Recommendation of the Council on

Public Procurement

OECD Legal
Instruments
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Background Information

The OECD Recommendation on Public Procurement was adopted by the OECD Council on 18
February 2015 on the proposal of the Public Governance Committee in co-operation with the
Competition Committee and the Working Group on Bribery in International Business Transactions and
in consultation with other OECD committees.

Public procurement is a crucial pillar of strategic governance and services delivery for governments. In
view of the volume of spending it represents, governments have a fundamental responsibility to carry
out public procurement efficiently and with high standards of conduct in order to ensure high quality of
public service delivery and safeguard the public interest. Used strategically, public procurement can
help make economies more productive, public sectors more efficient, societies and economies more
inclusive, and institutions more trusted. Well-designed public procurement systems can also contribute
to achieving pressing policy goals such as environmental protection, innovation, job creation and the
development of small and medium enterprises.

The Recommendation replaces and builds upon the foundational principles of the 2008 OECD
Recommendation on Enhancing Integrity in Public Procurement [OECD/LEGAL/0369], expanding
them to reflect the critical role governance of public procurement must play in achieving efficiency and
advancing public policy objectives in all stages of the procurement cycle, from the definition of public
needs to effective contract execution.

The Recommendation recognises that the efficient and effective public procurement of goods,
services and works is vital to the core purposes of government, including infrastructure investment and
the delivery of essential services to citizens. It contains twelve integrated principles; transparency,
integrity, access, balance, stakeholder participation, efficiency, e-procurement, capacity, evaluation,
risk management, accountability and integration.

Public procurement is at the frontline of governments’ responses to the COVID-19 outbreak. The
pandemic, however, has created a radically new purchasing environment with fierce competition
between public buyers for the same vital products and services, serious disruptions in supply chains,
unexpected market responses, price inflation as demand across the globe far exceeds supply, and
higher risks for counterfeit products, to name just a few. The Recommendation provides a
comprehensive framework to support Adherents overcoming the new challenges, bringing adaptive
policy responses and new approaches.

For more information, see:

Stocktaking report on immediate public procurement and infrastructure responses to COVID-

19

For more information on the Recommendation, please consult: http://www.oecd.org/gov/public-

procurement/recommendation/.

Contact information: [email protected].

Implementation

2019 report to the OECD Council

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The 2019 report on the implementation of the Recommendation on Public Procurement presents
progress made by Adherents in implementing the Recommendation four years after its adoption and
covers each of its twelve integrated principles. As some non-Members demonstrated a strong interest
to implement the Recommendation without formally adhering to it, the report also includes information
from Costa Rica, Morocco and Peru, who have participated in projects and work related to the
Recommendation. The report draws on information collected through the OECD Public Procurement
Toolbox, which contains information on good practices and Adherents’ experiences in implementation
and a large number of case studies drawn from peer reviews of procurement systems, as well as two
surveys conducted among Adherents.

The report demonstrates that the Recommendation remains highly relevant, has been widely
disseminated, and that Adherents have made significant progress in implementing its provisions,
particularly regarding the adoption of strategies to pursue broader policy objectives (preserving the
environment, innovation, SMEs and Responsible business conduct) through public procurement.

Nevertheless, the report identified a number of areas where further work could be done to support
implementation and on which Adherents could focus their efforts moving forward. In particular, the
public procurement workforce remains a challenge with both capability and capacity lacking. In
addition, while the continued improvement of efficiency and effectiveness through centralisation of
public procurement is apparent from responses, the measurement of its results and evidence based
improvements are still not widely implemented . Lastly, Adherents could (i) engage further in peer
learning and sharing of experiences through the Public Procurement Toolbox, (ii) develop performance
management systems with key performance indicators to provide data to measure the
implementation of strategic policy objectives, and (iii) further promote and raise awareness of the
Recommendation nationally and internationally.

With this in mind, on 2 July 2019, the OECD Council encouraged Adherents to address the main
findings and challenges identified in the report and invited the Public Government Committee to
continue monitoring the implementation of the Recommendation and report to it thereon within five
years.

Published version of the report.

