PI-24. PROCUREMENT ABOUT THE INDICATOR
This indicator examines key aspects of procurement management. It focuses on transparency of arrangements, emphasis on open and competitive procedures, monitoring of procurement results, and access to appeal and redress arrangements. It contains the following four dimensions and uses the M2 (AV) method for aggregating dimension scores:
- Dimension 24.1. Procurement monitoring
- Dimension 24.2. Procurement methods
- Dimension 24.3. Public access to procurement information
- Dimension 24.4. Procurement complaints management
IMPACT ON BUDGET OUTCOMES
Significant public spending takes place through the public procurement system. A well-functioning procurement system ensures that money is used effectively in acquiring inputs for, and achieving value for money in, the delivery of programs and services by a government. The principles of a well-functioning system need to be stated in a well-defined and transparent legal framework that clearly establishes appropriate policy, procedures, accountability, and controls. The description of the legal framework for PFM is included in the PEFA report narrative in section 2.3. Key procurement principles include the use of transparency and competition as means to obtain fair and reasonable prices and overall value for money.
INDICATOR MEASUREMENT GUIDANCE
24:1. The scope of the indicator covers every procurement of goods, services, civil works, and major equipment investments, whether classified as recurrent or capital investment expenditure.
24:2. In decentralized procurement systems this indicator can be assessed using the five central
government units with the highest value of procurement commenced in the last completed
fiscal year. If data to identify the central government units with the highest value of procurement are not easily obtained by the assessors, then assessors should choose the central government units with the largest annual gross expenditure that perform a substantial value of procurements. Assessors may be guided by the government in identifying the most relevant central government units, but will make the final decision on which central government units to include in the assessment. The basis of choosing the central government units included in the assessment should be noted in the narrative discussion of this indicator. In other words, the data collection approach should be decided at the country level; assessors should consider issues such as sampling size, qualitative versus quantitative data, and cost- effectiveness. Details of the approach should be disclosed in the assessment report.
Dimension 24.1. Procurement monitoring
DIMENSION MEASUREMENT GUIDANCE
24.1:1. This dimension assesses the extent to which prudent monitoring and reporting systems are in place within government to ensure value for money and promote fiduciary integrity. Completeness refers to the information on contracts awarded. The accuracy and completeness of information can be assessed by reference to audit reports.
24.1:2. For this dimension, the expression ‘data are accurate and complete’ means ‘as identified’ by third party assurance, e.g., auditors, including SAIs, procurement directorate, firms, etc.
24.1:3. If there is a lack of external reports to evidence the accuracy and completeness of databases, assessors may rely on a sample as guided in paragraph
PEFA Handbook Volume 1: The PEFA Assessment Process – Planning, Managing and Using PEFA