Chapter 3. A multi-phase roadmap for upgrading CompraNet from compliance to integration
The Roadmap developed by the OECD is the product of the recommendations of the Subgroups under the guidance of the Ministry of Public Administration (Secretaría de la Función Pública, SFP), co-ordinated and streamlined by the OECD based on international best practices. Additional guidance is provided on how best to implement the Roadmap, given the many considerations surrounding the execution of a programme of this complexity. This chapter outlines the course of action proposed by the Roadmap and evaluates each action in the light of the other dimensions affected, including technological, legal, procedural and governance considerations. This reinforces the need to apply a holistic approach to implementation that takes into account the implications of each change in the e-procurement system.
A comprehensive programme for the CompraNet Roadmap
A multi-phase rollout will set up building blocks for subsequent phases
A phased approach to implementation has generally been advocated by the OECD in other e-procurement implementation projects. This is common in large, transformative projects, as it allows for closer monitoring and control. It also reduces the impact of change on users of the system and other stakeholders, and allows for modifications in plans and approach in response to developments in the political environment or technology (OECD, 2017[1]).
Guidance provided by many development banks on implementing national e-procurement systems suggests that a gradual approach to e-procurement reform is advisable, particularly in countries that have developed their foundations through steady advances in the definition of e-government procurement policies, successive legal reforms and, in general, the use of cumulative processes (Procurement Harmonization Project of the Asian Development Bank, 2004[2]). This study proposed a gradual approach that would divide implementation into four phases, namely:
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Preparation: This is a definitive phase for the success of e-government procurement. Three basic prerequisites for start-up are in play: what (vision), who (institutional framework and leadership), and how (action plan).
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Tendering: The objective of this phase is to conduct tendering processes within shorter time frames, at a lower cost for both suppliers and the government, with transparency, and with a high impact on development.
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Contract management: This phase entails developing the capacity to perform on line, and therefore at lower cost, with high transparency, contract management activities such as monitoring of partial and final delivery of goods, services and works, intermediate and final payment management, and contract variations or adjustments.
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Purchasing: The objective of this phase is to develop a directly transactional system. Suppliers may offer their goods and services, allowing public entities to select the best option among them on line, manage supply and receipt, update inventories accordingly, and request and process payment.
The Roadmap for CompraNet was developed with this in mind, taking into account the specific context of Mexico, the current state of the CompraNet system and the lessons learned in other OECD reviews of Mexico’s institutions. The improvements are divided into areas corresponding to the remit of the Subgroups. However, some recommendations have been amended or combined with others to develop a cohesive Roadmap for the system.
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Phase 1 – Compliance-Driven System: the first phase will run to November 2018, which does not leave sufficient time to introduce significant operational changes. Instead, the focus of the first phase is on increasing human compliance with the system (i.e. making sure that officials upload accurate, complete and timely information and running a permanent audit programme on the information uploaded). It will also focus on marketing the system to suppliers, and developing operational changes that resolve some of the system’s most pressing challenges, that is, reducing the opportunities for corruption (i.e. providing data to focus audits on procurement, and setting up mechanisms to make it possible for whistle-blowers to come forward if necessary).
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Phase 2 – Open Data Friendly System: the second phase, which will cover a three-year period from the end of Phase 1 (2018-2020) will involve a transition to an open data system, changing the way in which data is entered into the system. The goal is to safeguard the integrity of the information in the system, and allow stakeholders to use the data more easily.
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Phase 3 – Fully Integrated Transactional System: the third phase, starting at the end of Phase 2 (2020-2027), will make the transition to a fully transactional system. It will link with contracting authority platforms and allow oversight of the full procurement cycle.
Multiple levers can be used to implement changes to CompraNet and the wider procurement system
Changing how procurement professionals operate, particularly when using an e-procurement system, does not necessarily require legislative reform. Many different levers can be employed, each with different levels of flexibility. Many operational changes within the system may be instituted without the need for new legislation.
Of the levers available to Public Procurement Authorities or Central Purchasing Bodies (CPBs) to drive procurement reform, legislation is the least flexible option, although it is typically used to implement it. A report by the United Kingdom’s National Audit Office says regulation “can also create costs for businesses, the third and the public sectors. It can, if overused, poorly designed or implemented, stifle competitiveness and growth” (National Audit Office, 2014[3]). Where regulations are used, tools such as regulatory impact analysis (RIA) and consultation can be used to measure the likely benefits, costs and effects of new regulation and examine changes to existing ones (OECD, 2005[4]).