Public Procurement Toolbox and Methodology

The OECD Secretariat has developed tools to support Adherents’ implementation of the
Recommendation and to provide both policy-makers and practitioners with evidence and policy
options to infuse a more strategic approach into public procurement systems and improve their
functioning. In particular, the Secretariat has developed the Public Procurement Toolbox, a web-based
platform that includes a comprehensive checklist to guide and support public procurement
practitioners in reviewing, developing and updating their procurement framework, and more than 180
case studies. Adherents have been actively engaged in the development of this knowledge-sharing
tool, submitting policies and good practices, helping ensure that it functions as a detailed and accurate
source of information on what has been done by Adherents to implement specific provisions of the
Recommendation.

The OECD Public procurement toolbox is available at:

https://www.oecd.org/governance/procurement/toolbox/

For more information on the OECD peer reviews of procurement systems, please consult:
http://www.oecd.org/gov/public­procurement/
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THE COUNCIL,

HAVING REGARD to Article 5 b) of the Convention on the Organisation for Economic Co-operation
and Development of 14 December 1960;

HAVING REGARD to the Recommendation of the Council for Improving the Quality of Government
Regulation [C(95)21/FINAL], the DAC Recommendation on Anti-Corruption Proposals for Bilateral Aid
Procurement [DCD/DAC(96)11/FINAL], the Recommendation of the Council on Improving Ethical
Conduct in the Public Service including Principles for Managing Ethics in the Public Service [C(98)70],
the Recommendation of the Council on Improving the Environmental Performance of Public
Procurement [C(2002)3], the Recommendation of the Council on OECD Guidelines for Managing
Conflict of Interest in the Public Sector [C(2003)107], the Recommendation of the Council on OECD
Guidelines on Corporate Governance of State-Owned Enterprises [C(2005)47], the Guiding Principles
for Regulatory Quality and Performance [C(2005)52 and CORR1], the Policy Framework for
Investment [C(2006)68], the Recommendation of the Council on Principles for Private Sector
Participation in Infrastructure [C(2007)23/FINAL], the Convention on Combating Bribery of Foreign
Public Officials in International Business Transactions, the Recommendation of the Council for Further
Combating Bribery of Foreign Public Officials in International Business Transactions
[C(2009)159/REV1/FINAL], the Recommendation of the Council on Principles for Transparency and
Integrity in Lobbying [C(2010)16], the 2011 update of the OECD Guidelines for Multinational
Enterprises [C/MIN(2011)11/FINAL], the Recommendation of the Council on Regulatory Policy and
Governance [C(2012)37], the Recommendation of the Council on Principles for Public Governance of
Public-Private Partnerships [C(2012)86], the Recommendation of the Council on Fighting Bid Rigging
in Public Procurement [C(2012)115], the Recommendation of the Council on Effective Public
Investment Across Levels of Government [C(2014)32], and the Recommendation of the Council on
Digital Government Strategies [C(2014)88], the Recommendation of the Council on Budgetary
Governance [C(2015)1];

HAVING REGARD to the growing interest in the governance of public procurement to achieve
efficiency and economy, and to foster secondary policy objectives, since the adoption of the
Recommendation of the Council on Enhancing Integrity in Public Procurement [C(2008)105], which
this Recommendation replaces;

NOTING that the legislation in a number of Member and non-Member countries also reflects other
international legal instruments on public procurement and anti-corruption developed within the
framework of the United Nations, the World Trade Organisation or the European Union;

RECOGNISING that the efficient and effective public procurement of goods, services and works is
vital to the core purposes of government, including infrastructure investment and the delivery of
essential services to citizens;

RECOGNISING that public procurement is a key economic activity of governments that is particularly
vulnerable to mismanagement, fraud and corruption;

RECOGNISING that efforts to enhance good governance and integrity in public procurement
contribute to an efficient and effective management of public resources and therefore of taxpayer’s
money;

RECOGNISING that Members and non-Members adhering to this Recommendation (hereafter the
“Adherents”) share a common interest in improving economy and efficiency and in preventing risks to
integrity throughout the public procurement cycle, starting from needs assessment until payment and
contract management;

