Health concerns, lockdown measures and border closures adopted to prevent the Covid-19 have caused severe disruption in the supply and distribution chain of goods, works, and services that the public sector needs. The pandemic constitutes a major disruption to the ongoing and future tender procedures for public procurement and contracts all over the world. We have asked several experts what is the real impact of Covid-19 on public procurement and how will this affect developing countries.
What is the impact of pandemic on public procurement?
“Public Procurement is suffering a great deal in this period of COVID 19 pandemic. A global phenomenon that has brought the movement of goods across borders and within borders to a halt with partial movement of essential goods such as Personal Protective Equipment [PPE] though with delays and queues at various shipping lines affecting deadlines. Globally, about a ‘hundred thousand businesses’ have folded-up. Most business sectors have lost their workers, the healthcare sector being the hardest hit of about ‘20,000 deaths worldwide’. Procuring services around the world have become extremely difficult due to movement restrictions. The timely provision of public works such as the construction of public buildings; roads, bridges and other structures as an element of Public Procurement have also suffered and contracting entities suspending procedures on their own initiative on emergency grounds.”
“Governments have been exposed to unprecedent conditions, requiring adaptative policy responses to make appropriate use of available public resources, to mitigate and recover from the public health emergency caused by the pandemic. COVID-19 leaves important lessons on sustainability, governance, and inter-institutional cooperation, particularly an emphasis on the role of information technologies in ensuring integrity and accountability, in the pursuit of a more strategic and transparent public procurement system.”
“The COVID-19 Pandemic has created a completely different and instantly changing procurement environment. The unexpected sharp decline in economic activity has also seriously affected the infrastructure sectors. The outbreak of the Coronavirus has raised unprecedented problems for all countries in ensuring the continuity and sustainability of public procurement, and not so much that related to goods purchase as procurement of works and services, since the latter presuppose the presence of a human factor (qualified specialists, consultants, controllers, auditors, and so on).”
“The procurement as its culture involves interactions which include clients, suppliers, services provider, contractors, consultants, government, and other stakeholders. Hence the eruption of the pandemic has negatively affected the public procurement procedures and suspended many projects which were in pipeline. There is a decline in demand and supply.”
How will this affect developing countries?
“Developing countries could suffer from poor developmental outcomes if a firm regulatory entity is not established to check compliance with public procurement law and new practices to cater for these emergencies. Developing countries depend mostly on import goods for survival. Ghana Public Procurement for example, ‘accounts for around 24 percent of total imports into the county’ therefore the inability to meet this import needs could result in hunger, malnutrition, poor healthcare and deaths.”
“In my view, developing countries should revisit some dimensions of their public procurement systems, to build up a culture of transparency, necessary for reducing poverty and corruption. Defining action plans, sound operating procedures and guidelines, integrity risk approaches, and accessible digital tools would improve transparency and accountability in procurement systems, creating a highly professionalized, flexible, and efficient process. Increasing collaborative approaches in procurement strategies, as well as open and innovative ways to promote dialogues between public and private stakeholders, would focus on the need to understand and engage the market better and enhance competition. Well-designed and sustainable public procurement systems, with a view on strategic government spending, will contribute directly to greater public trust and more inclusive societies, helping developing countries to progress in achieving the Sustainable Development Goals (SDGs).”
“Under the current conditions, the developing countries turned out to be especially vulnerable, and this unfavorable situation almost completely ruled out any non-financial, but practical preferences that were granted to these countries through their membership in various customs and economic unions, should it be it the European Economic Community (EEC), the Eastern Partnership, The Eurasian Economic Union, or any other. The “contract migration” of the involved specialists and consultants also became extremely obstructed and difficult, if not completely excluded, while their availability and presence “on the spot” is the key to the successful implementation of the funded programs, especially regarding the projects in the construction and agricultural sectors. Governments in developing countries will have to procure goods, works and services vital to states in an entirely new, “harsh” environment, while ensuring smooth and accountable management of ongoing contracts to continue providing public services to their citizens.”
“The developing countries will be more affected due to manual operations of public procurement procedures, due to lockdown, income losses, disrupted supply chains, and lower demand for their goods. The heightened risk aversion could lead to rising borrowing costs. Bankruptcies and defaults could result in financial crises in many countries.”
Check out the DevelopmentAid tender information here.
