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Public procurement can have a significant impact on a country’s development. As highlighted in the 2015 OECD Recommendation of the Council on Public Procurement, ensuring broad access to the public procurement market is essential for achieving value for money, as it promotes competition and creates a level playing field.
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Public procurement is crucial for delivering public services, whether in health, education, infrastructure or public safety. In Kazakhstan, public procurement accounts for 6.6% of GDP in Kazakhstan, which is relatively low compared to the OECD average, but it also represents 43% of government expenditures, which is above the OECD average. Kazakhstan is committed to improving its system to maximise its potential, and made significant changes to the public procurement law in recent years.
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This chapter describes and analyses the normative framework of Kazakhstan’s public procurement system, which is currently undergoing a process of centralisation, and the role and relevance of the institutions managing it. It assesses the impact of the public procurement Law (PPL) adopted in 2015 and the impact of the December 2018 amendments to revise the 2015 PPL. The chapter also analyses the potential benefits and risks of more centralised purchasing, as Kazakhstan is to allow the aggregation of purchases from different contracting authorities, and identifies necessary steps on the path to centralisation. Lastly, it introduces the benefits of framework agreements, a tool commonly used by OECD countries in public procurement.
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This chapter provides an overview of the main procurement methods applied in Kazakhstan and assesses the different stages of the procurement cycle to identify challenges and opportunities for improvement. This includes measures to improve procurement planning, the preparation of technical specifications, to increase competition by reducing exceptions to competitive tendering and facilitating access for non-resident suppliers. This chapter also examines how the Government of Kazakhstan can broaden its approach to the application of award criteria by applying a points and percentages system for public tenders. Finally, it discusses how the country can benefit from the implementation of a broad framework for contract management.
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The chapter covers e-procurement and transparency of public procurement in Kazakhstan. While the e-procurement system generally provides adequate transparency regarding individual purchases, the quantity and the quality of aggregated procurement data are insufficient. Kazakhstan would gain from collecting and disclosing more aggregated statistics on its public procurement system and move towards an open data approach. Certain mechanisms providing information to suppliers need to be fine-tuned, such as procurement plans or the reciprocal review of suppliers’ offers. Enhanced availability of aggregated procurement data would allow Kazakhstan to measure and disclose performance indicators in a more structured and systematic manner, allowing for evidence-based assessments of the procurement function of contracting authorities, and of the public procurement system as a whole.
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This chapter covers issues related to integrity in public procurement. It analyses the existing risk-based internal control procedures in place, and finds that while corruption risk assessments take place, the process could be integrated more effectively into everyday activities. Assessing the application of integrity standards to the procurement profession, this chapter finds that Kazakhstan could develop tailored integrity standards and training for the procurement workforce. Recognising the role of participation by external stakeholders to increase transparency and integrity, this chapter also finds that Kazakhstan could build on existing social control projects to institute a social witness programme. Kazakhstan has taken strides to broaden its complaints management system, and should now focus on ensuring it is efficient and effective.
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This chapter discusses the potential of the Republic of Kazakhstan to strengthen the strategic use of public procurement. The transition of public procurement from an administrative function to a more strategic function is a common challenge for many OECD and non-OECD countries and also affects the Republic of Kazakhstan. A highly skilled and adequately trained public procurement workforce is required for the transition to a strategic use of public procurement. Working towards making public procurement a recognised profession is essential for the development of a highly skilled workforce, as well as a procurement-specific training that goes beyond compliance and legal aspects.
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SOEs represent the largest part of the public procurement market in Kazakhstan. Therefore, it is important to analyse their activities to understand the full picture of public procurement in country. Many rules are similar to the national procurement system. However, their distinct nature has given some the power to develop different approaches to procurement and spearhead in some areas. Globally, however, the general challenges of Kazakhstan’s procurement system persist also in the area of SOE procurement, such as a high share of direct awards or limited access from foreign suppliers.