CONSIDERING that the Report by the Public Governance Committee on the implementation of the
Recommendation of the Council on Enhancing Integrity in Public Procurement [C(2008)105] identified
key challenges faced by countries to improve public procurement systems and areas for improvement
[C(2012)98 and C(2012)98/CORR1];
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On the proposal of the Public Governance Committee in co-operation with the Competition
Committee and the Working Group on Bribery in International Business Transactions, and in
consultation with other competent OECD committees:

I. AGREES that, for the purpose of the present Recommendation, the following definitions are
used:

 E-procurement refers to the integration of digital technologies in the replacement or redesign

of paper-based procedures throughout the procurement process;
 Integrity refers to the use of funds, resources, assets and authority, according to the
intended official purposes and in a manner that is well informed, aligned with the public
interest, and aligned with broader principles of good governance;
 Primary procurement objective refers to delivering goods and services necessary to
accomplish government mission in a timely, economical and efficient manner;
 Public procurement refers to the process of identifying what is needed; determining who the
best person or organisation is to supply this need; and ensuring what is needed is delivered
to the right place, at the right time, for the best price and that all this is done in a fair and open
manner;
 Public procurement cycle refers to the sequence of related activities, from needs
assessment, through competition and award, to payment and contract management, as well
as any subsequent monitoring or auditing;
 Secondary policy objectives refers to any of a variety of objectives such as sustainable
green growth, the development of small and medium-sized enterprises, innovation, standards
for responsible business conduct or broader industrial policy objectives, which governments
increasingly pursue through use of procurement as a policy lever, in addition to the primary
procurement objective.

II. RECOMMENDS that Adherents ensure an adequate degree of transparency of the public
procurement system in all stages of the procurement cycle.

To this end, Adherents should:

i) Promote fair and equitable treatment for potential suppliers by providing an

adequate and timely degree of transparency in each phase of the public
procurement cycle, while taking into account the legitimate needs for protection of
trade secrets and proprietary information and other privacy concerns, as well as the
need to avoid information that can be used by interested suppliers to distort competition
in the procurement process. Additionally, suppliers should be required to provide
appropriate transparency in subcontracting relationships.

ii) Allow free access, through an online portal, for all stakeholders, including
potential domestic and foreign suppliers, civil society and the general public, to
public procurement information notably related to the public procurement system
(e.g. institutional frameworks, laws and regulations), the specific procurements (e.g.
procurement forecasts, calls for tender, award announcements), and the performance
of the public procurement system (e.g. benchmarks, monitoring results). Published data
should be meaningful for stakeholder uses.

iii) Ensure visibility of the flow of public funds, from the beginning of the budgeting
process throughout the public procurement cycle to allow (i) stakeholders to
understand government priorities and spending, and (ii) policy makers to organise
procurement strategically.

III. RECOMMENDS that Adherents preserve the integrity of the public procurement system
through general standards and procurement-specific safeguards.

To this end, Adherents should:

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i) Require high standards of integrity for all stakeholders in the procurement cycle.
Standards embodied in integrity frameworks or codes of conduct applicable to public-
sector employees (such as on managing conflict of interest, disclosure of information or
other standards of professional behaviour) could be expanded (e.g. through integrity
pacts).

ii) Implement general public sector integrity tools and tailor them to the specific
risks of the procurement cycle as necessary (e.g. the heightened risks involved in
public-private interaction and fiduciary responsibility in public procurement).

iii) Develop integrity training programmes for the procurement workforce, both public
and private, to raise awareness about integrity risks, such as corruption, fraud, collusion
and discrimination, develop knowledge on ways to counter these risks and foster a
culture of integrity to prevent corruption.

iv) Develop requirements for internal controls, compliance measures and anti-
corruption programmes for suppliers, including appropriate monitoring. Public
procurement contracts should contain “no corruption” warranties and measures should
be implemented to verify the truthfulness of suppliers’ warranties that they have not and
will not engage in corruption in connection with the contract. Such programmes should
also require appropriate supply-chain transparency to fight corruption in subcontracts,
and integrity training requirements for supplier personnel.

