At no time is an effective public procurement system more crucial than in the aftermath of a natural disaster. Relief services and supplies such as medicine must be purchased, specialized engineers must be hired to assess damage, and construction firms must be contracted to rebuild roads, electricity networks and other infrastructure. All of this has to be done in haste, with little time for careful oversight and deliberation. The opportunities for price gouging and inefficiency multiply in such a setting.
Such was the challenge faced by Central American countries hit by Hurricane Mitch in late 1998. In the rush to rebuild, government procurement offices in Honduras, Nicaragua, El Salvador and Guatemala were suddenly overwhelmed. In addition to processing a surge of contracting requests generated by their own governments, these offices were asked to handle millions of dollars in relief funds sent by charities and international organizations. The inevitable delays caused frustration on all sides and focused attention on the need to modernize national procurement systems.
Now, even though the reconstruction process is already well underway, Honduras has asked the IDB to help finance an ambitious Program to Strengthen and Modernize the National System of State Procurement. The $22 million program, which is under active consideration by the Bank’s Board of Executive Directors, is designed to address both short-term reconstruction needs and the long-term goal of improving financial management throughout the Honduran government. According to Jorge Claro de la Maza, recently retired chief of the IDB’s Procurement Policy and Coordination Office, the short-term goals will be met through activities focused on reconstruction project oversight and direct support for purchasing and contracts. A second set of project activities will develop and install a permanent training program for procurement officials and lay the groundwork for a new National Purchasing and Contracts System.
“This is the first time that the Bank is considering a comprehensive program of this nature, specifically geared to the improvement of the procurement system of a country,” says Claro. “Up until now, most efforts in this area have been piecemeal and have not been carried out as an integral part of the reform of the state.”
The project will be carried out by Honduran government officials with the help of specialized international consulting firms jointly chosen by the government and the international community.