Procedures for the Procurement of Aid in Europe: A Critical Assessment

There is currently a dynamic discussion within the international donor community about a segment of the aid process that is usually ignored or let at the disposal of lawyers or procurement specialists, even in the context of the aid harmonisation and aid effectiveness discussions – the procurement of aid. Nevertheless, there is unanimity that good practices in procurement are a key factor for effective and efficient provision of aid and also contribute to a framework of good governance and free and fair competition in general. In this context, the EU and its Member States have been discussing the harmonisation of their respective procedures for the procurement of development assistance contracts.

This paper draws recommendations for the procurement of development assistance derived from a comparative analysis of procedures applied by the EU institutions and Member States in the context of development co-operation. In order to arrive at these recommendations, the following dimensions and basic assumptions are taken into account:

  • Harmonisation and alignment: the main thrust of the Paris Declaration – as far as procurement issues are concerned – is on the alignment process, i.e. to use partner countries' procurement systems. Harmonisation of procurement procedures among donors is not specifically addressed.
  • Donor influence over partner countries: the donor community intends to undertake assessments of each partner in order to validate their procurement capacity (comprising laws; regulations; guidelines; standard documents) on the basis of the work done within the framework of Working Party OECD/DAC-World Bank Joint Venture of procurement. At the same time, they provide advice and technical assistance to partner countries on public financial management and public procurement. The potential impact of harmonisation of procedures on partner countries mainly in terms of capacity building is taken into account.
  • The image of the EC as a donor: harmonisation of EC procedures means to reduce the gap with MDBs and DAC and to take part as a key player of the process on harmonisation and alignment of procurement procedures, not as an observer.

Recommendations are based on a qualitative analysis of procedures for the procurement of aid (covering services, works and supply of goods) applied by European institutions (Commission General Budget, European Development Fund, European Investment Bank, European Agency for Reconstruction) and the EU25 Member States. Procedures have been analysed using a matrix of procurement procedures which was developed in order to standardise and compare the collected information. This matrix follows the logical process of procurement. It contains 15 main criteria for comparison (such as "accountability", "eligibility", etc.) and sub-criteria.

Trade and development discussion paper no. 01/2008, June 2008

Download paper