IV. RECOMMENDS that Adherents facilitate access to procurement opportunities for potential
competitors of all sizes.

To this end, Adherents should:

i) Have in place coherent and stable institutional, legal and regulatory frameworks,
which are essential to increase participation in doing business with the public sector and
are key starting points to assure sustainable and efficient public procurement systems.
These frameworks should:

1. be as clear and simple as possible;

2. avoid including requirements which duplicate or conflict with other legislation or

regulation; and

3. treat bidders, including foreign suppliers, in a fair, transparent and equitable

manner, taking into account Adherents’ international commitments (e.g., the
Agreement on Government Procurement within the framework of the World Trade
Organization, the European Union Procurement Directives, and bilateral or
multilateral trade agreements).

ii) Deliver clear and integrated tender documentation, standardised where possible
and proportionate to the need, to ensure that:

1. specific tender opportunities are designed so as to encourage broad participation

from potential competitors, including new entrants and small and medium
enterprises. This requires providing clear guidance to inform buyers’ expectations
(including specifications and contract as well as payment terms) and binding
information about evaluation and award criteria and their weights (whether they
are focused specifically on price, include elements of price/quality ratio or support
secondary policy objectives);

2. the extent and complexity of information required in tender documentation and

the time allotted for suppliers to respond is proportionate to the size and
complexity of the procurement, taking into account any exigent circumstances
such as emergency procurement.
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iii) Use competitive tendering and limit the use of exceptions and single-source
procurement. Competitive procedures should be the standard method for conducting
procurement as a means of driving efficiencies, fighting corruption, obtaining fair and
reasonable pricing and ensuring competitive outcomes. If exceptional circumstances
justify limitations to competitive tendering and the use of single-source procurement,
such exceptions should be limited, pre-defined and should require appropriate
justification when employed, subject to adequate oversight taking into account the
increased risk of corruption, including by foreign suppliers.

V. RECOMMENDS that Adherents recognise that any use of the public procurement system to
pursue secondary policy objectives should be balanced against the primary procurement objective.

To this end, Adherents should:

i) Evaluate the use of public procurement as one method of pursuing secondary

policy objectives in accordance with clear national priorities, balancing the
potential benefits against the need to achieve value for money. Both the capacity of the
procurement workforce to support secondary policy objectives and the burden
associated with monitoring progress in promoting such objectives should be considered.

ii) Develop an appropriate strategy for the integration of secondary policy objectives
in public procurement systems. For secondary policy objectives that will be
supported by public procurement, appropriate planning, baseline analysis, risk
assessment and target outcomes should be established as the basis for the
development of action plans or guidelines for implementation.

iii) Employ appropriate impact assessment methodology to measure the

effectiveness of procurement in achieving secondary policy objectives. The
results of any use of the public procurement system to support secondary policy
objectives should be measured according to appropriate milestones to provide policy
makers with necessary information regarding the benefits and costs of such use.
Effectiveness should be measured both at the level of individual procurements, and
against policy objective target outcomes. Additionally, the aggregate effect of pursuing
secondary policy objectives on the public procurement system should be periodically
assessed to address potential objective overload.

VI. RECOMMENDS that Adherents foster transparent and effective stakeholder participation.

To this end, Adherents should:

i) Develop and follow a standard process when formulating changes to the public
procurement system. Such standard process should promote public consultations,
invite the comments of the private sector and civil society, ensure the publication of the
results of the consultation phase and explain the options chosen, all in a transparent
manner.

ii) Engage in transparent and regular dialogues with suppliers and business
associations to present public procurement objectives and to assure a correct
understanding of markets. Effective communication should be conducted to provide
potential vendors with a better understanding of the country’s needs, and government
buyers with information to develop more realistic and effective tender specifications by
better understanding market capabilities. Such interactions should be subject to due
fairness, transparency and integrity safeguards, which vary depending on whether an
active procurement process is ongoing. Such interactions should also be adapted to
ensure that foreign companies participating in tenders receive transparent and effective
information.

iii) Provide opportunities for direct involvement of relevant external stakeholders in

the procurement system with a view to increase transparency and integrity while
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assuring an adequate level of scrutiny, provided that confidentiality, equal treatment and
other legal obligations in the procurement process are maintained.

VII. RECOMMENDS that Adherents develop processes to drive efficiency throughout the public
procurement cycle in satisfying the needs of the government and its citizens.

To this end, Adherents should:

i) Streamline the public procurement system and its institutional frameworks.

