Here’s How World Bank Reformed Public Procurement in Bangladesh

When it comes to public procurement, there are many complex challenges which need to be overcome before meaningful reform can occur. The involvement of multiple and numerous stakeholders – often with widely conflicting interests and priorities – can create a situation where it’s nigh impossible to create a system which works for everyone.

Compounding these factors are organizations’ often natural tendency towards conservatism, driven by fear and resistance to change and a "we’ve always done it this way mentality,” which anyone in business will tell you is one of the most potentially damaging sentences you can utter.

However, fighting on the front lines of public procurement means preparing for and properly managing disruption, and this is precisely the challenge World Bank found itself facing when it sought to overhaul public procurement in the south-east Asian country of Bangladesh.

World Bank

As an international financial institution responsible for providing loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects, World Bank was ideally placed to reform public procurement in Bangladesh and better equip the country to compete in the realm of digital procurement and effectively manage disruption.

"The World Bank-backed project to establish an electronic Government Procurement Portal (e-GP) in Bangladesh is bringing the entire public procurement and contract management process online,” said World Bank in a press release. "The portal, part of a holistic reform of the country’s public procurement system, has cut costs, increased accessibility, efficiency, and transparency, and improved the ease of doing business in the public sector.”

Many critical elements needed to be established before World Bank could effectively achieve its goals. These needed to be addressed in an integrated manner with the full support of public officials and the bidding community. Building capacity among these cohorts was an essential part of the process of achieving public procurement reform in the region.

"It was essential to develop innovative technologies with sustainability models and create programs to promote knowledge, awareness, and participation among key stakeholders, including government officials at different levels, bidding communities, civil society, journalists, legal professionals, the private sector, financial institutions, and citizens at large,” added World Bank.

Instead of a single intervention and then leaving the country to fend for itself, World Bank instead opted for a strategy which will span a 15-year period and complete through three successive phases. Dubbed the Digitizing Implementation Monitoring and Public Procurement (DIMAPP) project, this sustained approach will have the advantage of providing opportunity for a deeper and longer engagement along with a more thoughtful design which allows reform phases to be carefully sequenced.

This strategy has also helped inspire buy-in from political leaders which will help sustain comprehensive transformation over the proposed reform period.

Results

Since establishing the DIMAPP, World Bank has already managed to achieve some impressive results in the Bangladesh region, including:

• Use of the e-GP platform has led to about 7% savings in procurement costs compared to manual paper-based procurement. Estimated savings for the year reached $1.1 billion.
• Procurement time for all tenders decreased from 100 days to just 57 days.
• 80% of Bangladesh’s public procurement expenditure is now processed through the e-GP system, compared to only 2% when the current phase of the project began in 2017.
• e-GP improved market access and the bidding environment compared to manual bidding. The number of registered bidders in e-GP increased from 23,000 to 96,446.
• The e-GP system has improved the integrity aspects of public procurement with features such as online submission and evaluation of bids, approval, and award of contracts, reducing external influences, preserving all procurement documents and transactions online for audit purposes, validating bidders’ information, and online submission and tracking of complaints.
• Whereas CPTU operates the e-GP system, about 1300+ public organizations/agencies, such as transport, energy, local government, and health sector agencies, are using it for their day-to-day procurement processes. They are deeply involved in the e-GP implementation process.
• An online citizen portal has been launched for public procurement and contract implementation monitoring. In addition, citizen engagement in contract implementation monitoring is taking place in 48 sub-districts with positive feedback.
• An estimated 50,000 tons of CO2 emissions are eliminated each year from drastically diminished use of paper documents and reduced travel.

As you can see, the reform put in place by World Bank is already showing resounding successes in almost every corner of public procurement process with predictions for the remainder of the testing period suggesting the upwards trend is likely to continue through 2023 and beyond.

Final Thoughts

Preparing public procurement for the disruptions of the modern marketplace is a lofty goal for an organization such as World Bank – especially in a country such as Bangladesh, where reforms are so desperately needed. We will be watching keenly to see how this story develops and discovering whether World Bank can sustain this reform over time.

Procurement reform which prepares for the disruption of the modern landscape is sure to be a hot topic at ProcureCon Connect 2023, being held in June, at the Rancho Bernardo Inn, San Diego, CA.

Download the agenda today for more information and insights.