Framework Agreements Help Government Procurement Improve Quality and Efficiency
■ Wang Conghu
The Ministry of Finance recently announced the Interim Measures for the Administration of Procurement Methods under the Framework Agreement on Government Procurement (Order No. 110 of the Ministry of Finance, hereinafter referred to as Order No. 110). Compared with the public bidding, invitational bidding, competitive negotiation, competitive negotiation, inquiry, and single-source procurement methods in the current government procurement, the framework agreement procurement is a procurement method specially aimed at multiple frequencies and small amounts. A more flexible procurement method. Order No. 110 will be implemented on March 1, 2022, which will further enrich the methods of government procurement, improve the convenience of government procurement, and help government procurement projects achieve higher performance.
As we all know, since the promulgation of the Government Procurement Law in 2002, the Chinese government procurement system has undergone tremendous changes. As a market-oriented tool for government reform, centralized government procurement is constantly changing the purchasing concept, purchasing behavior and purchasing method of the public sector. It is undeniable that there are also some problems in the field of government procurement. But we should see that government procurement, as a new system under the market economy, has only been implemented in my country for only 20 years. In the past 20 years, in order to standardize government procurement behavior and improve government procurement performance, we have made great efforts, not only promulgated 1 law, 1 administrative regulation, 8 departmental regulations of the Ministry of Finance, 22 normative documents of the State Council, and More than 200 normative documents of the Ministry of Finance and more than 30 normative documents of other ministries and commissions. It is not difficult to see that the institutionalization, standardization and standardization of government procurement has been gradually improved, and it has also reached a new level of governance modernization. On the occasion of the 20th anniversary of the implementation of the Government Procurement Law, Decree No. 110 was promulgated. This is not just a coincidence, but a sign that my country’s government procurement methods are more diversified and standardized, and the content of my country’s government procurement toolbox is more colorful.
It should be noted that government procurement, as an effective policy tool in a market economy, should not only allow the public sector to have more optional governance tools, but more importantly, play an active and important role. As far as the public sector purchases from market entities, it is particularly important to use different matching purchasing methods for different types of commodities. This is not only because matching procurement methods can bring efficiency and convenience to government procurement, but also because standardized procurement methods can better regulate the procurement behavior and procurement order of the public sector. The introduction of Order No. 110 is actually to achieve such a purpose. As we all know, for goods and services with clear and unified standards for technology and services, which need to be repeatedly purchased many times, such as small and sporadic goods such as consumables and accessories, as well as small and sporadic services such as legal, evaluation, accounting, auditing and authentication consulting, etc., If the bidding method is adopted, the cost is obviously too high and the time is too long; while the competitive negotiation and competitive negotiation are equally cumbersome and time-consuming; the inquiry and single-source procurement method will not only lose competitiveness, but also may bring to injustice.To this end, “through the public solicitation process, the first-phase shortlisted suppliers are determined and a framework agreement is concluded, and the purchaser or service object, in accordance with the rules stipulated in the framework agreement, determines the second-phase transaction supplier within the scope of the shortlisted suppliers and concludes the procurement process.contract“The framework agreement procurement method just makes up for the deficiencies of other procurement methods.
Although the policy tool of government procurement has its unique public value, it still belongs to the category of fiscal policy. As a fiscal policy tool, government procurement should not only perform the function of fiscal budget, but also assume the responsibility of improving fiscal performance. Obviously, as far as the implementation of the financial budget is concerned, the framework agreement has the same function of executing the financial budget as other procurement methods, such as public bidding, invitation to bid, and competitive negotiation. The difference is that for small and sporadic procurement of goods and services, as well as for government procurement service projects that provide services to service objects outside the department and the system beyond the centralized procurement catalogue and above the procurement quota standard, it is necessary to identify two or more. Suppliers are independently selected by the service recipients”, such as pension,educatetechnology, culture, and health service purchases, the most effective way to perform budgetary responsibilities is through framework agreement purchases.
In addition, the framework agreement procurement method also has a positive effect on improving the performance of government procurement projects. Facing the ever-changing market prices of goods and services, how to effectively respond to achieve the performance target of budget expenditure requires scientific system design, and Order No. 110 also responded to this. For the framework agreement, if the validity period of the agreement is too long, it will not be able to quickly respond to price changes, and if the validity period of the agreement is too short, it will affect the procurement performance. To this end, Order No. 110 distinguishes between the procurement of goods and services, that is, “The centralized procurement agency or the competent budget unit shall scientifically and reasonably determine the duration of the framework agreement according to the work needs and the changes in the market supply and price of the procurement target. The framework agreement for goods projects. The validity period is generally not more than 1 year, and the validity period of the service project framework agreement is generally not more than 2 years.” At the same time, Order No. 110 also flexibly stipulates two forms of closed framework agreement procurement and open framework agreement procurement, and clarifies that closed framework agreement procurement is the main one; and the shortlist evaluation rules for closed framework agreement procurement set the price priority method. and quality-first approach. This can not only ensure the efficiency of government procurement, but also maximize the performance of government procurement.
It should be noted that “there should be clear procurement targets and pricing mechanisms, and the method of shortlisting suppliers who meet the qualifications” stipulated in Order No. 110 has gone beyond the provisions of the original agreed supply method, and it upholds the “competitive selection of the best”. The principle of “focusing on performance” is an innovation of the original contract supply procurement method. In addition, “the framework agreement procurement should implement electronic procurement” will add efficiency wings to this innovative procurement method.
We have every reason to believe that the framework agreement procurement method will play a positive role in promoting the quality, efficiency and high-quality development of government procurement.
(Author: National Institute of Development and Strategy, Renmin University of China, School of Public Administration)
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(Article source: China Government Procurement News)