Adherents should evaluate existing processes and institutions to identify functional
overlap, inefficient silos and other causes of waste. Where possible, a more service-
oriented public procurement system should then be built around efficient and effective
procurement processes and workflows to reduce administrative red tape and costs, for
example through shared services.

ii) Implement sound technical processes to satisfy customer needs efficiently.

Adherents should take steps to ensure that procurement outcomes meet the needs of
customers, for instance by developing appropriate technical specifications, identifying
appropriate award criteria, ensuring adequate technical expertise among proposal
evaluators, and ensuring adequate resources and expertise are available for contract
management following the award of a contract.

iii) Develop and use tools to improve procurement procedures, reduce duplication
and achieve greater value for money, including centralised purchasing, framework
agreements, e-catalogues, dynamic purchasing, e-auctions, joint procurements and
contracts with options. Application of such tools across sub-national levels of
government, where appropriate and feasible, could further drive efficiency.

VIII. RECOMMENDS that Adherents improve the public procurement system by harnessing the
use of digital technologies to support appropriate e-procurement innovation throughout the
procurement cycle.

To this end, Adherents should:

i) Employ recent digital technology developments that allow integrated e-

procurement solutions covering the public procurement cycle. Information and
communication technologies should be used in public procurement to ensure
transparency and access to public tenders, increasing competition, simplifying
processes for contract award and management, driving cost savings and integrating
public procurement and public finance information.

ii) Pursue state-of-the-art e-procurement tools that are modular, flexible, scalable
and secure in order to assure business continuity, privacy and integrity, provide fair
treatment and protect sensitive data, while supplying the core capabilities and functions
that allow business innovation. E-procurement tools should be simple to use and
appropriate to their purpose, and consistent across procurement agencies, to the extent
possible; excessively complicated systems could create implementation risks and
challenges for new entrants or small and medium enterprises.

IX. RECOMMENDS that Adherents develop a procurement workforce with the capacity to
continually deliver value for money efficiently and effectively.

To this end, Adherents should:

i) Ensure that procurement officials meet high professional standards for

knowledge, practical implementation and integrity by providing a dedicated and
regularly updated set of tools, for example, sufficient staff in terms of numbers and
skills, recognition of public procurement as a specific profession, certification and
regular trainings, integrity standards for public procurement officials and the existence
10 OECD/LEGAL/0411
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of a unit or team analysing public procurement information and monitoring the

performance of the public procurement system.

ii) Provide attractive, competitive and merit-based career options for procurement
officials, through the provision of clear means of advancement, protection from political
interference in the procurement process and the promotion of national and international
good practices in career development to enhance the performance of the procurement
workforce.

iii) Promote collaborative approaches with knowledge centres such as universities,

think tanks or policy centres to improve skills and competences of the
procurement workforce. The expertise and pedagogical experience of knowledge
centres should be enlisted as a valuable means of expanding procurement knowledge
and upholding a two-way channel between theory and practice, capable of boosting
application of innovation to public procurement systems.

X. RECOMMENDS that Adherents drive performance improvements through evaluation of the

effectiveness of the public procurement system from individual procurements to the system as a
whole, at all levels of government where feasible and appropriate.

To this end, Adherents should:

i) Assess periodically and consistently the results of the procurement process.

Public procurement systems should collect consistent, up-to-date and reliable
information and use data on prior procurements, particularly regarding price and overall
costs, in structuring new needs assessments, as they provide a valuable source of
insight and could guide future procurement decisions.

ii) Develop indicators to measure performance, effectiveness and savings of the

public procurement system for benchmarking and to support strategic policy making
on public procurement.

XI. RECOMMENDS that Adherents integrate risk management strategies for mapping,
detection and mitigation throughout the public procurement cycle.

To this end, Adherents should:

i) Develop risk assessment tools to identify and address threats to the proper
function of the public procurement system. Where possible, tools should be
developed to identify risks of all sorts – including potential mistakes in the performance
of administrative tasks and deliberate transgressions – and bring them to the attention
of relevant personnel, providing an intervention point where prevention or mitigation is
possible.

ii) Publicise risk management strategies, for instance, systems of red flags or whistle-
blower programmes, and raise awareness and knowledge of the procurement workforce
and other stakeholders about the risk management strategies, their implementation
plans and measures set up to deal with the identified risks.