Source: Courtesy of G. Burr; Chile Compra.
Furthermore, in addition to the impact analysis conducted in advance of legislation, the evaluation of existing laws and regulations through ex post impact analysis is necessary to ensure that they are effective and efficient. The overall burden of complying with regulations tends to increase over time, complicating the daily life of citizens and impeding the efficient operation of business. Ex post evaluation can be the final stage of the regulatory policy cycle, evaluating the extent to which regulations meet the goals they were designed to achieve. It can also be the initial point for understanding the impact, shortcomings and advantages of a policy or regulation, and provide feedback for the design of new regulations. This process could be a beneficial exercise in advance of the forthcoming review of Mexican procurement legislation (OECD, 2014[5]).
Weighing the technology purchasing option that offers the best long-term solution
It is important to note that the Roadmap does not seek to determine at what point (or whether) CompraNet should be migrated to a new platform, and whether the platform should be developed in house, developed externally or bought as an “off-the-shelf” system. This decision will require an analysis of the cost of each option and the capacity for upgrading the current platform in line with the recommendations in the Roadmap.
According to Gartner’s Magic Quadrant eSourcing report of 2015, which evaluates supplier trends in the e-procurement market, 81% of organisations providing input to the report deploy multitenant Software as a Service (SaaS) (a single instance of software running on a server and serving multiple parties). Fourteen percent use a system stored within a private cloud and the remaining 5% have their own, stand-alone installation on the premises (Gartner, 2015[6]). This demonstrates the extent to which SaaS is the most prevalent form of application for organisations selecting e-procurement applications.
Each form has different advantages and disadvantages, depending on the context and requirements of the organisation. A thorough cost/benefit analysis should consider all possible deployment options.
A diverse programme of work will require individuals with specialised skills
To date, the CompraNet project has demonstrated a commitment to establishing effective governance involving multiple stakeholders. This approach should be continued, to ensure that the project has suitable direction and oversight. However, given the multitude of changes (in terms of behaviour, culture, processes, roles, etc.) that a new or heavily amended system would introduce, the team set up to deliver the CompraNet Roadmap should consider structuring delivery within a “programme” as opposed to a “project” structure.
The Roadmap calls for a number of phases, some of which involve activities outside CompraNet (for example establishing training programmes for suppliers and developing template tender documentation). According to the United Kingdom’s government-designed project management discipline, PRINCE2, a project represents a single effort, whereas a programme is a collection of projects that form a cohesive package of work.
To be successful, the programme will require the involvement of a number of different roles in various areas of specialisation. For example, a major system change, such as implementing a universally recognised standard for the classification of goods and services, is likely to have implications for legal aspects, human resources and processes. This must be managed carefully by individuals with the requisite expertise, including experts in managing change within organisations.
A number of activities will require ongoing delivery, both during and after the programme. For example, initiatives to develop capacity will need to be continuously delivered and modified, depending on the state of the system. With each change to the system or processes, system handbooks, guidance and training modules will need to be updated. Given the importance of the capability of users in working with the system, an ongoing system training programme is a worthwhile investment.
Roadmap actions
The actions outlined in the above Roadmap take into account the assessment of the current situation, the future activities of SFP in amending the CompraNet system, and the framework for the implementation of e-procurement systems. The table of Roadmap Actions presented below outlines the time frame in which the Roadmap suggests implementation, a description of each initiative and a short title for easy reference. Note that actions are aligned with Subgroup titles. However, some of the recommendations suggested by multiple Subgroups may have been consolidated into one action. Some actions may have been amended or removed, depending on the recommendations of this report based on international best practice. Recommendations are listed chronologically according to each Subgroup’s alignment and the proposed term of implementation.
Each action is assessed against four “dimensions”, which consider the types of changes necessary to implement the action. The four dimensions are: “Tech” – Technology, “Process” – Processes, “Legal” – Legislation and Regulation, and “Gov” – Governance, Structure and People.
