COVID-19 Effects on public procurement

Billions of people are being affected by the coronavirus pandemic, which set off an unprecedented global health crisis. Behind the fight to save lives, there is another crisis unfolding for governments who are scrambling to get life-saving health supplies to hospitals and keep society running as lockdown measures are being reinstated in many parts of  the world.

When essential items are scarce and time is of the essence, open and accountable procurement becomes an even more important safeguard. Some procurement practitioners have mooted and discussed about a number of promising approaches they are seeing and employing for keeping procurement fast, transparent and impactful.

Procurement, especially for urgently needed medical equipment, can be slow. Governments are dealing with outdated systems and lack clear information and data, which hinders their ability to be agile and save lives. It is a suppliers’ market, not a buyers’ market. There has been talk of widespread price gouging, an influx of counterfeit items, cases of intermediaries winning contracts and leaving governments in the lurch when they cannot fulfill the orders, and difficulties when competing for supplies against private companies who are not bound by the same bureaucratic procedures as the public sector.

Procurement specialists and practitioners need to think strategically about the whole supply chain and long-term production capacity, rather than concentrating solely on transactions. Even if authorities secure items, there are numerous hurdles to ensuring they reach hospitals and help patients. For example, in Pakistan: authorities were struggling to ensure first responders have the skills to operate ventilators and other medical equipment needed to treat COVID-19. And in Ukraine, more than 50,000 postal workers require(d) protective gear as they continue to deliver parcels and provide other essential services. But there is a lot of confusion over what kind of equipment is suitable for the different categories of staff.

A holistic approach is proposed for keeping attention on the wider value chain in the midst of an emergency, not only purchases, in their recommendations for reducing corruption risks in COVID-19 procurement.

These challenges notwithstanding, there are a number of solutions that could be employed to remedy the ongoing mischief.

  1. Policy

Extraordinary times call for extraordinary measures. Governments can use emergency decrees, laws and policies to establish clear rules for purchasing even as they re-engineer their supply chains and adapt to a market in which sellers have all the bargaining power.

  1. Coordination

Setting clear goals and priorities has been helpful for a number of countries so far. Plenty of governments are facing difficult moral trade-offs and having to make decisions at a very fast pace without much time to think, so they are having to change their mindset, focus less on price than they would usually, and more on timely delivery, and adequate quality and quantity.

  1. Data

Having access to open, complete and high-quality data can help to predict and manage supply chains. It is critical for monitoring the performance of response measures. It is also a key solution to face the crisis. Governments that are already publishing open data, should continue to do so and document their procurement.

  1. Supplier insights

It is hard in this situation to know where the needed items are, how much they cost, and whether those suppliers have worked with the government before. Having supplier search tools that are powered by open data, like Slovakia’s Tenderio, Ukraine’s business intelligence platform, CoProcure or the GovShop in the USA are really helpful. The idea is to help buyers struggling to find suitable suppliers when their usual vendors are unavailable.

  1. Civic monitoring

Oversight from the public is more important than ever. Civil society organizations should use data to monitor how governments are responding to the crisis.

In India for example, the research organization CivicDataLab – which co-created Open Budgets India (OBI) – is building a COVID-19 Health Infrastructure Watch to monitor, analyze and predict the government’s spending and procurements on health infrastructure to combat the spread of COVID-19.

Response and recovery

Once the emergency subsides, procurement will continue to play an important role in the post-crisis recovery. When we want to revive the small business sector, when we go to build more infrastructure and help economies to restart again, contracting and open contracting will remain critical. There is need to work towards helping countries to put together a post-crisis recovery packet that embeds integrity and transparency.

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