XII. RECOMMENDS that Adherents apply oversight and control mechanisms to support
accountability throughout the public procurement cycle, including appropriate complaint and
sanctions processes.

To this end, Adherents should:

i) Establish clear lines for oversight of the public procurement cycle to ensure that
the chains of responsibility are clear, that oversight mechanisms are in place and that
the delegated levels of authority for approval of spending and approval of key
procurement milestones is well defined. Rules for justifying and approving exceptions to
 OECD/LEGAL/0411 11
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procurement procedures should be comprehensive and clear, such as in cases of

limiting competition.

ii) Develop a system of effective and enforceable sanctions for government and
private-sector procurement participants, in proportion to the degree of wrong-doing to
provide adequate deterrence without creating undue fear of consequences or risk-
aversion in the procurement workforce or supplier community.

iii) Handle complaints in a fair, timely and transparent way through the establishment
of effective courses of action for challenging procurement decisions to correct defects,
prevent wrong-doing and build confidence of bidders, including foreign competitors, in
the integrity and fairness of the public procurement system. Additional key aspects of an
effective complaints system are dedicated and independent review and adequate
redress.

iv) Ensure that internal controls (including financial controls, internal audit and
management controls), and external controls and audits are coordinated,
sufficiently resourced and integrated to ensure:

1. the monitoring of the performance of the public procurement system;

2. the reliable reporting and compliance with laws and regulations as well as clear
channels for reporting credible suspicions of breaches of those laws and
regulations to the competent authorities, without fear of reprisals;

3. the consistent application of procurement laws, regulations and policies;

4. a reduction of duplication and adequate oversight in accordance with national

choices;

5. independent ex-post assessment and, where appropriate, reporting to relevant

oversight bodies.

XIII. RECOMMENDS that Adherents support integration of public procurement into overall public
finance management, budgeting and services delivery processes.

To this end, Adherents should:

i) Rationalise public procurement spending by combining procurement processes

with public finance management to develop a better understanding of the spending
dedicated to public procurement, including the administrative costs involved. This
information can be used to improve procurement management, reduce duplication, and
deliver goods and services more efficiently. Budget commitments should be issued in a
manner that discourages fragmentation and is conducive to the use of efficient
procurement techniques.

ii) Encourage multi-year budgeting and financing to optimise the design and
planning of the public procurement cycle. Flexibility, through multi-year financing
options – when justified and with proper oversight – should be provided to prevent
purchasing decisions that do not properly allocate risks or achieve efficiency due to
strict budget regulation and inefficient allocation.

iii) Harmonise public procurement principles across the spectrum of public services
delivery, as appropriate, including for public works, public-private partnerships
and concessions. When delivering services under a wide array of arrangements with
private-sector partners, Adherents should ensure as much consistency as possible
among the frameworks and institutions that govern public services delivery to foster
efficiency for the government and predictability for private-sector partners.

XIV. INVITES the Secretary-General to disseminate this Recommendation.

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XV. INVITES Adherents to disseminate this Recommendation at all levels of government, and to
consider the implementation of this Recommendation in other relevant contexts, such as procurement
by state-owned enterprises or procurement conducted under aid arrangements.

XVI. INVITES non-Adherents to take account of and adhere to this Recommendation.

XVII. INSTRUCTS the Public Governance Committee to monitor, in co-operation with the
Competition Committee and the Working Group on Bribery in International Business Transactions, and
in consultation with other competent OECD committees, the implementation of this Recommendation
and to report thereon to the Council no later than three years following its adoption and regularly
thereafter.
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OECD Legal Instruments

Since the creation of the OECD in 1961, around 460 substantive legal instruments have been
developed within its framework. These include OECD Acts (i.e. the Decisions and Recommendations
adopted by the OECD Council in accordance with the OECD Convention) and other legal instruments
developed within the OECD framework (e.g. Declarations, international agreements).

All substantive OECD legal instruments, whether in force or abrogated, are listed in the online
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• Decisions are adopted by Council and are legally binding on all Members except those which
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do their best to implement them.

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