copy the linklink copied!5. Strengthening public procurement capacity and enhancing the implementation of strategic procurement in Kazakhstan
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.
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
copy the linklink copied!5.1. Strengthening the use of complementary policy objectives
While efficiency and cost effectiveness are the primary objectives of public procurement, governments, recognising public procurement’s relevance and impact, are increasingly using it in a strategic way to pursue broader or complementary policy objectives, thus achieving sustainability and growth. . Sustainable procurement means that purchased goods, services and works that are acquire through the government for public service delivery, achieve value for money and generate benefits not only for the government, but also for the environment, society and the economy (Procura+, 2016[1]). Complementary objectives might include, but are not limited to, promoting sustainable growth, developing SMEs and supporting innovation, addressing climate change, increasing social responsibility and economic resilience. In fact, the vast majority of OECD governments increasingly use procurement as a policy lever to support such objectives (OECD, 2015[2]).
This chapter will look at the use of strategic procurement in Kazakhstan and identify ways in which the development of strategic procurement from an administrative to a strategic function can be strengthened. As this transformation requires highly skilled civil servants, the chapter will further identify strengths and weaknesses of the public procurement workforce in Kazakhstan and suggest ways of improving capacity and skills of public procurers.
Due to its increasing significance and strategic use, public procurement is highly relevant in the promotion of economic outcomes and sound public governance. OECD countries determine which complementary policy goals to focus on according to their individual national priorities. In almost all OECD countries, environmental considerations are included (OECD, 2017[3]). The wide use of strategic policies across OECD countries is displayed in Table 5.1. In most countries, policies and strategies are developed at the central level.
In Kazakhstan, there is a strong potential for increasing the use of complementary policy objectives through public procurement. So far, price remains the predominant award criteria and the country has no overarching governmental strategy for the inclusion of complementary policy objectives. Some considerations are made, but these do not cover the breadth of sustainability considerations in the area of public procurement.
The Law on Public Procurement (hereafter: PPL) includes limited provisions that allow for the inclusion of complementary policy objectives, relating to use of recycled material, supporting employment of persons with disabilities and that of detainees.
The provision on recycled material was introduced with the 2018 revision of the (hereafter: the 2018 amendments). A new clause now requires contracting authorities to prefer goods that were produced using recycled material from waste originating in Kazakhstan. Such preference has to be stated in the tender notice; suppliers have to provide proof of using recycled material (article 21, point 4-1.)
Employment of persons with disabilities and of detainees can be classified as social criteria, as it addresses social concerns. The PPL includes the following provisions relative to the achievement of the above mentioned ends, as inscribed in Article 39 and Article 51 of the PPL:
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the use of direct awards for the purchase of goods from associations of disabled persons, with a number of disabled employees of fifty percent or above,
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the use of direct awards for purchases of penal system institutions1 ,
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mandatory purchasing of certain goods, works and services from associations of disabled persons of the Republic of Kazakhstan, mostly items for disabled needs (for example blind aids, special vehicles, etc.)2
Another measure that allows for a limited inclusion of non-price criteria are conditional discounts (see Chapter 2 for additional details.) Conditional discounts are special criteria that affect the price of a bid, reflecting non-price criteria. Conditional discounts are deducted from the price offer as a percentage of the initial price of a bid. Article 21 point 4 of the PPL sets out that in order to determine the best offer, the following criteria are to be included: experience in the market, proof of technical specifications, certified quality management systems according to national norms, environmental certificates that certify the compliance with environmentally friendly product standards. These criteria can be included in the price-calculation, in form of a discount. However, practitioners reported in the interviews during fact finding missions that price remains the predominant criteria.
While many OECD countries have adopted measures to ensure that SMEs have access to public procurement opportunities, SME participation in is not a criterion that is taken into account as a complimentary policy objective by the PPL in Kazakhstan. Stakeholders reported that SME participation in public procurement in Kazakhstan is already sufficiently high. According to the Ministry of Finance, in the first nine months of 2017, SMEs accounted for 72% of public procurement volume. Therefore, policy makers consider that there is no need for a specific policy measure to support the participation of SMEs in public procurement.
The support of SMEs is integrated into procurement policies in most OECD countries. The most widely used approach to support SME access to public contracts is the division of contracts into lots, as displayed in Figure 5.1. Additional measures of support commonly used by OECD countries are practical guidelines, as well as dedicated trainings to support SMEs in public procurement (OECD, 2017[3]). Central policies are often accompanied by detailed guidance on how to implement them. Specific legislative provisions are also employed to take considerations such as energy efficiency, environmental considerations or life-cycle costs in procurement.
Note: *e.g. set-aside, bid-preferences
Source: OECD (2017[3]), Government at a Glance 2017, OECD Publishing, Paris, https://doi.org/10.1787/gov_glance-2017-en.
To encourage the integration of complementary policy objectives, the OECD Recommendations of the Council on Public Procurement suggest the development of an overall strategy on the inclusion of secondary (complementary) policy objectives, further detailed in Box 5.1.
Principle 4 – Balancing the use of public procurement to pursue secondary policy objectives against its primary objective
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.
Source: http://www.oecd.org/gov/ethics/OECD-Recommendation-on-Public-Procurement.pdf.
