UNCITRAL United Nations Commission on International Trade Law EIGHTH REGIONAL PUBLIC PROCUREMENT FORUM TIRANA, ALBANIA, MAY , 2012 E-procurement: Developing a Legal Framework that Maximizes its Advantages Caroline Nicholas UNCITRAL April 2012

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages Background: 1994 (first Model Law, GPA): EDI in its infancy Today: some systems entirely electronic EU 50% e-procurement (goal) A big deal: procurement = 10-20% GDP Online trade worldwide $12.8 trillion (2006, Forrester) What is its potential?

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages “[e-procurement] is emerging worldwide with the potential to reform processes, improve market access, and promote integrity in public procurement” (Schapper, 2008) Is e-procurement living up to these expectations?

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages Key policy goals in introducing e-procurement (1) better Transparency Participation and competition Objectivity and accountability Efficiency Potential for better value for money

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages Key Policy goals in introducing e- procurement : (2) better Oversight (external and internal) Measurement of performance/results Identification of risk areas (red flags) Potential for enhanced accountability and integrity – longer-term goal

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages UNCITRAL Model Law e-procurement tools: e-advertising e-communications e-reverse auctions Framework agreements e-tenders e-signatures e-records

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages Policy approach of UNCITRAL Encourage e-procurement –Where appropriate (infrastructure) –Safeguards and public confidence Main policy issues –Staged implementation and where to start –Don’t over-regulate –Business models –International market access –Treat as a reform issue, not a technology issue

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages Staged implementation and where to start Simple tools –E-advertising, e-communications –Uploading and downloading documents –Communications during the procurement process Second-stage tools –E-reverse auctions –Framework agreements

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages Simple tools – e-advertising and e- communications Legal standards for e-communications, e-advertising, e-tendering, meetings Public confidence and safeguards – authenticity, integrity, confidentiality –Safeguarding market access Functional equivalence/Technological neutrality –i.e. put all communications on a par –Don’t describe technology

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages Second-stage tools: e-reverse auctions (e- catalogues, framework agreements) Competitive market –Common/simple procurement –Goods, construction and services –Price-only procurement Strict transparency rules Overheads for both parties in early stages Refinements: quality criteria, auctions as a phase

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages Don’t over-regulate Avoid higher standards for e-procurement –e-signatures UNCITRAL does not require advanced signatures EU recommends them –e-tendering requirements Equivalent to previous requirements for paper tenders MDBs e-tendering requirements

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages Business model Proprietary systems/specialist software –Restrict access? Charges Outsourcing –Organisational conflicts of interest

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages Longer-term goals: e-procurement as reform issue Redesigning the procurement system –Integrated from planning to payment and evaluation Not a technological issue alone Costs of investment in new system System to fit needs –Select your tools –Staged approach

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages Longer-term goals: e-procurement as reform issue Enhancing value for money –“Toolbox” approach to procurement –Involves discretionary decisions –Guidance and oversight – ensuring objectivity –E-records

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages Longer-term goals: e-procurement as reform issue Enhancing efficiency –Reduced transaction costs and times –Standardisation of purchases –Better management information –Better processes –Better supplier knowledge

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages Longer-term goals: e-procurement as reform issue Enhancing governance –Removal of human interaction –“Internal” transparency Enhancing accountability Traceability –E-records - monitoring trends, red flags

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages Conclusions UNCITRAL has a facilitative approach to e- procurement With safeguards Recognises the value of process reform when implementing e-procurement

UNCITRAL United Nations Commission on International Trade Law E-procurement: Developing a Legal Framework that Maximizes its Advantages For more information Website: – groups/1Procurement.html – roups/1Procurement.html Contact: THANK YOU