2004年-世界发展银行全球_Republic_of_Armenia___Country_Procurement_Assessment_Report_98页_10mb

Summary of the Country Procurement Assessment Report (CPAR) for the Republic of Armenia

Introduction

This report, Report No. 29246-AM, provides an assessment of the public procurement system in the Republic of Armenia. It highlights the legal, institutional, and procedural aspects of procurement and outlines recommendations for improving the system to enhance transparency, competitiveness, and efficiency. The report is part of the World Bank's broader support to Armenia's economic and sector reforms, aiming to align the country's procurement practices with those of the EU and WTO.

Core Content

Legal and Regulatory Framework

• The Law on Procurement (LP), enacted in 2000, is a well-structured legal framework that aligns with the UNCITRAL Model Law and incorporates elements of the World Bank's procurement guidelines, EU directives, and the GPA of the WTO.
• Despite its strengths, the LP requires several amendments to fully align with EU and WTO standards, including the introduction of a Restricted Bidding procedure, pre-qualification systems, and clarification of the applicability of the law to all state entities, regardless of funding source.
• The estimated contract value included in tender announcements and the minimum bid security requirement (5%) are criticized for undermining the competitiveness of the procurement process.

Procurement Practices and Procedures

• Procurement planning and budgeting are weak, leading to the overuse of single-source procurement, which is not in line with the principles of transparency and value for money.
• Single-source procurement is widely used due to delays in budget approvals and uncertainty in the law’s application, especially in the health and education sectors, where the law is not enforced effectively.
• The Ministry of Defense (MOD) has not fully utilized the open bidding provisions for non-sensitive items, despite being subject to the LP.

Organization and Resources

• The State Procurement Agency (SPA) plays a central role in procurement, but its centralized coordination has been questioned for being inefficient and not adding value.
• The procuring entities interviewed indicated that the SPA’s involvement in targeted procurement adds unnecessary delays.
• The Ministry of Finance and Economy (MOFE) has been advocating for equal treatment of donor and budget-funded procurement, and the Authorized Body (AB) is working on electronic procurement initiatives.

Risk Assessment

• The current procurement system is identified as high risk due to poor enforcement, lack of transparency, and the prevalence of non-competitive methods.
• The AB’s dual role as both a review body and an approval institution creates a conflict of interest.
• The perception of the judiciary regarding procurement disputes is poor, further exacerbating the risks.

Recommended Action Plan

• The CPAR recommends strategic changes to the legal framework, including the introduction of restricted bidding, pre-qualification systems, and clarification of the law’s applicability.
• Institutional capacity-building is needed to improve enforcement and training, particularly for procurement officers and bidders.
• A culture of compliance should be fostered to ensure adherence to procurement principles.
• Bank-funded procurement should be streamlined to transfer authority from Project Implementation Units (PIUs) to line ministries.

Electronic Procurement

• The introduction of an electronic procurement system is recommended, starting with the conversion of a print-based framework contract catalog into an electronic version.
• Automated internal systems for contract administration, contract management, and purchase orders are necessary to support e-procurement.
• A one-year transition period is suggested for users to become familiar with the new systems.

Key Findings and Recommendations

Main Findings

• Procurement expenditure constitutes about 70% of total government expenditure, highlighting the importance of reform.
• Non-competitive procurement methods are prevalent, especially in defense, education, and health sectors, due to poor budget planning and lack of enforcement.
• The SPA’s role is questioned, and it is recommended that its function be redefined to focus on secretary duties rather than technical review.
• Monopoly certificates are being misused, leading to artificial monopolies and unfair competition.

Key Recommendations

• Amend the LP to include restricted bidding, pre-qualification systems, and clarification of applicability.
• Reduce bid security requirements from 5% to 2% of the contract value.
• Revise the estimated contract value in tender announcements and remove it from the LP.
• Streamline SPA procedures, including the adoption of an internal procedures manual, computerization, and training.
• Introduce electronic procurement starting with framework contracts and followed by automated systems.
• Transfer procurement authority from PIUs to line ministries, with a focus on open bidding for non-sensitive items.
• Improve budget planning and execution to reduce the reliance on single-source procurement.
• Strengthen anti-corruption measures and ensure transparency in the procurement process.

Conclusion

The CPAR highlights the need for comprehensive legal reforms, institutional capacity-building, and enhanced transparency to improve the public procurement system in Armenia. These changes are essential to align the system with EU and WTO standards, promote private sector participation, and ensure efficient and accountable use of public funds. The report also emphasizes the importance of coordinated efforts between the Government, World Bank, and other donors to achieve these objectives.