As reflected in the Recommendation in the principle on “Balance”, an appropriate strategy should be developed to determine which complementary policy objectives are to be pursued and how they can be integrated. To ensure that complementary policy objectives are taken into consideration, many OECD countries employ monitoring mechanisms and set quantified targets for the objectives. As reflected by the title of this principle (“balance”), part of a sustainable procurement strategy is to balance the different impacts of sustainable procurement: 1) economic impact, 2) environmental impacts, and 3) social impacts. A common misconception in this context is that pursuing one aspect will result in negative outcomes in another, for example that improving the environmental footprint of a purchase will result in higher costs. However, practical application in many OECD countries and beyond have demonstrated that a win-win-scenario can often be the more likely outcome. A recent example is a procurement project from the UK, where light bulbs in the London Underground were replaced to more environmentally friendly bulbs, while at the same time achieving cost savings of 25% (see Box 5.2).
Transport for London (TfL) sought to update the lighting system in the London Underground in 2015 as part of a wider push to reduce London’s CO2 footprint. As part of this effort, TfL also identified the high maintenance expenses of the traditional lightning as a target for cost savings.
The procurement project was able to combine both goals – economy and environmental friendliness – successfully. In fact, the process proved so successful that has been expanded to other procurement needs.
The management of the procurement process included the following success factors:
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Early market engagement strategy with three effects: 1) allowing procurers to acquire the necessary technical knowledge to draft performance-based technical specifications, 2) sparking interest for innovation in the market, 3) increasing competition and with that improving value for money.
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Examining costs of the whole lifecycle of the product, including 1) how these Whole Lifecycle Costs (WLC) differ for the same product installed in different location, 2) a range of different costs beyond unit price, e.g. maintenance, energy use, installation, etc.
An analysis of options according to these two aspects revealed that:
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1. the biggest savings were not from unit costs or costs of materials, but rather from elements along the lifecycle of a product, such as maintenance.
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2. energy-efficient lighting options offered as much as 50% savings compared to the commonly installed (non-energy-efficient) option
Source: Procura+ (n.d.), Innovative lighting procurement for London's Underground network, http://www.procuraplus.org/fileadmin/user_upload/Procura__case_studies/Procuraplus_case_study_Transport_for_London.pdf.
To use public procurement as a means to achieve strategic objectives, it is crucial to define the ends that shall be achieved, and how these should be balanced. Kazakhstan currently has no overarching strategy that specifies these objectives. Systematising strategic objectives can be a first step to understanding and defining strategic priorities.
The inclusion of complementary policy objectives is also related to the capacity of the public procurement workforce. If contracting authorities are understaffed, procurement officials have less time to consider additional policy objectives. To go beyond procurement as an administrative function, public servants also need to be sufficiently skilled. The strategic use of public procurement is more time-consuming than the administrative use of public procurement, as it necessitates the capacity to identify and analyse strategic aspects. Kazakhstan’s civil servants, however, report that they frequently work overtime (ACSH, 2018[4]). Increasing the capacity of public servants is important to allow for the use of public procurement as a strategic tool.
The following part of the chapter will examine the public procurement workforce in Kazakhstan in more detail and how the workforce can be professionalised to meet the needs of a procurement function that goes beyond administrative work.
copy the linklink copied!5.2. Enhancing capacity development in the public procurement workforce in Kazakhstan
To integrate strategic concerns into public procurement successfully, it is not sufficient to include complementary policy objectives into the legislation. The strategic use of public procurement requires procurers to take strategic decisions as part of their working routine. Therefore, a skilled public procurement workforce is essential to ensure the efficient and effective use of public resources in public procurement. As countries place increasing demands on public procurement, the role of the procurers becomes all the more important. To prepare procurement professionals for this task, capacity development is an essential element for Kazakhstan to use public procurement in a more strategic way. Developing a skill set of public procurers allows for targeted training and HR management.
5.2.1. Understanding the institutional framework of capacity building
Kazakhstan has a solid institutional framework of capacity building in place. The two main bodies responsible for capacity building and training of civil servants are the Ministry of Finance and the Agency for Civil Service Affairs and Anti-Corruption, as displayed in Figure 5.2. The Agency for Civil Service Affairs and Anti-Corruption is directly subordinated to the President of the Republic of Kazakhstan (OECD, 2018[5]).
Source: OECD Secretariat.
The Agency for Civil Service Affairs and Anti-Corruption is responsible for a range of activities around capacity that include (OECD, 2018[5]):
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providing leadership and guidance on human resource management;
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developing and implementing the HR strategy;
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providing advice on the legal framework in this area;
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transmitting public service values;
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standardising recruitment,
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managing employment and defining skills profiles;
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providing training;
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and identifying performance management indicators.
The same structure is prevalent in most OECD countries, as displayed in Figure 5.3 below.
Source: OECD (2016a), “Survey on Strategic Human Resources Management in Central/Federal Governments of OECD Countries”, OECD, Paris.
The law in Kazakhstan establishes clear responsibilities with respect to the responsibility for capacity development in public procurement. The Ministry of Finance is the authorised body regulating the public procurement system and it is equally responsible for developing the rules of training and skills development. According to the PPL, the role of the Ministry of Finance is to approve rules for retraining and advanced training of employees engaged in public procurement (article 16, point 8). The 2018 revision expanded the explicit responsibilities of the Ministry of Finance on training, stating that the Ministry of Finance develops and approves guidance (article 16, 11-2).
5.2.2. Understanding capacities in the public procurement workforce across governmental bodies
Capacity of the public procurement workforce has two aspects to it: the capabilities of public procurers and the amount of public officials that work on public procurement. Both aspects provide insights on the structure of the public procurement workforce.
