Developing public procurement reform in Mongolia

Ladies sweing garments with sewing machine

The EBRD is supporting the introduction of modern legislation and an eProcurement system for greater transparency and increased reach among SMEs.

From desks and stationery to cleaning and catering: any office needs goods and services in order to be functional. Public sector institutions are no exception; however, they have to buy such goods and services through a process that guarantees transparent and fair competition.

Introducing best practice

In Mongolia, the government has been working since 2008 to introduce international best practice in public procurement by improving its laws and regulations. As part of this plan, it has also established an electronic procurement (eProcurement) system, which facilitates the purchase and sale of supplies, work and services through the internet and other information systems.

Since the adoption of the new legislation in 2011, the EBRD – in collaboration with the United Nations Commission for International Trade Law (UNCITRAL) – has been providing expert advice and technical cooperation to help the government implement the reforms in compliance with the standards set in the UNCITRAL Model Law on Public Procurement. The EBRD UNCITRAL Public Procurement Reform Initiative, worth over €2.1 million, was supported by the Early Transition Countries Fund*, the EBRD Shareholder Special Fund and – more recently – the Slovak Republic.

e-Procurement and SME outreach

The newly established Government Procurement Agency (GPA), is putting in place the necessary e-Procurement tools to reduce the risk of corruption and make participating in public tenders much easier for small and medium-sized enterprises (SMEs). So far, around 20 per cent of GPA contracts are managed through the new system. The government aims to cease all paper-based procedures in the near future.

In parallel, through its SME Development Programme in Mongolia, and with the support of the European Union, since 2012 the EBRD has been working directly with local companies to improve their understanding of the new rules for public procurement and thereby to maximise their opportunities to win public tenders. To this end, in February 2014 the Bank began training Mongolian business associations to conduct tender development training for SMEs. In turn, participants have conducted three workshops on procurement policy and reached out to over 50 SMEs. One-quarter of these enterprises are based in rural areas and are often less familiar with public tendering.

*The Early Transition Countries Fund is supported by: Canada, Finland, Germany, Ireland, Japan, Korea, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, the Taiwanese government and the United Kingdom.