Interim Progress Report:

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BIMILACI 2007

• Interim Progress Report
• Professional Integrity Guidance Book
• Promoting Integrity and Constraining Corruption
  in the Selection and Employment of Consultants
• Biennial Meeting of International Lending
  Agencies and the Consulting Industry
• May 10 -11, 2007
• Inter-American Development Bank, Washington, D.C.
• Stephen Schwenke, Ph.D.
• Lead Consultant, Center for Applied Ethics
• University of Stellenbosch, South Africa

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Professional Integrity Guidance Book

• Part One Executive Summary and Overview of
  Earlier Reports
• Part Two Policy Context
• Part Three Specific and Detailed Integrity
  Recommendations on Guidelines Selection and
  Employment of Consultants by World Bank Borrowers
• Anticipated completion of draft Guidance Book
  June 30, 2007

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Key Problems

• UNSATISFACTORY RESULTS
• Procurement system based on MDB Guidelines often
  fails to lead to well qualified, ethically
  motivated, timely, and cost-effective consultant
  services appropriate to the needs of the public
• Current consultant procurement strategies are too
  complex, time consuming, labor intensive, and
  overly compliance focused
• Quality and ethical performance not adequately
  measured or monitored

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Key Questions 1

• Guidelines A Carrot as
• well as the Stick?
• Who can be trusted?
• Is a rational basis of trust between PA client
  and professional or expert consultant possible?
• Ethically motivated?
• Is there an appeal to professionalism?
• A Flawed Process?
• Do the existing Guidelines need to be revised (or
  rewritten) if ethical performance is to be
  achieved?

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Key Questions 2

• What else (outside of the Guidelines) can be done
  to improve procurement?
• By donor institutions and MDBs?
• By the public sector (Borrower)?
• By professionals and experts?
• By the public and civil society?
• Is there a larger procurement reform agenda?
• Can the Guidelines be applied to strengthen
  reform efforts?

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Two Reports

• Progress to date
• The Ethics Report
• Preparation of Guidebook on How to Prevent
  Corruption and Promote Integrity in the Selection
  and Employment of Professional Consultants
• The Effectiveness Report
• World Bank Policy on Selection and Employment of
  Consultants Study of its Effectiveness

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Ethics Reports Findings 1

• Premise Positive reinforcement (aspirational
  measures) negative constraints (compliance
  safeguards) improved ethical performance
• Expanded role by the organized professions
  (including their registration boards and
  professional associations)
• MDB Borrowers jointly challenge the professions
  to demonstrate
• Leadership
• Commitment to public service ideals
• Willingness to hold their members accountable for
  ethical performance

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The Ethics Reports Findings 2

• Implementing an aspirational approach
• Admit the problem Many Borrower PAs are
  institutionally weak and growing weaker
• Harness human capacity and desire to be ethical
• Challenge PAs and consultants jointly to
  formulate measures to create a sustainable,
  credible, and rational trust mechanism
• To serve the public
• To exemplify high professional standards
• To take pride in respective important roles in
  development
• To hold professionals and experts more
  accountable for the quality and success of their
  services, and for impacts of poor performance

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Effectiveness Reports Findings 1

• Guidelines
• Requirements are not clear or are contradictory
• Emphasis on QCBS, used for 92 even though
  appropriate for just 40
• Cost wins QCBS evaluation formula results in
  cost determining selection in majority of cases
• Least recognized victims of current situation
  are the good consultants and the good clients
• Consultants QCBS encourages lowest cost
  proposals cutting corners
• Emphasis on least cost a rise in frustration
  levels among professionals and experts
• Quality-oriented consultants abstain
• Consultants abandon domestic consulting industry

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Effectiveness Reports Findings 2

• Institutional weaknesses
• PAs failing to hire and retain professional
  procurement staff (indicates that broader
  procurement reforms are needed)
• Double standards
• Guidelines stress transparency for consultants,
  yet are silent on EC transparency
• Robust empirical assessment
• Procurement takes far too long, costs far too
  much, lacks essential fairness, and contributes
  to erosion of domestic consulting capabilities

