B2B Payments

Why Procurement Reform Is Necessary For Agencies Of All Sizes

Starting this month and running through November, the World Bank is launching global consultations on its proposed reforms for the national procurement of goods and services. The potential reforms are for projects funded by the World Bank and, so far, the response has been largely positive. But does the World Bank really need a better procurement process? And if so, what changes will the proposed measures allegedly bring?

With the rise of the internet, and organizations across the world making a push to “go digital,” the entire procurement process is repeatedly changing. The World Bank hopes to keep it as simple as possible and recently announced suggestions to reform the standard practice for obtaining goods and services.

World Bank executive directors have signed off on the new initiatives, according to a statement posted on the World Bank website. A main pain point that the World Bank hopes to ease is decision-making based on value for money. Additionally, the World Bank explained that it will take into account pre-defined non-price attributes when considering bids. This could include quality criteria, in addition to the price, the organization said.

The idea is to make World Bank procurement “fit for the future,” said World Bank Chief Procurement Officer Christopher Browne. The new framework highlights an approach for sustainable procurement, how to use procurement systems other than World Bank’s and how to have good engagement with strategic suppliers.

Moreover, the new procurement process will outline a streamlined and more efficient approach to procurement complaints that will be centrally monitored and tracked.

Procurement policies are being reviewed because the World Bank wants to be properly equipped to respond to client needs, said World Bank Director for Operations Risk Management Stefan Koeberle. Additionally, the financial institution wants to ensure that World Bank funds are used for their intended purposes and with the highest integrity, Koeberle said.

"We want procurement in bank operations to support clients to achieve value for money with integrity in delivering sustainable development," said World Bank Vice President of Operations Policy and Country Services Kyle Peters.

Previous procurement success

The World Bank is no stranger to procurement success. Last month, procurement reforms supported by the World Bank that were started two years ago in Bangladesh, had a strong start. Specifically, online bid invitations by government agencies went up by a staggering 571 times since 2012, according to The Daily Star.

In that instance, change was designed for four stat-run agencies, the Daily Star reported. They were the Roads and Highways Department, the Local Government Engineering Department, the Bangladesh Rural Electrification Board and the Bangladesh Water Development Board. Combined, those agencies account for a major portion of government procurement and have also rolled out online procurement performance monitoring.

Moreover, the number of electronic bid invitations for public procurement increased to more than 8,000 in May 2014 from only 14 in June 2012, the World Bank said, according to the Daily Star. Also, the number of registered bidders for the electronic government procurement (e-GP) grew by 30 times to 8,900 in May 2014 from only 294 in June 2012.

Procurement for all

No matter the size or global reach of an organization, a strong procurement process is essential. On July 24, PYMNTS.com reported on New York officials working to create plans for a set of IT contracts that could change the way state and local governments purchase their technology goods and services.

Whether it’s one state in America or one world-renowned organization working for various countries, a streamlined way to procure goods and services is critical. Everyone wants to save money, and with the right process in place, it’s definitely possible.



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