4 key strategies for making public spending count: Part 3

This post is written by Sophie Abache, Digital Strategist and Content Manager at Open Contracting Partnership.

• The problem: Public procurement is not always designed to be focused on the community’s needs or to deliver the best value for money.

• Why it matters: The often limited government resources can be distributed more equitably when they’re procured based on actual need vs perception.

• The solution: Continuous stakeholder engagement and oversight for meaningful oversight and accountability across the procurement process.

Our world runs on public contracts. Whether it’s about better schools, fixing roads, buying protective equipment or delivering healthcare services, we need to make public spending count to create sustainable and equitable societies. But governments have struggled with antiquated procurement processes, poor coordination, and a lack of up-to-date and easy-to-access data on their procurement.

So how do you put in place a transparent, fair, inclusive, and results-driven public procurement system? The new Open Contracting Quickstart Guide pulls from our experience supporting more than 50 governments – from city agencies to federal governments – in implementing effective and efficient public procurement reforms.

In this four-part blog series, we highlight some of the strategies for how reformers can get up and running with open contracting – from the big fixes to the quick fixes. From setting goals, publishing data, engaging with stakeholders, and measuring success, we will share key strategies, tools and resources, and inspiring examples of open contracting efforts from around the globe. In the previous article, we looked at public procurement data and some of the strategies to make best use of it for 21st-century reforms. In this third part, we will look at practical strategies for improving stakeholder engagement from pre-market consultations to establishing complaints and oversight mechanisms.

Strategy 3. Improve stakeholder engagement and oversight.

Imagine you are responsible for improving the taste of cakes in a bakery. You’ll look at the numbers of which bakes have been selling best and whether, for example, parents are interested in the same chocolate chip-flavoured cupcakes with rainbow sprinkles as their kids. You will also want to ask people what they might be missing when they are buying cupcakes and you might identify where other bakeries are getting good ingredients at better prices. Some of these insights apply to public procurement too. Now that you have set your reform goals, secured stakeholder buy-in, and are publishing and using public contracting data to monitor spending and make better decisions, how do you ensure that you stay on track and deliver goods and public services for citizens? By putting in place mechanisms that enable continuous stakeholder engagement and oversight.

"Public procurement should deliver the best value for money to many and citizens as the beneficiaries are the ones that best know what they need."

Engagement is at the core of the open contracting model. Deepening engagement and enabling the participation of stakeholders including potential suppliers and business associations, as well as citizens and civil society, can help you build on the knowledge of industry experts, work with more reliable vendors, and leverage the support of local communities. It also enables meaningful oversight and accountability across the procurement process. Efficiently applying the following strategies will result in a feedback loop between the government, suppliers, civil society and other actors that will ensure everyone is involved and mutually accountable.

Engage vendors in pre-market consultations: Governments often avoid engaging vendors because it can be perceived as collusion but it’s possible to communicate with them in a fair, open, and legal way. Vendors are uniquely positioned to provide information about what the market can offer to meet citizens’ needs. Engaging vendors before issuing a Request for Proposal (RFP) can help governments understand the realities of the market and write RFPs that vendors will respond to. This engagement also gives new suppliers advance notice to prepare their bids and compete with established suppliers. Mexico City prioritised vendor engagement early on in the procurement process for their bike-share system by sharing data via a dedicated website, openly sharing vendor questions and answers, and issuing a Request for Information (RFI).

You can ask for feedback through vendor conferences, phone calls, surveys, or focus group discussions. Despite the limitations of the COVID-19 pandemic, we saw some governments engaging with vendors and small and medium enterprises (SMEs). The city of Buenos Aires, for example, surveyed SMEs to understand the impact of the pandemic and used the insights to match businesses to the right services, as well as increase their participation in the city’s tenders. Read this publication for more tips and guidance.

Get feedback on specific contracting processes or stages: Incorporating stakeholders’ feedback at different stages of the procurement cycle—from planning to tendering, awarding the contract, and implementation—is key to unlocking better value and outcomes from public contracts. Embedding feedback specifically from the community and civil society helps close information gaps and reduce monitoring costs. An example of this strategy in action is Paraguay where students from Ciudad del Este are monitoring how royalties from a hydroelectric dam are being allocated to schools in their region. They used open contracting data and collective action to help neglected schools chase funding for crucial repairs, leading to a dramatically fairer distribution of funds for school facilities. In 2017, 80% of the neediest schools received funding, compared to less than 20% in 2015. In 2021, the students collaborated with the country’s procurement agency to develop a public portal for tracking public investment in school infrastructure.

Embed monitoring across the entire procurement system: Public procurement should deliver the best value for money to many and citizens as the beneficiaries are the ones that best know what they need. Provide them access to open contracting data to independently conduct analysis. This empowers citizens to review whether goods and services arrive, if the estimated value of the contract is fair, and if the contract was implemented well. With support and training, data-driven monitoring by end-users can add huge value to tracking and delivering public contracts.

In Ukraine, citizens and businesses can report violations or good practices across the procurement cycle through the online platform Dozorro that is linked to the government e-procurement platform. Civil society organisations can also use risk indicators, business intelligence, and other monitoring tools to target their monitoring on the greatest risk areas. Chile’s capital city, Santiago, included local community boards to evaluate service delivery from urban sanitation contractors. You can start with our tips on monitoring in a digital world.

Establish complaints and oversight mechanisms: In Georgia, any individual interested in participating in a procurement process can file online complaints if there has been a violation of the law. A complaint can put a tender on hold for up to ten days until a dispute review board has discussed the complaint and decided how to proceed. All complaints and decisions are published online.

For citizen monitoring to lead to actual impact, you must have a mechanism in place for corrective action. Design a monitoring and complaints mechanism for civil servants, unsuccessful bidders, and citizens to lift up concerns and have them addressed.

Establishing an efficient and effective consultation monitoring and complaints mechanism might require changes to legislation. Explore our legislative guide for insights and guidance on how countries have cemented open contracting approaches into their legislation.

Reforming public procurement systems at any level of government requires a lot of work. The good news is that you do not have to do it all alone. Allow stakeholders to help you produce RFPs and tenders that are tailored to your unique context, get them on the table at the different stages of your procurement cycle for better value and outcomes from the contracts, make monitoring simple, show them that they can trust you by incorporating their feedback, and empower them with data, tools, skills and your support.

In the final part of this series, we will explore practical strategies for measuring, adapting, and institutionalising public procurement reforms.

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