References
Animal Politico (2017), La Estafa Maestra: Graduados en desaparecer dinero público,
Asian Development Bank (2013), e-Government Procurement Handbook,
Bolongaita, E. (2017), Mandate without means: Strengthening the OECD Anti-Bribery Convention, Carnegie Mellon University, Australia,
Cejudo, G. (2012), Evidence for Change: The Case of Subsidios al Campo in Mexico,
Coordinación de Estrategia Digital Nacional (National Digital Strategy Coordination) (2017), Datos abiertos en la agenda anticorrupción,
Deloitte (2017), “Growth: the cost and digital imperative The Deloitte Global Chief Procurement Officer Survey 2017”,
EBRD; UNCITRAL (2015), Are you ready for eProcurement?, European Bank for Reconstruction and Development; United Nations Commission on International Trade Law,
El Financiero (2017), Gobierno prepara programa para encontrar 'fantasmas' en licitaciones,
Handfield, R., J. Yacura and B. Soundararajan (2017), “How Governance of Data and Technology Drive the Intelligence Spectrum in Supply Chain and Procurement”,
Heggstad, K. and M. Frøystad (2011), The basics of integrity in procurement,
Howson, C. (2010), Ease of Use and Interface Appeal in Business Intelligence Tools, March 22,
OECD (2010), “Collusion and Corruption in Public Procurement”,
OECD (2011), E-procurement, Brief 17, SIGMA-OECD.
OECD (2011), “Competition and Procurement”,
OECD (2014), “Recommendation of the Council on Digital Government Strategies”,
OECD (2015), “Effective Delivery of Large Infrastructure Projects: The Case of the New International Airport for Mexico City”.
OECD (2015), “OECD Recommendation of the Council on Public Procurement”,
OECD (2015), “Compendium of Good Practices for Integrity in Public Procurement: Meeting of the Leading Practitioners in Procurement”.
OECD (2016), 2016 OECD Survey on Public Procurement.
OECD (2016), “The Korean Public Procurement Service Innovating for Effectiveness”,
OECD (2016), “Towards Efficient Public Procurement in Colombia: Making the Difference”,
OECD (2016), “Putting an End to Corruption”, Vol. 3/33,
OECD (2017), “Development and implementation of a national e-procurement strategy for the Slovak Republic”,
Open Contracting Partnership (2017), Open Contracting Partnership Showcase Projects - Ukraine,
Open Contracting Partnership (2017), The Open Contracting Journey: Step-by-Step,
PwC; Ecorys (2013), “Identifying and Reducing Corruption in Public Procurement in the EU”,
Shkabatur, J. (2012), “Transparency with(out) accountability: Open government in the United States”, Yale Law & Policy Review, Vol. 31/1,
Subsidios al Campo (2017), About this project,
United Nations (2006), UN Procurement Practitioner's Handbook,
The development of a shared vision statement for Mexico’s e-Procurement system (CompraNet) was proposed by members of the Subgroups. The Subgroups led the initiative to develop a document that could serve as a guide for the future state of CompraNet, by declaring a list of strategic objectives for Mexico’s federal e-Procurement system to achieve in the coming years. From its origin, the document was treated as a collaborative product that every Subgroup member could agree upon; this practice was in line with the spirit of collaboration that was a foundational principle of the Working Group. All Subgroups agreed on this initiative, and a first draft of the vision statement was prepared soon after. In total, five draft versions were developed from July to October 2017, and a final statement was presented for the Working Group’s consideration during the sixth Plenary Meeting. The final vision statement received a unanimous vote; the document is included in Chapter 1 of this Review (see Box 1.6.).
The first draft document included a list of 50 desired strategic objectives for Mexico’s e-Procurement system. The main objectives of this first draft were kept throughout all draft versions and the final vision statement, which related to an e-Procurement system that:
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can be used by all levels of government (federal, state and municipal)
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includes all procurement processes, regardless of the contract awarding method (direct award, restricted invitation, public tender or other extraordinary award methods, such as Article 1 exemptions).1
On 26 July, the OECD as Technical Secretariat of the Working Group took on the task of co-ordinating the development of the vision statement and managing the draft versions, to include comments from the Subgroups and Mexico’s Ministry of Public Administration (SFP). On 23 August, a second version of the draft was shared with SFP, and comments were received from the Unit for Public Procurement Policy (UPCP) and the Unit of Open Government and International Co-operation Policies (UPAGCI). Suggestions from SFP’s units were included in a third draft version and shared with Subgroups for a further review on 6 September. From 7-11 September, the Technical Secretariat received comments on the draft vision statement from Mexico’s Institute for Competitiveness (Instituto Mexicano para la Competitividad, IMCO), the local chapter of Transparency International (Transparencia Mexicana), México Evalúa, and the Business Co-ordinator Council (Consejo Coordinador Empresarial). This combined effort between Subgroups and SFP resulted in the fourth draft of the vision statement, which was shared with SFP on 14 September. The fourth version included a condensed list of 12 strategic objectives for Mexico’s e-Procurement system (reduced from the 50 originally proposed).
