Transparency, fair competition and accountability are three defining features of an efficient public procurement system. Until 2011, the Bangladesh procurement process was paper-based and plagued by corruption and malpractices. Short bidding periods, nondisclosure of the selection criteria, pre-tender negotiation with bidders were some of the defining features of guiding Bangladesh’s public procurement activities.
Although the World Bank recommended introducing e-Government Procurement (e-GP) system in 2002, it was not until the current government’s Digital Bangladesh agenda that gave fresh impetus for the use and adoption of technology in public procurement. The e-GP system, implemented in 2011, has largely eliminated corruption and malpractices previously attributed to the traditional paper-based procurement system.
As a result of e-GP’s implementation, Bangladesh has accomplished target 12.7 of the SDGs which focuses on advancing public procurement practices. The government has made commendable progress in implementing e-GP and it has designed some indicators to assess the rolling out of e-GP. At present, e-GP is being used by 50 percent of procuring agencies (PAs) and procuring entities (PEs). The time required from tender opening to contract awarding declined from 51 days in 2012 to 29 days in 2015, which has significantly reduced the cost of doing business in Bangladesh.
New research evidence for Bangladesh Priorities by Copenhagen Consensus and the BRAC Institute of Governance and Development (BIGD), BRAC University, indicates that for each and every taka spent towards scaling up e-GP, benefits worth Tk 755 can be generated. Such returns are anticipated as a result of increased competition and transparency in public procurement.
This would mean better spending of the Tk 72,000 crore that the government spends each year on everything from Padma Bridge to pencils in government offices. However, at present, the e-GP system has reached 50 percent of its targeted usage level. It is generating a phenomenal Tk 400 of benefit for each taka that has been spent so far, which can be almost doubled if e-GP is scaled up across the government.
Although e-GP has been embraced by many users, there are some PAs which have been delaying e-GP implementation, preferring to carry on with the traditional paper-based procurement system. The lack of willingness to implement e-GP by such groups of officials and bidders (especially those who have vested interest in terms of rent-seeking), is hindering the wide-scale adoption.
A World Bank project—Digitising Implementation Monitoring and Public Procurement or DIMAPP—was introduced in 2017 to increase the usage of e-GP and improve capacity of public procurement personnel for e-GP’s management and implementation. Under the DIMAPP initiative, which is expected to last until 2022, e-GP system will be deployed in 23 large government organisations. DIMAPP also aims to enhance citizen engagement in monitoring the quality of procured goods and services under the e-GP by government organisations.
There are some e-GP implementation issues such as bidders facing financial transaction complication for failed bids, certain PAs, PEs and bidders being unable to properly navigate e-GP, no mechanism for post-contract monitoring and bidders under-pricing resulting in low quality of goods and services procured. In the absence of monitoring mechanisms, it was found that bidders can incur overrun costs and provide low-quality outputs.
The government is poised to implement the e-Contract Management System (e-CMS) as a monitoring mechanism for post-awarding contractual activities and responsibilities. Prioritising implementation of e-CMS would ensure bidders are using quality inputs and delivering tendered outputs on time. Although the latest budget has not made any specific reference to e-GP, probably due to it being already prioritised under DIMAPP, implementation of e-CMS simultaneously with e-GP’s scaling can do immense good for Bangladesh’s economy.
Our latest research reaffirms earlier Bangladesh Priorities findings that e-GP can do huge amounts of social and economic good by promoting good governance. It is important that the government implements e-CMS and enhances e-GP’s scope to include large-scale projects. These ought to be key priorities under the eighth Five-Year Plan which will drive the economy beyond Vision 2021.
Hasanuzzaman is Outreach Manager for Bangladesh
Priorities. Bjorn Lomborg is President at Copenhagen Consensus Center.