Republic of Chile : Country Procurement Assessment Report

Abstract

Chile's public procurement system is considered generally free of corruption, supported by probity of the civil servants, decentralization, and good budgetary and control systems. However, it is affected by deficiencies that the government recognizes, and is taking action to overcome, particularly with respect to procurement of goods and services. There is no unified comprehensive, and public procurement system in Chile. The procurement of public works on the one hand, and the purchase of goods and services on the other, have traditionally been carried out under separate legal, procedural and organizational frameworks. In 1998, the Government established Chilecompra as an information platform for state procurement of goods and services. Chilecompra was a pioneer effort on e-procurement and had been generally considered a model to follow. However, its initial operation did not meet expectations. In response, the Government took a number of policy, institutional and administrative actions designed to introduce transparency to the procurement function and strengthen Chilecompra, which are reflected in the Public Procurement System Strategic Plan (PSSP) for 2000-2004, currently under implementation. Within this background, this Country Procurement Assessment Report (CPAR) reviews the procurement aspects as it concerns public works, selection of consultants, construction and consulting industries, and, control and audit, while focusing on the performance of procurement in Bank projects. It states the overall procurement risk in Chile is low, provided that the individual risks are properly managed. The overall conclusion of this report is that Chile has adopted a well thought and comprehensive strategy and action plan for procurement of goods and services, that is a best practice example to be followed. The strength of the strategy is that it openly recognizes existing shortcomings, builds on past experience, and enjoys ownership at the highest levels of government, as well as a committed and competent team responsible for its implementation. Recommended actions are to: issue a comprehensive regulatory decree to the procurement law and complementary norms and standard documentation; unify and revisit existing regulation for procurement and management of public works contracts; harmonize procedures and documents of general use by all agencies; provide continued budget support in order to ensure the financial sustainability of Chilecompra, particularly during the initial years of implementation of the new platform; revisit existing registration and prequalification procedures for public works contractors; and, provide full support to capacity building and human resources development within the Government's Program of Excellence.