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Using country procurement systems in China and Vietnam to improve efficiency, transparency and competition

Ba Liu Nguyen's picture
Chongqing, China. Photo: Li Wenyong / World Bank

Procurement is an essential aspect of World Bank operations and international development projects worldwide. The World Bank’s policy on procurement encourages the use of country systems in procurement implementation process while ensuring the consistency with the Bank’s regulations . 

Making procurement information publicly available promotes openness and transparency and creates a level playing field for bidders. This, in turn, fosters competition and potentially decreases corruption risks. 

With this in mind, World Bank teams in East Asia and the Pacific successfully collaborated with government procurement agencies to increase and improve the publication of procurement information and to pilot e-procurement portals for Bank-funded operations. 

The following story shares our experiences and successes in both China and Vietnam. 

In China, thanks to the successful teamwork of the World Bank procurement team and China Tender Ltd., a web page dedicated to World Bank-financed operations was established on China Tender’s website, www.chinabidding.com.cn. This webpage, launched in July 2014 , publishes procurement notices in real time under the Tendering and Bidding Law of China and allows bidders free access to procurement information for Bank-financed projects.  whereas aA subscription fee was previously required. 

In Vietnam, procurement information was formerly published by the government's official procurement newspaper, Vietnam Public Procurement Review (VPPR) and managed by the Public Procurement Agency (PPA) of the Ministry of Planning and Investment (MPI). This format, however, did not satisfy the Bank's requirements for full disclosure. In May 2013, thanks to negotiations with the PPA, the Bank's team successfully made arrangements to enable publication according to the Bank’s requirements at a nominal fee. As a result, procurement information was made available via an official government publication, in a newspaper, and online.

Recently, both World Bank teams conducted an implementation review of the above initiatives. 

The team in Vietnam carried out an assessment of the Vietnam National e-procurement System (VNEPS), which has integrated VPPR as one element within its system. The assessment concluded that VNEPS, to a large extent, meets the World Bank’s requirements for transparency, competitiveness and fairness and is acceptable for use in World Bank-financed contracts using simple procurement methods.  As a result, from October 7, 2015 the Bank has recommended project implementation units (PIUs) to use VNEPS and to publish all notices on the system at a nominal cost of about USD15/notice, with the information also be published in one printed issue of VPPR without any additional cost .

Similarly, the team in China collected survey data that demonstrated that the Bank’s requirement that procurement notices and contract award information must be widely published has been strictly followed by the Program Management Offices and PIUs . The bidders responded that the published procurement notices provide adequate information, procedures for subscription to the website are simple, and it is freely accessible. 

In addition, the reviews have shown significant benefits of the governments’ new publication channels, including:  

  • Reduction of cost of doing business: The publication fee on Vietnam’s VPPR/VNEPS is about 10 times lower than the average commercial advertisement rate of the other nationally circulated newspapers. In China, shifting procurement notices to the website has shown to save 95% of the costs.
     
  • Improvement of procurement transparency and competition: Through the two procurement reforms, business opportunities were disseminated to wider audiences and precise target groups. These publication channels have become the most popular sources for procurement information, with easy and free accessibility (chinabidding.com.cn) and reasonable subscription/publication fees (VPPR/VNEPS). 

    This has promoted greater participation of bidders in Bank-financed contracts. In China, in the wastewater treatment sector, the average number of bidders purchasing bidding documents increased from 9.4 to 16 after the publication of notices on the website. As for Vietnam, out of 109 enterprises responding to the survey, 97 (89%) indicated UNDB online and VPPR as the most popular sources for searching business opportunities and affirmed it’s easy to access. Furthermore, 83 companies (76%) responded that the published procurement notices provided adequate information. 
     
  • Positive influence on Vietnam’s Official Development Assistance project portfolio: The initiative in Vietnam supports the improvement of the publication process for other development partners’ projects. Increasingly, VPPR and VNEPS have experienced the full publication of procurement notices for Asian Development Bank- and Japan International Cooperation Agency-funded projects. 
     
  • Promoting e-procurement: Nine projects in the Bank’s portfolio in Vietnam have been selected to pilot e-procurement of shopping contracts on VNEPS. Hands-on training on use of the system, jointly organized by the WB and PPA, was conducted with the active participation of about 60 representatives from projects.  Following that, the first two e-RFQs (Request for Qualifications) for firms to submit their qualifications to be considered for a project, were successfully issued in late February 2016.
     
  • Environmental benefits: The streamlined publication on the Government’s online system/designated website reduces paper advertisements, thus promoting environmentally sustainable practices.  
In achieving these results, it is clear that the initiatives to disseminate procurement information on government’s own channels or government-designated procurement information channels in China and Vietnam helped to improve economy, efficiency, transparency and competition of not only the procurement under Bank-financed operations but also ODA portfolios and the countries’ public procurement systems overall. 

In the future, increased procurement competition, together with enhancements in transparency, will continue to save time and substantial cost to governments while helping to promote better development outcomes.

Comments

Submitted by Thang Toan Le on

Good writing and congratulations to Yuan and Liu Ba

Submitted by Guoping Yu on

Congratulations to Yuan and Liu Ba! This is a good practice for more use of the country system in the Bank financed projects.

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