The overall number of civil servants in Kazakhstan amounts to 98 499, according to the Monitoring Report of the Agency for Public Service and Anti-Corruption released in 2018 (Agency for Public Service and Anti-Corruption, 2018[6]).
Kazakhstan has different categories of civil servants, Corps A, Corps B and political staff. The differentiation between Corps A and Corps B has been introduced by the amendments of the 1999 Civil Service Law that came into force in 2013. Corps A consists of civil servants with a certain level of seniority in leadership positions. Corps B includes middle managers and other lower-level staff. Political staff are defined as civil servants that have been elected into their position (Civil Service Law Article 1).
The monitoring report of Kazakhstan’s Agency for Public Service and Anti-Corruption takes stock of the number of civil servants employed in the different staff categories, as displayed in Table 5.2. (Agency for Public Service and Anti-Corruption, 2018[6]). In total, Kazakhstan’s civil service employs almost 100 000 persons; the vast majority are staff in Corps B (almost 98 000). In comparison to 2017, the number of Corps A staff has decreased by more than one third, from 519 to 279 civil servants, while the number of Corps B staff remained largely the same. The decrease in staff number has been stronger for central level entities, from 207 to 63 civil servants, than for local state bodies, from 296 to 216 civil servants (Agency for Public Service and Anti-Corruption, 2017[7]). The Monitoring Report does not provide information on the extent to which the capacity in different staff categories is adequate, nor does it explain why the number of staff in certain groups of civil servants has been increased or decreased (Agency for Public Service and Anti-Corruption, 2018[6]).
Most OECD countries have an HR planning scheme in place to ensure the workforce has an adequate capacity to deliver the necessary services. Kazakhstan is one of the countries that does not have regular workforce planning processes in place, as displayed in Figure 5.4. Workforce planning can help to anticipate future developments and to react to changing needs of the public service in a cost-efficient manner (OECD, 2018[5]).
Note: Slovak Republic: a new Civil Service Law entered into force on 1st June 2017, introducing major changes in existing human resources management practices. For this reason, data may no longer reflect the current situation in the country.
Source: OECD (2016), “Survey on Strategic Human Resources Management in Central/Federal Governments of OECD Countries”, OECD, Paris.
The Assessment of Human Resource Management Performance in Government Bodies of the Kazakhstan of the Regional Hub of Civil Service in Astana (ACSH) and the United Nations Development Programme (UNDP) suggests that capacity with respect to the amount of civil servants is an issue in the public administration of Kazakhstan. The assessment showed that in 2015 the amount of excessive hours Kazakhstan’s civil servants worked was on average one hour and 16 minutes more than stipulated in their contracts, as displayed in Table 5.3 (ACSH, 2017[8]). Systematic overtime can be a sign of insufficient capacity, or it can point to inefficient workforce planning and management (ACSH, 2017[8]).
In-depth interviews with public servants carried out by the Astana Civil Service Hub reveal the importance of well-managed human resource planning. Excessive working hours were the third most mentioned obstacle to motivation described by respondents (ACSH, 2018[4]).
As official data on the public procurement workforce are not available, Table 5.4 provides staff numbers based on the interviews conducted with civil servants. The amount of civil servants that work on public procurement ranges in the different bodies ranges from one to 12.
The latest revision to the PPL increased the centralisation of public procurement and gave more responsibility to all single organisers, including to Akimats (local administrations) in the regions. While the Government Procurement Committee of the Ministry of Finance became the single organiser at national level, the procurement departments of Akimats shall perform this role at regional level. If the role of Akimats will be strengthened, the pressure on the procurement workforce will increase. Independent of this particular law, respondents from Akimats mentioned in OECD interviews that regular amendments of the public procurement legislation increase their workload as they have to adapt their practices to these frequent amendments.
Conducting a detailed needs assessment of the public procurement workforce could help to identify where public procurers are in need of increased capacity. Kazakhstan is well above the OECD average with respect to the collection of administrative data, as displayed in Figure 5.5. These data provide a strong potential for further analysis of procurement capacity.
Note: The index on the collection and availability of administrative HR data measures the existence of the following administrative data records at the central/federal level: number of employees; level; function; age; gender; disabilities; other minority status; level of education; length of service; languages spoken; type of contract; union membership; part-time work; other flexible working arrangements; total sick days used; training days used; special leave used; mobility within the civil service; staff turnover; retirements; resignations; and dismissals. The index ranges from 0 (low level of data collection at central level) to 1 (high level of data collection at central level). Missing data for countries were estimated by mean replacement.
Slovak Republic: a new Civil Service Law entered into force on 1st June 2017, introducing major changes in existing human resources management practices. For this reason, data may no longer reflect the current situation in the country.
Source: OECD (2016), “Survey on Strategic Human Resources Management in Central/Federal Governments of OECD Countries”, OECD, Paris.
Additional data could also help to draw a more accurate picture of the strengths and weaknesses of the procurement workforce.
5.2.3. Strengths and weaknesses of the public procurement workforce
The development of a capacity development scheme or a training strategy is most effective when adapted to the training needs. Identifying strengths and weaknesses of the public procurement workforce can be a useful first step to understand in which areas capacity building is needed. In Kazakhstan, potential for increasing capacity of the public procurement workforce exists at central and regional level. The comparatively large amount of administrative data collected in Kazakhstan provides opportunities for a thorough analysis.