After SFP’s review of the fourth draft version on 18 September, the Technical Secretariat shared a final draft version with the Subgroups and SFP on 2 October. Remarks from México Evalúa and SFP’s UPAGCI were incorporated, and a fifth draft version was distributed to attendees before the sixth Plenary Meeting on 9 October. During the sixth Plenary Meeting, the Technical Secretariat presented the final draft version of the vision statement for the Working Group’s consideration. After only one minor suggestion by the Business Co-ordinator Council, the document obtained unanimous support, which resulted in a request to the Technical Secretariat to include the final version in the OECD Review of the Mexican e-Procurement system.
As part of the collaborative work undertaken by the Working Group, from February to July 2017 each Subgroup developed a series of recommendations for the expansion and improvement of CompraNet. Recommendations were developed in four steps: information gathering, information analysis/diagnosis, recommendation development (using a standardised format agreed upon by all Subgroups), and recommendation aggregation by the Technical Secretariat. In total, 21 recommendations were considered for this Review.
Steps 1 and 2: Information gathering and diagnosis of the current state of CompraNet
During the first Plenary Meeting, held on 28 February 2017, the Working Group defined a working timetable that involved each Subgroup developing a diagnosis based on the evidence they collected on the current state of CompraNet. These diagnoses, which were then shared by every Subgroup during the third Plenary Meeting on 8 May 2017, were developed using different information sources, such as ad hoc surveys (applied to suppliers, procurement officials and CSOs), document reviews, personal interviews, institutional questionnaires and data analyses. Each Subgroup was free to choose the information-gathering methods that best suited its needs.
The main methods used by Subgroups for gathering information – as inputs for their diagnoses – were as follows:
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Document review of previous works on public procurement by Mexican and international organisations such as Transparencia Mexicana, México Evalúa, Mexico’s National Institute on Statistics and Geography (INEGI), the World Bank, the European Commission, and the OECD.
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Ad hoc electronic surveys prepared for businesses (suppliers), public officials, CSOs and journalists. Each e-survey had its own response rate and number of valid answers considered for analysis: suppliers (50 responses), public officials (148 responses), and CSOs and journalists (5 responses each).
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A paper-based questionnaire addressed to different institutions (COFECE, the Superior Audit Body, and the Co-ordination Unit of Internal Control Bodies of the SFP) was included as part of the information-gathering efforts.
Electronic surveys were one of the most relevant sources of information, as they were designed to reach a broad audience of stakeholders, mainly suppliers and public officials. Some of the main insights obtained through these surveys are:
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Suppliers: i) SMEs are less likely than large businesses to be awarded a contract.2 ii) SMEs find CompraNet system functions more difficult to use than large businesses.3 iii) SMEs are offered considerably fewer opportunities for training and capacity building in the use of CompraNet than large businesses.4 iv) Bid opportunities, award decisions and clarification meetings are considered by suppliers to be the categories where information in CompraNet is most useful, accessible and adequate. Complaints and audits are ranked last against these measures (see Table B.1). v) One-third of businesses argue they have been victims of corruption but have not filed formal complaints because of a lack of trust in investigating authorities or because they consider the complaints process to be inefficient for whistle-blowers.5
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Public officials: i) The smaller the procurement unit, the more likely it is for procurement officials to consider electronic storage of procurement documents to be of the same legal standing as maintaining physical archives.6 ii) Procurement officials use CompraNet for some steps of the procurement process more than others, i.e. request for bids are more commonly uploaded to the e-Procurement tool than bid evaluations;7 iii) Large and medium procurement units have received considerably more training for the use of CompraNet than small procurement units.8 iv) Smaller procurement units consider CompraNet to be less effective in reducing integrity risks on public procurement.9
Based on the results of these diagnoses, each Subgroup was asked to develop a list of recommendations for the expansion and improvement of CompraNet. Subgroup recommendations were expected to acknowledge the current state of CompraNet and address current areas of opportunity to advance Mexico’s e-Procurement system.
