Supply Side
Public Procurement in Ireland and Chile – More Questions than Answers from Interview

“Who’s Who Legal” is not a website we have come across before. It is published by Law Business Research Ltd, an independent publisher of research, data and analysis on legal matters, and it seems to carry a fair amount of material connected with public procurement.

The article that caught our eye is an interview here with two legal practitioners from different sides of the world. They are Peter Curran of Eversheds in Dublin, Ireland, and Pedro García M. of Morales & Besa in Chile, who came together “to discuss public sector investment, government initiatives and the nature of the legal market in this field”. It is an interesting article, although really I would have liked to hear more about some of the specific procurement issues raised – a lot of ground is covered without really digging into what I suspect could have been interesting detail. Curran talks about litigation and challenges in public procurement for instance, and says this:

“It can vary from sector to sector, but disputes are now very common in certain areas and for certain types of contracts. It depends a lot on how a particular market is structured, how significant the tendered contract is, and how many other opportunities are available at any given time.”

That is all true, but we would have been interested to get his views on which specific areas are causing the challenges in Ireland – is it tender evaluation processes, conflicts of interest, favouritism shown to one bidder … or whatever. Similarly, García mentions the centralised procurement approach in Chile, without giving his views on whether it is working well, or showing benefits to the taxpayer:

“Public procurement through Chilecompras, a centralised online public procurement system amounted to US$10.2 billion in 2014, representing a 7 per cent increase from 2013. This amount is expected to grow even further, as public expenditures increased approximately 9 per cent in the 2015 Chilean public budget.”

Curran talks about the drive to involve smaller firms (SMEs) in public procurement more in Ireland, through mechanisms such as encouraging consortia, or splitting contracts into lots. “Social clauses are being deployed to open up employment or training opportunities for the long-term unemployed” and, just like in Chile, there is a drive to more centralised procurement in the public sector, and a greater use of framework agreements.

Moving away from the specifics of the interview, (and it is worth reading the whole article here), it does strike us that there are a number of ideas and policies in public procurement that seem to be increasingly taken as “best practice” approaches to public procurement. Yet none of them is actually proven in the sense of there being a body of real, hard supporting evidence, ideally coming from proper experimentation and evaluation. Are these approaches really delivering benefits to the taxpayers and the citizens, or are they simply beliefs or assumptions? We often assume they are the right things to do, but with little real evidence.

Curran mentions three of these in one just of the responses he gives in the interview; the idea that giving more public contracts to SMEs is a good thing; more use of framework agreements; and greater centralisation of public procurement. Public procurement in most countries, as far as we are aware, seems to be going down these roads, but should it be?

We have written previously about the positives and negatives of collaboration for instance, which is closely linked to centralisation. And other commentators such as Abby Semple, author of A Practical Guide to Public Procurement, has called for more use of “randomised controlled trials” to examine public procurement policies. But too often, it seems, policies are based purely on what people believe works.