To adapt existing training and capacity building measures to the needs of the public procurement workforce, identifying strengths and weaknesses can shed light on priority areas and less important aspects.
Civil servants in Kazakhstan have diverse educational backgrounds. As public procurement requires different skills, diverse backgrounds can be an advantage. Most civil servants with a higher education degree have studied economics or business (37.5%) or Law (25.3%), as displayed in Figure 5.6. Other common fields of studies are Technical Sciences and Technology (9.3%) or Education (7.5%). While there are no data available on public procurement, in the interviews with procurers, most reported to have a similar educational background. The most common fields of studies were also economics, business and law. This diversity of educational backgrounds can be a strength as it covers a large number of different skill sets that are required in public procurement.
Note: Percentages are out of a total of 91.8% of civil servants with a higher education degree.
Source: (Agency for Public Service and Anti-Corruption, 2018[6]).
Another strength is the availability of administrative data. Kazakhstan is well above OECD average with respect to collection of administrative data at central level as displayed in Figure 5.5. These data can serve to inform training plans and to assess capacity needs (OECD, 2018[5]). Judging from the information freely available, administrative data are not used to the extent possible to advance training schemes, capacity development or HR planning.
There are equally a number of weaknesses that provide opportunities for improvement. With respect to education, there is no particular career path for public procurers. The public procurement function is not regarded as a profession and there are no specifically dedicated university programmes on public procurement in Kazakhstan.
Another weakness is that promotions are not perceived as merit-based and the perception has evolveded towards a more negative perception over the last years. The Assessment of Human Resource Management Performance in Government Bodies of Kazakhstan of the ACSH and UNDP shows a downward trend in promotion of employees (ACSH, 2017[8]). While in 2012 the promotion indicator was still at 69%, it decreased to 38% in 2015 (ACSH, 2017[8]). Additionally, many public servants mentioned in a survey carried out by the Astana Civil Service Hub that they feel that promotions are not merit-based. The respondents raise that to sustain long-term motivation and ensure an inflow of talented graduates to the public sector it is important conduct serious performance appraisals and transparently communicate their use (ACSH, 2018[4]).
According to stakeholders, procurers with up-to-date, relevant and specialised technical skills are few. Suppliers reported that they detected errors in technical specifications that are interpreted as the result of insufficient technical knowledge. This perspective is supported by the high number of procurement processes that see an amended of the procurement documents following comments from suppliers. According to stakeholders, contracting authorities have been relying on external expertise in drafting specifications.
Additionally, civil servants in general and public procurers in particular describe excessive work hours as an obstacle. Civil servants also deplore that training opportunities are not sufficiently available or do not cover the training needs (ACSH, 2018[4]).
Identifying strengths and weaknesses can be a useful exercise to develop tailored capacity building measures. For instance, Kazakhstan could prepare an analysis of skills gaps and a matching training needs analysis. The results of these exercises could be used in designing, developing and delivering professionalisation strategies, with an adequate range of measures suitable for Contracting Authorities’ staff and procurement officers.
5.2.4. Strengthening existing training and capacity building measures
Adequate training is crucial to equip procurement professionals with the multidisciplinary skills necessary to fulfil their tasks. In Kazakhstan, regular training is compulsory for public servants. The Ministry of Finance, through its subordinate organisation “Centre for Electronic Commerce”, provides trainings to civil servants from Contracting Authorities. These trainings usually cover legal provisions as well as practical instructions on how to use the e-procurement system. However, public servants do not feel sufficiently trained to carry out the public procurement function. The coverage of annual trainings sessions from the “Centre for Electronic commerce” appears very modest compared to potential needs (23 194 procuring entities) (OECD, 2017[10]).
In Kazakhstan, training is compulsory for Corps B civil servants once every three years. Unless civil servants receive an unsatisfactory performance assessment. In this case, they have to complete additional training hours. On average, civil servants attend on average one to three trainings a year (OECD, 2018[5]). The Ministry of Finance established rules for advanced training of public procurement officials per ministerial order (Order № 697 adopted on 28 December 2015)3. These rules include the following provisions:
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Training and professional development of public procurement officials is carried out by educational institutions.
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Educational organisations develop and approve training programs for retraining and professional development of specialists.
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The curriculum needs to include the following elements:
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Development and approval of tender documentation, technical specifications and other documentation used in the public procurement process.
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A practical course on reviewing requests from individuals and legal entities concerning the clarification of specific provisions of public procurement legislation.
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A practical course on the main the main aspects of compliance audit in the field of public procurement.
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At least 50% of the total number of training in the curriculum should be dedicated to the practice of organising and conducting public procurement, involving practitioners that are involved in the procurement process as well as public servants of governmental agencies that oversee procurement procedures.
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Educational organisations need to attract specialists from state bodies, academia and knowledgeable individuals with at least two years of experience in public procurement.
The Rules apply to public entities and agencies as well as other organisations with a public share of 50% or more. The provisions are quite unspecific in some areas. For example, they do not specify which institutions would qualify as “educational institutions” and how “specialists” are defined. Further clarifying these elements in a training strategy would be beneficial for the law to be implemented in the way it was intended.
The rules include details about the training, such as the entity that carries out the training, elements that are to be included in the curriculum and the provider of the training. The case of the UK illustrates a good practice in this area, choosing a collaborative approach to curriculum development, as further detailed in Box 5.3. To ensure that the perspectives of different stakeholders in the procurement process are reflected in the procurement training, the UK civil service organised informal network meetings involving different departments.
