Centralized and Cooperative Procurement: International Good Practice

The report describes international cases that illustrate these different forms and draws conclusions and presents key takeaways. The Fiscal Accountability and Sustainable Trade (FAST) task order supports rapid, sustainable, and equitable economic growth in United States Agency for International Development (USAID) assisted countries by enabling the Agency to bring a systems approach to addressing Public Financial Management (PFM), trade capacity building (TCB), macroeconomic planning and policies, and other economic governance issues. The project "Effective Public Procurement for Kyrgyzstani Taxpayers" under FAST seeks to improve the self-reliance of the Kyrgyz Republic by improving public procurement systems. The project has two objectives: to increase efficiency and transparency of public procurement and to enable civic engagement and oversight over public procurement. As an activity under Objective One, the Director of the Department of Public Procurement (DPP) under the Ministry of Finance and Economy has asked the project to conduct a study of international good practice relating to arrangements for centralized and cooperative public procurement. Centralized public procurement means that one body conducts all procurement on behalf of all other entities. Cooperative procurement is the combining of the requirements of two or more public procurement entities to leverage the benefits of volume purchases, delivery and supply chain advantages, best practices, and the reduction of administrative time and expenses. In practice, the terms encompass a variety of different types of cooperative arrangements. Five forms of cooperative procurement have been identified: third-party groups, lead buying groups, program groups, joint procurement, and framework agreements. Third-party groups involve long-term piggybacking where either a for-profit organization or a non-profit organization establishes contracts for common user items and makes these available through e-procurement. Lead buying groups involve outsourcing to the entity that has appropriate expertise, resources, and procurement volume. The report provides an overview of cooperative and centralized arrangements for public procurement in a selection of other jurisdictions as input to potential implementation in the Kyrgyz Republic. The study aims to provide an overview of international good practice relating to arrangements for centralized and cooperative public procurement and to identify potential implementation in the Kyrgyz Republic. The report describes various international cases that illustrate different forms of centralized and cooperative public procurement. These cases include Chile, Denmark, Italy, Netverkstaad Twente, The Netherlands, Queensland, Australia, United Kingdom (UK), United Nations (UN), and United States. The report also discusses the forms of centralization and cooperation, other lessons, and key takeaways. The study highlights the importance of implementing international good practice in public procurement systems to increase efficiency and transparency and to reduce corruption. The report provides recommendations for the implementation of centralized and cooperative procurement arrangements in the Kyrgyz Republic.