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Issues Being Examined in the Integrity Guidebook

• The Public Interest
• Increasing Complexity
• Balancing Quality and Cost
• Corruption and Integrity
• Transparency and Accountability
• Public-Private Partnerships
• Consulting and National Development
• Reforming Procurement
• Political Will
• Policy
• Implementation

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Roleplayers in Public Procurement

• The Multilateral Development Banks (MDBs)
• Public Sector (Borrower)
• Procurement Agency (PA)
• Consultants
• Professionals
• Other Experts
• The Public
• Civil Society
• The General Public

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Roleplayers The Multilateral Development Banks
1

• Setting Procurement Principles and Priorities
• Fostering the Knowledge Economy Consultants
• Constraining Corruption, Fostering Integrity and
  Building Trust
• Setting Ethical Standards
• Setting Ethical Performance Expectations
• Strengthening Ethical Roleplayers
• Monitoring

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Roleplayers The Multilateral Development Banks
2

• Institutional Strengthening Considerations
• Leadership
• Public Service Ethos
• Consultant Procurement Training and Support
• Capacity Building
• Improving Consulting Services and Performance
• Improving PA Services and Performance
• Empowering Oversight Role of Civil Society

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RoleplayersThe Public Procurement Agencies
(Borrowers) 1

• Policy The Conducive Procurement Environment
• Leadership Vision
• Borrower Priorities to Strengthen Consulting
  Industry
• Borrower Policy Implementation
• Borrower Monitoring of Performance and Results
• Regulatory Factors Compliance Aspirational
• Capacity to Define and Describe Technical
  Requirements
• Coping with Increasing Procurement Complexity

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RoleplayersThe Public Procurement Agencies
(Borrowers) 2

• Legitimacy of the Procurement Process
• Procurement Fairness, Accountability and
  Transparency
• Efficiency and Responsiveness
• Value and Quality

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Roleplayers Professionals 1

• Public Service Procurement Orientation
• An attractive and fair market?
• Expectations of partnership and trust with
  client?
• Proposal costs versus anticipated returns?
• Competitiveness
• Transparent Parameters to Balance Quality and
  Cost
• Making the evaluation formula work
• Reassurance of professional liability
• Recognizing and rewarding integrity and ethical
  values

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Roleplayers Professionals 2

• Professionalism
• Mutual Accountability to Standards of
• Competence
• Ethics
• Innovation and Quality
• Fair Competition
• Capacity Building
• Professional Training
• Continuing Professional Development
• Annual In Good Standing Certification

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Roleplayers Professionals 3

• Institutional Identity Oversight
• Professional Associations
• Professional Registration Boards
• Advocacy on Public Interest Issues
• Fostering a positive public image for the
  professions
• Solidarity and internal support systems (legal,
  financial) to support whistleblowers and other
  champions of integrity
• Strengthening standards of competence
• Advocating for fair pay and conditions
• Sanctioning ethical misconduct
• Celebrating and recognizing exemplary ethical
  conduct

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Roleplayers Other Expert Consultants

• Growing category as complexity intensifies
• e.g. Economists, Computer/IT specialists,
  Management Consultants, Environmentalists
• Institutionally dispersed
• Lacking institutional cohesiveness
• Weak solidarity or shared identity
• Few formal associations
• Few regulatory constraints
• No formal registration requirements
• No preferential (monopoly) status in the market
• Not ethical communities
• No codes of ethics or formally articulated shared
  values

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Current Status General Guidance and
Recommendations 1

• Identify practical ways to foster a rational
  basis of trust and partnership between
  consultants and PAs
• Both parties must earn trust of the other
• Avoiding stereotypes parasitical, greedy
  consultants!
• Create linkage aspirational factors compliance
  based approaches improved performance

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Current Status General Guidance and
Recommendations 2

• Pursue big picture procurement reform driven by
  political will and ethical leadership
• Improve evaluation committees
• Professionalize public procurement of consultants