As part of the civil service reform, civil servants are invited to join one of the 25 professional (informal) networks, including one on procurement. The networks are led by the respective head of profession. According to the UK civil service website, the procurement profession’s network is focussing on the following areas:
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increase in the procurement volume managed centrally
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sustainable savings through corporate social responsibility
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efficiency (notably in processes)
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access by SMEs
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increased professionalism
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technology to support procurement
The network also has a say in developing the curriculum for public procurers, aiming at increasing the professionalism of procurers throughout the administration. The curriculum is being developed in phases, being adapted as the training needs change. Training opportunities include formal training provided by Crown Commercial Services, as well as informal arrangements such as on-the-job training, coaching or mentoring. .
Source: UK civil service website on training and development: www.gov.uk/guidance/training-and-development-opportunities-in-the-the-civil-service and www.gov.uk/government/organisations/civil-service-procurement-profession/about (accessed on 1 February 2016).
Since 2010 the number of procurement professionals attending the trainings has increased, according to the Assessment of Human Resource Management Performance in Government Bodies of Kazakhstan found an increase in provided training (ACSH, 2017[8]). This applies both to government employees on the local and on the federal level, as displayed in Figure 5.7.
Note: coverage of government employees by professional development seminars, % of total; blue: training attendance at local level; red: training attendance at federal level.
Source: (ACSH, 2017[8]).
Training of civil servants in general is usually carried out by Kazakhstan’s main training institution, the “Academy of Public Administration under the President of the Republic of Kazakhstan” (APA). The APA also has he regional branches. The Academy of Public Administration under the President of the Republic of Kazakhstan (APA) was created in 2005 by merging three central training institutions: the Academy of Civil Service, the Academy of Diplomacy and the Academy of the Supreme Court (Suleimenova, 2016[11]). Additionally, Regional Training Centres (RTCs) were established to provide training in the regions (Suleimenova, 2016[11]). Other institutions that provide additional training for civil servants are for example the Nazarbayev University and the Regional Hub of Civil Service in Astana or foreign academic institutions. In addition, civil servants with more than two years of service are entitled to a special quota in “Bolashak” scholarship competitions, which provide access to top foreign universities (OECD, 2018[5]).
Current trainings focus strongly on compliance with the law. The underlying assumption appears to be that procurers use the law as a guideline for their work. However, with increasing complexity of the public procurement function, public procurers need to be trained to go beyond administrative tasks. The Ministry of Finance (Centre for electronic commerce) provides practice-oriented training on the e-procurement platform where procurers learn how to use the platform. It would be beneficial to extend this type of training to other areas of public procurement.
Several procurers from different Akimats reported in OECD interviews that the training provided by the Ministry of Finance is not sufficient for procurers to be adequately trained to carry out procurement. Others mentioned that in addition to the seminars in their administrative region (“oblast”) that take place once or twice a year, they hire consulting companies to give seminars. However, these additional seminars are costly for the Akimats. Respondents also criticised that seminars mainly focus on e-procurement and legal aspects.
Another aspect that was brought up in the interviews with procurement professionals was the pressure that is put on public officials through regular testing. With the continuous recognition of public procurement as a strategic function, increasing demands are being made at public procurers. For public procurers to fulfil this strategic procurement function, assessments and training concepts should move away from compliance and encourage individual responsibility. A particular challenge of the procurement task is that it requires civil servants in this function to be equipped with skills from different disciplines, as highlighted in the OECD Recommendations of the Council on Public Procurement in Box 5.4.
Principle 9 – Developing a procurement workforce with the capacity to deliver value for money
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 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.
Source: (OECD, 2015[12]).
On a political level the capacity development of civil servants is translated in overarching strategies.
copy the linklink copied!5.3. Professionalising the public procurement workforce to achieve strategic objectives through public procurement
5.3.1. Adopting procurement-specific strategies and action plans
In Kazakhstan, as in the majority of OECD countries, strategic documents are developed that pertain to various issues and provide a long-term vision for the civil service, as displayed in Figure 5.8 (OECD, 2018[5]). While capacity building in the civil service has often been raised as a priority issue, procurement-specific elements are yet to be formulated.
Source: (OECD, 2018[5]).
The address of the president in which he announced Strategy 2050 exemplifies this focus on capacity building in the civil service. The strategy states: “From now on every public servant has to demonstrate clear progression in their career through the development of skills and experience that allow as them to increase their professional level” (N. Nazarbayev, 2012[13]). A professional state apparatus is mentioned throughout the different strategies as one of the principal factors for further advancing state capacity and developing Kazakhstan’s democracy.
The Strategy 2050 announced in 2012 provides guidelines for policy making in the Republic of Kazakhstan. The strategy mentions an effective civil service as a key condition for successful implementation of the strategy (N. Nazarbayev, 2012[13]). After his re-election in 2015, the President formulated an additional strategy that sets out 100 concrete steps that he called “Plan of the Nation”. The plan is supposed to lead the way to the implementation of the 2050 Strategy that would transform Kazakhstan into a strengthened and consolidated nation. Notable about this plan in the context of civil service reform is that the first 15 steps listed in the “Plan of the Nation” focus on professionalisation (Kazakhstan Institute for Strategic Studies under the President of the Republic of Kazakhstan, n.d.[14]).
