by an unstable tension
between the public expectations of transparency and accountability, and of
efficiency and effectiveness of resource management. This conformance -
performance tension, manifest throughout a complex procurement environment,
is further destabilised by conflicting stakeholder interests at the political,
business, community and management levels and exacerbated by competing
claims between executives, lawyers, technologists and politicians for lead roles
in this arena. The application of new technology in this discipline offers a
qualified potential to substantially resolve these tensions. However, the
application of technology is itself at risk from a lack of understanding about the
nature of its impact and the wider political dimensions of professionalism in
public procurement.
INTRODUCTION
The concepts of transparency and accountability are nowhere more
significant in public administration than in procurement, which may
account for more than a third of all of a government’s outlays. Yet while
these attributes are paramount as in regards to good governance, they do
not on their own distinguish procurement from many other activities of
public process. However, there are many other elements that combine to
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* Paul R. Schapper, PhD., is a Professorial Fellow, School of Business, Curtin
University of Technology, Australia. His research interest is in the applications
of technology to public sector governance. João N. Veiga Malta, BCom, is
Electronic Government Procurement (e-GP) Program Coordinator, Inter-
American Development Bank. His research interest is in public procurement
and electronic procurement. Diane L. Gilbert, --BSc, is Procurement
Consultant. Her research interest is in public sector reform and governance.
Copyright © 2006 by PrAcademics Press
2 SCHAPPER, VEIGA MALTA & GILBERT
make public procurement especially enigmatic, one of the least
understood and most vulnerable areas of public administration.
Public procurement is inherently a politically sensitive activity, not
least because it involves significant amounts of public money even
within the context of a national economy. Pegnato (2003) estimated the
US federal procurement figure at around US$200 billion per annum;
while Coggburn (2003) put the combined level for state and local
governments at more than US$1 trillion. Thai and Grimm (2000)
estimated government’s collective purchasing at around 20% of GDP
while, for developing countries, Nicol (2003) put the figure at 15% of
GDP. For Russia, federal procurement in 2004 was expected to amount
to about 40% of the country’s budget (Fradkov, 2004). The Organisation
for Economic Co-Operation and Development (OECD) Development
Assistance Committee (DAC) (2003) estimated the volume of global
public sector procurement at 8% (US$3.2 trillion) of the worldwide GDP
of US$40 trillion. Aspirations to de-politicise public procurement face
major hurdles: decisions about its appropriation can involve financial
hardships and job losses for various regional or sectional constituencies,
thereby inviting intense political interest. Further, even just a few low
value performance failures can, it seems, be of greater political
significance than pandemic inefficiency (Dilulio, 1994; Osborne &
Gaebler, 1992).
Compounding the issues implied by its overtly political and business
dimensions are widespread misunderstandings and even gross ignorance
within the executive structures of governments as to what procurement
actually entails (Coggburn, 2003; OECD/DAC, 2003). There is often
little understanding of what skills are required and what risks are implied
as well as what opportunities may be available (e.g. GAO, 2000).
Failure of awareness and expertise at this level commonly represents a
real risk to good governance, even creating the anomaly whereby public
procurement may sometimes be characterised as transparent while not
accountable (e.g. see Isaac [1997] on the Cave Creek disaster).
The significance of public procurement reform for developing
countries is increasingly being appreciated by development agencies
globally, recognising that the social and economic costs (Schapper &
Malta, 2004) of the weaknesses in public procurement governance are
compounded by increases in sovereign risk that this represents for
foreign investment (Jones, 2002). However, even amongst the reformists

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