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Procurement Performance MeasurementThe Example of Croatia
Ivančica Franjković, State Office for Central Public Procurement Ivan Palčić, Ministry of Economy
10TH PUBLIC PROCUREMENT KNOWLEDGE EXCHANGE PLATFORM
ISTANBUL – TURKEY – MAY 2014
Levels for Measuring Performance
• There are 3 levels for measuring performance within the public procurement system
• Performance may be related to: • National level – which considers the overall system of
public procurement• Contracting authority level • Contract management level
2
Legal Framework of PP in HR
• PP Act (OG 90/11, 83/13, 143/13, 13/14 ) + subordinate legislation
• Act on the State Commission for Supervision over Public Procurement Procedure (OG 18/13, 127/13)
• Act on PPP (OG 78/12)
• Concessions Act (OG 143/13)3
Institutional Framework of PP in HR
• Ministry of Economy – DG for the PP System• State Commission for Supervision over PP
Procedure• Agency for Public Private Partnership
• Ministry of Finance• State Office for Central PP
4
PP Act
• PP plans – CA must publish them on their website (Art. 18.4)
• Notices – published in Electronic Public Procurement Classifieds of the Republic of Croatia (Art. 56.1)
• Tender documents – in open procedure also published in EPPC
• Decisions of SC – published on their website (Art. 171.4)
• PP contract register – CA/CE must publish them on their website (Art. 21.)
• Execution – CA/CE must control the execution of the PP contract (Art. 105.3)
• Links to PP plans & contract registers – MoE-DG PP publishes them on PP Portal (Art. 18.6, 21.6)
• PP statistics – MoE-DG PP publishes it on PP Portal (Art. 181)5
MoE – DG for the PP System
• Issues opinions and instructions – Call centre every TUES/THURS (9-12h)– Open doors every last FRI in a month
• Controls the implementation of PP law and initiates misdemeanour procedure before a court when necessary
• Collects, processes and analyses data on PP statistical reports
• Prepares draft proposals of laws and other regulations on PP
• Cooperates with other state bodies & EU institutions
• Responsible for the development, improvement and coordination of the entire PP system in HR
6
Statistics: Opinions & Instructions
7
2011 2012 2013 20140
1000
2000
3000
4000
5000
6000
448 518 467
143
3244
4774
4121
942
34 61 57 12
3726
5353
4645
1097
Opinions Emails Other TOTAL
Statistics: Implementation Control
8
2011 2012 20130
20
40
60
80
100
120
0 2
35
18 1721
16
25
14
43
50
37
2326
20
77
95107
Still in progress Dismissed No irregularities Irregularities Misdemeanours Received
Statistics: PP in HR
9
2007 2008 2009 2010 2011 2012 Jan-Jun 20130 kn
5,000,000,000 kn
10,000,000,000 kn
15,000,000,000 kn
20,000,000,000 kn
25,000,000,000 kn
30,000,000,000 kn
35,000,000,000 kn
40,000,000,000 kn
45,000,000,000 kn
50,000,000,000 kn
GoodsServicesWorksBelow HR ThresholdsTOTAL
2008 2009 2010 2011 2012 Jan-Jun 20130
5000
10000
15000
20000
25000
30000
406
392 177 148 119
60
MEATNo of Contracts
Useful links for those who want more…
• PP Portal – http://www.javnanabava.hr/
• State Commission – http://www.dkom.hr/
• EPPC – https://eojn.nn.hr/Oglasnik/
• SOCPP – http://www.sredisnjanabava.hr/
• Agency for PPP – http://www.ajpp.hr/
• MoF – http://www.mfin.hr/ 10
Legal basis for measuring performanceon CA and contract level
Main tasks defined by Regulation on CPB:• planning the implementation of procurement procedure;• establishing procurement requirements for products and services;• coordinating the activities among the clients; market research;• implementing procurement procedures; contracting; • setting up and managing the database of awarded contracts and
framework agreements;• analysing the efficiency of central procurement through continuous
monitoring of savings made;• monitoring the execution of contracts and framework agreements;• drawing up proposals of decisions, specifying products and services
purchased through central procurement.11
Performance measurement on CA level
„implementing procurement procedures”• Measuring of the procurement volume
– The purchase data is accumulated for each FA – both from clients and suppliers (obliged by FA to deliver reports)
– useful information for planing future tenders
• Measuring the Quality of the Procurement Procedures– The average period for planning and preparation should not exceed X
days;– Competitive procedures, such as the open and restricted procedures,
should be used in no less than X% of the total number of procedures
12
Performance measurement on CA level
„analysing the efficiency of central procurement through continuous monitoring of savings made”• Measuring the Economic Efficiency – based on comparison of
prices achieved and– prices paid by other authorities – prices of “older” contracts, – average market prices –the most common baseline price.
• Increased purchase volume increased savings• Savings per Contract – based on realization, not estimation after
conclusion of the FA• Estimation based on unit price (basket of the products)
13
• Unit price analysis
– Example of price comparisons of office supplies – for 5 most sold items– The savings between different individual products tested were: 8%
(toner cartridges), 19% plastic folder, 29% copy paper, 33% ballpoint pen and 37% stapler.
– If the average savings across all the products within the office supplies is assumed to be 25%, the price savings from these purchases might be calculated in the same way, based on the purchasing value of the central framework agreement for this category.
14
Example of savings based on price
Performance measurement on CA level
„analysing the efficiency of central procurement through continuous monitoring of savings made”
• Measuring the Economic Efficiency – based on processes– Savings apart from price differences – Indirect costs, transaction costs
15
Performance measurement on CA level
„coordinating the activities among the clients”
• Measuring the Standard of External and Internal Relations and Collaboration– An annual Supplier Satisfaction Survey
• to ensure that the majority of suppliers are satisfied with the collaboration with the contracting authority.
– An annual Internal Customer Survey • to ensure that the majority of internal clients are satisfied with the services of the
procurement organisation.
16
Examples of some Procurement indicators
1. Turnover of CPB/estimated overall expenditure in relevant categories
2. Overall yearly cost vs managed expenditure• For example :overall yearly cost of the CPB in 2013: 5.mil HRKProcurement value in 2013: 500 mil HRK
17
Examples of indicators – unsuccessful procedures
18
Number of unsuccessful procurement procedures
(for the CPB)
Total number of
notices issued by the
CPB
% of number of unsuccessful
procurement procedures for
CPB
Value of unsuccessful procurement procedures
(for the CPB)
Total value (euro) of notices
issued by the CPB
% of value of unsuccessful procurement procedures
for CPB
Total % of unsuccessful procurement processes for the CPB (by any reason: litigations, no bids received, non-compliant bids, cancellation, …)
% of unsuccessful procurement processes for litigation
% of unsuccessful procurement processes for no bids received
% of unsuccessful procurement processes for non-compliant bids
% of unsuccessful procurement processes for cancellation
% of unsuccessful procurement processes for other reasons