Moreover, the Ministry of Finance of the Republic of Kazakhstan has published a Strategic Plan for 2017-2021. The plan references public procurement, but strategic elements are limited. The section on government procurement in this Strategic Plan references the PPL and describes the changes that result from recent amendments (Министра финансов Республики Казахстан, 2017[15]). In the introductory part, the strategic plan describes the overall vision of Kazakhstan to become one of the 30 most developed countries in the world. However, it does not provide a concrete roadmap for the different policy areas, such as procurement (Министра финансов Республики Казахстан, 2017[15]).
To translate these overarching strategic goals into the area of public procurement requires an additional step, taking also into account that the capacity is key to unlocking gains from strategic public procurement. Many use a dedicated capacity strategy for public procurement that is specifically geared towards implementing the goals set by policies and strategies.
To make these strategies accessible for practitioners, translating them into concrete guidelines can be a useful addition to the overall strategy. An example of where concrete guidelines have been developed is Ireland. As further explained in Box 5.5, these guidelines promote the application of good practices and help practitioners apply public procurement rules consistently.
One of the primary objectives of establishing the Office of Government Procurement (OGP) in Ireland was to improve the professionalism of the staff involved in procurement. The Irish state spends approximately EUR 8.5 billion every year on goods and services. In this context, it is essential that the public service operates in a co-ordinated and efficient way. Procurement is a key element of the government’s public service reform.
The OGP is currently finalising national guidelines for goods and services of low and high value in public procurement tendering competitions. These guidelines will be published as a dynamic document. This means that they will be available electronically. The document will contain links to relevant information, as well as policy and template documents.
The purpose of these guidelines is to promote best practices and consistency of application of the public procurement rules in relation to the purchase of goods and services. The guidelines have been written in plain language with the goal of providing a clear description of the rules. The guidelines form part of the OGP National Procurement Policy Framework, which consists of five branches:
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legislation (directives, regulations);
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government policy (circulars, etc.);
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general guidelines;
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the Capital Works Management Framework;
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detailed technical guidelines, template documents and notes that are issued periodically.
Source: Information provided by Office of Government Procurement (OGP).
Training public procurement professionals and developing their skills is one side of capacity development. Attracting high-skilled professionals is another element necessary to develop human resource capacity.
5.3.2. Attracting high-skilled professionals
Attractive career opportunities in public procurement are needed to attract qualified professionals. Recognising public procurement as a profession can help to raise interest among professionals and create career prospects. Currently, public procurement is not perceived as a profession in Kazakhstan. In a third of OECD countries, public procurement is now regarded as a profession, as displayed in Figure 5.9.
Source: 2018 OECD Survey on the Implementation of the 2015 OECD Recommendations on Public Procurement.
As described in Figure 5.9, in many OECD countries and in Kazakhstan, public procurement is not recognised as a profession, so it can be regarded as an administrative function and not as a strategic function. Recognising public procurement as a strategic function provides a number of opportunities. With respect to capacity development, it requires defining a specific job profile, qualifications, hierarchies and other aspects that are explicit to a profession. Currently, procurers have a variety of different educational backgrounds, as detailed in paragraph 5.2.3. Defining a clear skill set for procurers can facilitate recruitment and capacity development and give the profession more visibility.
To make a career in public procurement attractive, it is also important to allow for merit-based career progression. As explained in section 5.2.3, civil servants do not feel that career progression is merit-based (ACSH, 2018[4]). In-depth interviews with public servants carried out by the Astana Civil Service Hub revealed that limited benefits and career progression are the two most prominent obstacles limiting the motivation of civil servants in Kazakhstan (ACSH, 2018[4]). To regain trust of employees, appointments and promotions have to be competitive and based on performance. To make performance comparable, performance evaluations on a regular and consistent basis should be considered. In addition, incentives for career progression need to be developed that encourage procurement professionals to pursue a career in public procurement. Career progression can consist of both vertical and horizontal mobility.
The remuneration of civil servants in Kazakhstan is based on a uniform state policy and a broadly comparable framework for pay across the national government (OECD, 2018[5]). As mentioned above, limited benefits are, along with limited career progression, the most important obstacles to motivation for public servants (ACSH, 2018[4]). The survey respondents deplore that the pay is not in accordance with the workload, responsibilities and limitations (ACSH, 2018[4]). In order to ensure motivation of civil servants, it is essential to provide adequate salaries that are traceable in a transparent pay system. In addition, incentives for career progression need to be developed.
The results of the survey also show that beyond promotion and salary increases, there are additional factors that encourage motivation. The results show that primary and secondary benefits are important for public servants’ motivation. Fairer working conditions and more individually tailored performance and training schemes are regarded as potential drivers of better performance. Kazakhstan’s civil service is characterised by a hierarchical structure and it faces internal and external public sector reform pressures (ACSH, 2018[4]). There is only limited delegation of human resource management practices to line ministries, is below the OECD average (OECD, 2018[5]). Delegating HRM issues to a stronger extent to line ministries might allow for more tailored solutions.
Certification of skills of the public procurement workforce can be an efficient way of contributing to the professionalisation of the public procurement workforce. In Kazakhstan, sovereign wealth fund Samruk-Kazyna, equipped with a dedicated public procurement system, has been working towards introducing a certification framework (see chapter 6). The rules for advanced training of civil servants (Government Decree № 125 adopted on 15 March 2018) sets out that civil servants from corps B (i.e. as detailed above, the vast majority of civil servants) go through advanced training at least once every three years. This advanced training should match the functional occupation of the civil servant and comprise from 8 to 80 hours. Implementing a certification of skills could help to ensure professional capacities. A certification framework for public procurers has been implemented in the United States, as described in Box 5.6.