Step 3: Recommendation development
For the formal proposal of recommendations for the expansion and improvement of CompraNet, the Subgroups agreed on the use of a standard format. This format, the Single Format for Observations and Recommendations (SFOR) was first suggested by the Subgroup Interaction with Suppliers co-ordinated by CCE and CONCAMIN (Confederation of Industrial Chambers – Confederación de Cámaras Industriales). The idea to develop a SFOR document was presented to all Working Group members during the third Plenary Meeting on 8 May 2017. On 15 May, the Technical Secretariat shared a first draft for the SFOR template document with the SFP for comments and suggestions, and the Technical Secretariat then shared the revised template draft with Subgroups for comments on 26 May. The SFOR template was agreed upon by all Subgroups, and a clarification meeting between all group co-ordinators regarding the filling of the template document was held on 1 June. The main characteristics and components of the SFOR template document are as follows:
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includes a cost-benefit analysis as well as an analysis on legal changes that could result from the implementation of the proposed recommendations;
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provides a section for the description of the justification considered by each Subgroup for the development of recommendations.
Subgroups shared their final SFOR documents with the Technical Secretariat on 12 June. In total, 30 SFOR documents and 51 recommendations were received (Subgroups were free to develop a single SFOR document for each recommendation, or to group several in a single SFOR document).
The Technical Secretariat received the following recommendations from the Subgroups:
Step 4: Recommendation aggregation by the Technical Secretariat
Once the SFORs were shared with the Technical Secretariat, the OECD undertook an aggregation analysis on the 51 recommendations received. These recommendations varied, covering a wide range of issues that were later grouped into 21 general themes. The results of this frequency analysis identified two main topics that were prevalent throughout most of the SFORs:
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broad document and information disclosure for the complete procurement cycle (end-to-end information)
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development of, and strict general compliance with, open-data standards for the classification of goods and services (similar to the existing Single Classifier for Public Procurement, CUCOP).
Recommendations were aggregated by the Technical Secretariat and shared with the Working Group on 18 July 2017, during the fifth Plenary Meeting. From the Technical Secretariat’s analysis, the original 51 recommendations were grouped into 21 categories. All recommendations expressed by Subgroups are considered within the Technical Secretariat’s shortened version. The analysis also indicates the frequency with which each recommendation was mentioned within all SFORs received, as well as the total number of Subgroups that address each issue. Results of the aggregation analysis are illustrated below.
Notes
← 1. Contracts entered into between contracting authorities and other contracting authorities or state-owned entities (for example, universities), under what is known as an Article 1 exemption (Article 1, fifth paragraph, LAASSP & Article 1, fourth paragraph, LOPSRM), are not required (nor allowed) to be entered into CompraNet.
← 2. Contract awards for businesses actively using CompraNet during the last five years, by size of business: micro (43% of micro businesses have not been awarded at least one contract during the last five years), small (44%), medium (25%), big business (6%).
← 3. Ease of use for the different system functions included in CompraNet, by size of business: micro (29% of micro businesses consider CompraNet functionalities easy to use), small (44%), medium (50%), big business (88%).
← 4. Training and capacity-building opportunities for the use of CompraNet, by size of business: SMEs (33% of SMEs have been offered training and capacity-building opportunities for the use of CompraNet), big business (75%).
← 5. Reasons for not filling formal complaints using SIDEC (SFP’s complaint system) against public officials in cases of corruption on public procurement processes: there was no case of corruption to complain about (69%), there was at least one case of corruption to complain about, but businesses do not trust the investigating authorities or consider the complaint process to be inefficient for whistle-blowers (31%).
← 6. Legal validity of electronic archives vs. physical archives for procurement documentation: small procurement units (6.5% of procurement officials at small procurement units consider physical archives to have more legal validity than electronic archives), medium units (13%), large units (17%).
← 7. Use of CompraNet for different steps of the procurement process: request for bids (95% of procurement officials say they use CompraNet for this step), opening of bid proposals (82%), clarification meetings (79%), bid evaluation (61%).
← 8. Sufficient training for the use of CompraNet: small units (58% of procurement officials at small procurement units consider they have not received enough training for the use of CompraNet); medium and large units (46%).
← 9. Based on your experience, has CompraNet had, or not had, effects on integrity risks on public procurement vs. face-to-face methods? By unit size: small units (42% of small procurement units consider CompraNet has had no positive effects on integrity risks compared to previous face-to-face methods), medium and large units (13%).