Just as I shared my concerns in this article some 1.5 years ago, Armenia hit a concrete wall of ineffectiveness, corruption, low accountability and low transparency, inefficiency and bureaucracy while managing its public procurement. In other words, dead end.
Writing my first article to share my thoughts, I had three basic concerns:
- The Law on Public Procurement is imperfect
- Ministries have no procurement capacity
- The Center for Procurement Support (former State Procurement Agency) does not have the capacity to support public procurement in the country.
Today we all witness the natural consequences of those concerns. This was predictable and expected from the very beginning. Let us analyze why. Again.
Problem No. 1. The Law
The current Law on public procurement is far from being good. It has many flaws, corruption risks, vague wording, ineffective procedures, bureaucracy blocks, etc. To be honest, no government can be effective with such Law. The country needs to review the Law on public procurement and prepare a comprehensive gap analysis. Another solution is simple and free, just compare the Law to the Laws of developed European countries.
UNCITRAL has recently developed the Model Law on Public Procurement. This Model can be easily adopted by Armenia. There is no need to invent a bicycle.
Problem No. 2. Procurement capacity
Decentralizing procurement to Ministries and other state entities is good. If Ministries and other state entities are ready to procure. It was really naive to decentralize public procurement to Ministries and other state entities when those entities had no procurement officers. I do not know what made the government think all state entities are ready to take over procurement responsibilities.
Again, procurement is a different science and profession. Just like physics or statistics. People who never procured and were never trained to procure cannot procure effectively. Just like a driver cannot be a pilot. A dentist cannot operate your heart. And your English teacher cannot teach you Spanish.
Each Ministry (or any state entity) should not only have a procurement responsible, but it should also have a separate procurement unit. Well experienced and trained. This unit/responsible should do nothing but procurement.
Problem No. 3. Center for Procurement Support
This Center is responsible for supporting procurement in the country. But it does not. This Center is responsible for training all procurement staff. But it can not.
The Center has neither enough staff nor enough financial resources to do what it is meant to do.
Now, having these three fundamental problems no wonder the president found Armenia’s public procurement ineffective. But I am afraid we will still take the wrong pill to cure it. I am afraid instead of addressing the three fundamental issues above the government will arrest a couple of guilty people and will organize a couple of exemplary tenders to show measures are taken.
But this is a placebo effect. Just like the old joke about headache. “Do you want to get rid of your headache? Take a huge stone and hit your foot with it. You will forget about your headache for some time….”
Let’s see how this unfolds…
About the Author
Levon Hovsepyan is a distinguished member of International Procurement Group.