ChileCompra: A public policy to enhance transparency and efficiency.

ChileCompra: A public policy to enhance transparency and efficiency

• The Public Marketplace in Chile

• Outcomes

• A Public Management Reform

• Key considerations for a successful

implementation

Agenda

The Public Marketplace in Chile

Procurement system overview

Supported by a web-based marketplace.

Procurement system overview

Contracting agencies are accountable for their procurement process

ChileCompra is agency responsible for operating and regulating the market

Stakeholders provide the check & balance structure

Market Place

Agents

Public Opinion

General Audit Office

Congress

Procurement Tribunal

SupremeAudit

Institution

PublicProcurement

Court

5.3 Bids Per Process

2,000,000 Visitors Per Month

15,000 Contracting Officers

900 Public Agencies

1,650,000 Purchase Orders500,000 Business

Opportunities

Transactions worth 3.5% of GDP

90,000 Businesses Placing Bids

2009 ChileCompra Performance

6.200 Mio USD

100% of all Agencies

4.8 in 2008

Chile Population: 16 million

Outcomes

2.5

2.9

2.8

2.7

2.73

Fiduciary Capacity Min MaxVery Low 0.00 1.00Moderately Low 1.01 2.00Satisfactory 2.01 2.75Optimum 2.76 3.00

CPAR IDB 2008OECD/DAC

In terms on Integrity

Suppliers’ Opinions: Transparency in the market place

• ¿Half Empty?

• ¿Half Full?

39,6%

21,1%

39,2%

Leaders’ Opinions: Transparency in the market place

Source: Feed Back

13%

17%70% Public Sector Trade Unions

Judicial PowerOpposition Political PartiesGovernment Political PartiesPublic Sector WorkersCongress and Members of ParliamentCitizensInternational Organizations

2009 savings up to USD 180 MM

HospitalFully Equipped

Cataract Surgery

Post DegreeScholarship

Computers forChildren

Police Cars

A Public Management Reform

PoliticsSolutions

Problems

2003: Window of Opportunity Kingdon

(1995)

Problem: “Regardless of the degree of development, public procurement is a risk area for corruption” (Thai, 2001).Politics: Transparency and corruption scandals in 2003.

1998 2000 2003 2004 2008

Solutions

ChileCompra was a project in a broader agenda aiming to reform the State.

ICT

Institutions

HHRR Estrategy

Participaction

Service

Transperency

State reform

a

Strategy

Participation

• Other examples:• Quality services for the citizens

• Improvement the planning and control

management

• Electronic Government

• Improve cooperation between privet and

public sector

• Decentralization of the State

• New Ministry of Energy and New Ministry

of Environment

• Political Support• The Ministry of Finance leads the Reform• No restriction on resources• “Sticks and carrots”• Objectives are steady, well-understood and shared by every

stakeholder• Officials are well-paid and have sound professional records.

Top-Down Implementation

Waissbluth, 2006, “La Reforma del Estado en Chile 1990-2005”

(The State Reform in Chile 1990-2005)

The Role of Leadership

Key considerations for a successful implementation

The relevance of data

BIBusiness Intelligence

CRMCustomer

Relationship Management

Customers

Threat: Small & Medium Enterprises perception of further market concentration

Participación por Ventas según Segmento de Empresas

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Economía Nacional Chilecompra 2006 Chilecompra 2007

Micro

Pequeña

Mediana

Grande

18%

Participación por Ventas según Segmento de Empresas

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Economía Nacional Chilecompra 2006 Chilecompra 2007

Micro

Pequeña

Mediana

Grande

24%18%

Participación por Ventas según Segmento de Empresas

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Economía Nacional Chilecompra 2006 Chilecompra 2007

Micro

Pequeña

Mediana

Grande

35%18% 24%

Source: Chilecompra

Response: Having more suppliers is a strategic goal

National Economy ChileCompra 2006 ChileCompra 2007

Transactions by Company Size

MicroSmallMediumBig

Threat: Resistance to change

Improve contracting officers capabilities

Response

Operations

Private Operators ChileCompra Multiple contracts + SLAs

Policy

Regulation

Training

Software

Operations

Data Center

Contact Center

Complementary Software

Payments are no longer based on transactions, but rather on fees.

Initial Investment in SW: USD 2 MM

ChileCompra’s budget: USD 11 MM

• Goods and services: USD 6 MM

• Data center : USD 2,8 MM

• Customer support : USD 0,5 MM

• Software : USD 1,5 MM

• Training: USD 0,3 MM

• Others: USD 0,9 MM

• Internal HHRR: USD 5 MM

All figures in USD millions per year

+Service Level Agreements

José Miguel de la CuadraHead of Public Procurement Division of ChileCompra

Ministry of [email protected]

Thank You