The American Purchasing Society (APS) is a professional association of buyers and purchasing managers. The APS was the first organisation to establish a nationally recognised certification for buyers and purchasing professionals. APS offers three different certification programmes:
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1. the Certified Purchasing Professional Programme is directed at professionals who have demonstrated the skills to successfully implement improved purchasing and supply chain practices as a part of a business solution in an organisation;
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2. the Certified Professional Purchasing Manager Programme is aimed at those in managerial positions and those who have managerial experience;
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3. the Certified Professional Purchasing Consultant Programme is aimed at certified purchasing professionals who either consult or teach purchasing to people outside their own employer.
Source: (OECD, 2013[16]), Public Procurement Review of the State's Employees' Social Security and Social Services Institute in Mexico, OECD Publishing, Paris, https://doi.org/10.1787/9789264197305-en.
Additionally, a certification of skills would go beyond simple testing of knowledge on legislation and integrate more practice-oriented elements, on-the-job training and continued training. As highlighted in the case of the UK in Box 5.7, strengthening the profile of public procurement professionals can serve to raise standards and encourage capacity development.
The Government Procurement Service (GPS) has defined a strategy to “Build the Procurement Profession in Government”. Although GPS does not certify procurement professionals, it intends to build a ”community of procurement professionals” distinguished by core competencies that include: an understanding of commercial drivers such as profits, margins, shareholders, cost models, total costs of acquisitions and whole-life costs together with knowledge and understanding of procurement and contract law.
Procurement professionals are encouraged to maintain their professional development on a continuous basis. Being a GPS member helps raising the profile of procurement as a profession, and presenting it as an attractive career option; contributes to increase capacity in the profession via entry schemes, creating skills frameworks to help raise standards; and supports the development of skills and capability.
Source: (OECD, 2013[16]), Public Procurement Review of the State's Employees' Social Security and Social Services Institute in Mexico, OECD Publishing, Paris, https://doi.org/10.1787/9789264197305-en.
5.3.3. Developing a framework for professionalising public procurement
To increase capacity of the civil service, adequate training needs to be provided. This can only be provided if there is a common understanding of what the procurement profession is and which skills public procurers need to fulfil a strategic function.
Kazakhstan has a competency framework for Corps A public servants in place. A competency framework serves to define skill profiles of certain groups of public officials. Most OECD countries have developed a centrally defined skills profile for senior public officials (see Figure 5.10) as it may facilitate mobility of senior civil servants across different areas of government (OECD, 2018[5]).
Note: Slovak Republic: a new Civil Service Law entered into force on 1st June 2017, introducing major changes in existing human resources management practices. For this reason, data may no longer reflect the current situation in the country.
Source: OECD (2016a), “Survey on Strategic Human Resources Management in Central/Federal Governments of OECD Countries”, OECD, Paris.
To establish public procurement as a profession, it would be beneficial to develop a capacity strategy for public procurement that systematises the skills that are required of public procurers in a framework. Such capacity strategy and guidelines could be based on the outcomes of the “skill gap inventory”, so that they adress current weaknesses of the public procurement workforce.
A competency framework for public procurement can also be an effective way to systematise public procurement skills and set standards for the public procurement workforce. The example of the Scottish procurement competency framework, further described in Box 5.8, shows which types of competencies can be taken into account in the development of a competency framework. The Scottish framework includes thirteen competencies that public procurers should have. This can provide a clearer understanding of the expectations of employees in public procurement. It can also help to identify which officials need training and further development (Scottish Government, n.d.[17]).
The procurement competency framework of the Scottish government identifies the skills and competency levels required by all staff involved in the procurement process. It has been developed by the cross-sectoral people and skills working group to support the delivery of the recommendations in the Review of Public Procurement in Scotland (2006) which related specifically to people and skills. The framework is intended to compliment, not replace, existing personal development tools in organisations.
The framework identifies thirteen key competencies candidates should have:
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1. Procurement process: has the sufficient knowledge and understanding in sourcing and tendering methods to carry out duties associated with role.
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2. Negotiation: has the ability to negotiate within the scope of the role.
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3. Strategy development and market analysis: has the strategy development and market analysis skills necessary to carry out duties associated with role.
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4. Financial: has the financial knowledge and understanding needed to carry out duties associated with the role – elements include appraisal of suppliers’ financial positions, total costing and the compliance frameworks that exist for public sector finance and procurement.
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5. Legal: has sufficient understanding of legislative frameworks relating specifically to procurement to carry out duties associated with the role.
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6. Results focus: is aware of how personal and team objectives contribute to the success of the organization, and continually demonstrate commitment to achieving these.
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7. Systems capability: has the knowledge and understanding of systems and processes utilised in the procurement of goods and services. Specific system competencies may be localised to specific systems.
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8. Inventory, logistics and supply chain: has the knowledge and understanding of materials management solutions to carry out duties associated with role. Elements include inventory, logistics, warehouse management, etc. Knowledge and understanding of supply chain management techniques is also important, and is not restricted to organisations holding stock.
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9. Organisational awareness: clearly understands roles and responsibilities, how procurement should be organised and which units within the organisation are in charge of it.
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10. Self-management: responds quickly and flexibly when required, supporting others while striving to improve skill application in line with organisational requirements.
