7.4. Central purchasing bodies
Increasing efficiency and delivering value-for-money in the use of public funds is a key objective of public procurement. Strategic centralisation of procurement needs could generate numerous benefits to this end – including better prices through economies of scale, lower transaction costs and improved capacity and expertise. As such, central purchasing bodies (CPBs) have been established in order to reap the benefits of strategic centralisation. Depending on the countries, CPBs’ functions range widely, including acquiring goods or services; awarding public contracts for works, goods or services; and/or concluding framework agreements (FAs) for works, goods or services – intended for one or more contracting authorities (CAs).
In 2019, all Western Balkans except for Bosnia and Herzegovina reported that they organise centralised purchasing through CPBs. This is similar to the trends in OECD countries where an increasing number of governments also establish CPBs to aggregate procurement needs and to achieve better value for money. The different organisation of CPBs in each country could reflect the differences in the systems of public administration as well as the structures for the provision of public services. In Kosovo and North Macedonia, there exists one central contracting authority that operates as the CPB whereas in Albania and Montenegro, there exist several CPBs at the central level. For instance, besides the Central Purchasing Agency, Albania also has additional CPBs – the National Agency on Information Society for information technology products and the Legal Department of the Ministry of Health and Social Welfare, which organise centralised purchasing for drugs and other medical equipments. Furthermore, centralised purchasing could be organised according to different levels of government as is the case in Serbia which has CPBs at the central level as well as at the regional level.
In 2019, the most prominent role of CPBs in the Western Balkan region is aggregating demand and purchasing on behalf of other CA(s). In countries reporting that they have CPBs, this is one of their main responsibilities. In the case of OECD countries, rather than this role, establishing FAs and other procurement instruments to consolidate needs are the most key role of CPBs in the OECD area. The CPBs of four Western Balkans also undertake this role of awarding FAs.
CPBs can also bring about efficiency gains through leveraging its procurement capacity and expertise. Functioning as a knowledge and expertise centre, CPBs in OECD countries establish policies for CAs and coordinate training sessions for public procurement officials. In contrast, this is not observed in the Western Balkan region.
Data for the Western Balkans – Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia – were collected through the 2019 Survey for the Western Balkans on Public Procurement. Data for the OECD countries were collected through the 2018 OECD Survey on the Implementation of the 2015 OECD Recommendations on Public Procurement to which 31 countries responded, as well as 2016 OECD Survey on Public Procurement.
Contracting authority (CA) is any state, regional or local authority that carries out procurement activities.
Centralised purchasing activities are activities conducted on a permanent basis, in one of the following forms: the acquisition of supplies and/or services intended for CAs; and/or the awarding of public contracts or the conclusion of FAs for works, supplies, or services intended for CAs.
Framework agreement is an agreement with one or more economic operators for the supply of goods, services and, in some cases, works, the purpose of which is to establish the terms governing contracts to be awarded by one or more contracting authorities during a given period, in particular, with regard to maximum price, minimum technical specifications and, where appropriate, the quantities envisaged.
Further reading
OECD (2019), Reforming Public Procurement: Progress in Implementing the 2015 OECD Recommendation, OECD Public Governance Reviews, OECD Publishing, Paris, https://doi.org/10.1787/1de41738-en
OECD (2015), Recommendation of the Council on Public Procurement, https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0411
Figure notes
Data for the Czech Republic, Luxembourg, Switzerland, the United Kingdom, and the United States are not available. On data for Israel, see https://doi.org/10.1787/888932315602
Source: For the data on the Western Balkans, OECD (2019), 2019 Survey for the Western Balkans on Public Procurement; For the OECD data, OECD (2016), OECD Survey on Public Procurement.
Source: For the data on the Western Balkans, OECD (2019), 2019 Survey for the Western Balkans on Public Procurement; For the OECD data, OECD (2016), OECD Survey on Public Procurement.
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