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11. Leadership: contributes to the achievement of team goals by providing support, encouragement and clear direction when appropriate.
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12. Communication: openly shares relevant information and communicates in an effective and timely manner using a variety of means.
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13. Relationship management: identifies different types of customers and stakeholders and formulates strategy for managing relationships.
Source: (OECD, 2013[16]), Public Procurement Review of the State's Employees' Social Security and Social Services Institute in Mexico, OECD Publishing, Paris.
Inspiration on further initiatives to professionalise and empower the public procurement workforce can be taken from a number of actions that have been taken in New Zealand. Some of these initiatives develop a standard role of procurers, including public procurers in project teams and benchmarking the performance of public procurers against the private sector, as further detailed in Box 5.9.
Key initiatives New Zealand has adopted in order to professionalise and empower its public procurement workforce include:
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Developing a model to assess the capability of procurement in agencies.
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Assessing agency procurement capability on site, and providing action plans for development.
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Requiring agencies that are not targeted for onsite assessment complete a self-assessment using measures described in the procurement capability model.
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Developing standard role competency requirements for procurers, and implementing these requirements in government agencies.
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Benchmarking key agency performance against the private sector.
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Increasing hiring of skilled and qualified procurement professionals to fill the skills gap.
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Ensuring government procurement salaries reflect market norms.
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Contracting agencies to allocate resources to reform procurement practice.
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Identifying opportunities for procurement in shared service centres.
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Including procurement professionals in works project teams.
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Establishing a small team of strategic procurement experts (also known as a commercial pool) to support high risk and high value projects across the government.
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Allocating resources to support public-private partnership projects.
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Determining procurement training needs and source providers.
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Mandating that agencies use tools provided to assess procurement capability and capacity.
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Mandating that agencies ensure that procurement staff are trained in order to fill identified skill gaps.
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Providing e-learning to support procurers to gain a professional procurement qualification.
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Targeting key procurement personnel within agencies to fast track their professional procurement education.
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Developing and launching career development plans for procurement personnel.
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Developing a New Zealand procurement academy.
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Encouraging and subsidising public sector procurement professionals in gaining recognised procurement qualifications.
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Launching a graduate programme in procurement.
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Facilitating temporary transfers and career progression planning between agencies for procurement professionals.
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Establishing and facilitating a procurement leaders group (for officials aged under 35 years) to cultivate future procurement leaders.
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Developing the course “Demystifying Procurement”, a two-day introductory course to procurement in a public sector context or alternatively for learning online.
Source: (OECD, 2016[18]), Towards Efficient Public Procurement in Colombia: Making the Difference, OECD Publishing, Paris.
These initiatives can provide inspiration for capacity development in Kazakhstan’s public procurement workforce and for establishing public procurement as a strategic function.
The above-mentioned analysis leads to the following proposals for action.
Kazakhstan has a strong potential to increase the strategic use of public procurement. Recognising the possibility of achieving strategic objectives through public procurement should be a first step towards a more systematised inclusion of broader outcomes for other policy objectives in the public procurement system.
To develop a strategic use of public procurement, Kazakhstan should seek to increase the capacity and skills of its public procurement workforce. Developing a strategy for public procurement workforce development can help to systematise capacity development. Recognising public procurement as a profession can equally help to facilitate the recruitment of high-skilled professionals and adapt training and skills development to the requirements of the job.
Strengthening public procurement capacity and capability
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To ensure adequate implementation of the ongoing efforts to improve the public procurement system, Kazakhstan could strengthen the capacity of the public procurement workforce in all dimensions, i.e. the staff working on policy and methodological questions related to procurement and those conducting procurements. This entails increasing the number of staff fully dedicated to public procurement activities, especially in the Ministry of Finance, but also in single organisers and contracting authorities, as well as increasing the public procurement knowledge and skills of the staff. To identify the needed number of staff and their skills, Kazakhstan could conduct a detailed needs assessment with the help of the available administrative data and strengthening capacities and capabilities accordingly.
Encouraging the use of strategic objectives in public procurement
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Kazakhstan should systematise the use of complementary policy objectives by developing a strategy for public procurement that details which strategic objectives the government wants to achieve through public procurement. Translating this strategy into practice-oriented guidelines for public procurers can facilitate the implementation.
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Once a strategy for strategic procurement is established, Kazakhstan should address the issue of excessive workload of public procurers. Increasing capacity of public procurers is needed to allow sufficient time to consider strategic objectives.
Increasing training opportunities
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Currently, the specific needs of public procurers are not adequately reflected in the training programmes for public servants. Kazakhstan could prepare capacity strategy based on an analysis of needs (“skills gap”). A concrete action plan could be part of this strategy, detailing opportunities for developing skills in line with procurers’ needs.
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For Kazakhstan’s public procurement professionals to meet the needs of an increasingly complex and demanding procurement function, training concepts should move away from compliance towards encouraging individual responsibility. This would allow procurers to take an active part in strategic purchasing decisions. Contracting authorities in particular could focus on developing the skills and knowledge of their procures, ensuring that they possess up-to-date, relevant and specialised knowledge on specific categories in relation to both the development and evaluation of technical specifications in the area of focus for the contracting authority.
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To develop a high-skilled public procurement workforce, the public procurement profession needs to attract high-skilled professionals. To retain a qualified workforce it would be beneficial for Kazakhstan to establish public procurement as a profession and move it towards a strategic function.
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