Professionalisation of public procurement in Cyprus

Mr. Phlippos Katranis has been in the field of public procurement with the Treasury of the Republic of Cyprus for 20 years. The Treasury of the Republic of Cyprus was assigned by law the role of the Competent Authority for public procurement. This role is discharged by the Public Procurement Directorate (PPD) which represents Cyprus at the EU level and is responsible for the legal framework of public procurement in the country, including the issue of regulations, circulars and guidelines for the application of the law and the monitoring of all procurement activity. The PPD is also responsible for the development, operation and maintenance of the single eProcurement System in Cyprus which is used by all Contracting Authorities and Economic Operators involved in the procedures. It undertakes training and operates a helpdesk to support procurers and tenderers both operationally and technically.

The Treasury of the Republic of Cyprus (Treasury) is seeking to reform the field of public contracts and implement new tools to strengthen transparency and professionalism in the area of public procurement. What was the cause for this reform?

The Treasury has identified the absence of professionalisation as the root cause of the majority of the problems, challenges and complexities that impair the ability of the public sector, the local authorities and bodies governed by public law to efficiently and effectively satisfy their needs and employ value-for-money purchasing procedures. Public procurement in Cyprus is conducted by around 700 Contracting Authorities, the vast majority of which are small. Due to the limited size of their needs, the procurement activity carried out does not represent a critical mass, rendering it inefficient to invest in developing and sustaining procurement expertise at every level of the Contracting Authority.

In addition, for these small Contracting Authorities purchasing is a side job assigned to different people each time who are neither experts on the legal framework nor expert users of available tools and methodologies, leading to an inability to tackle procurement policy challenges pursued EU-wide.

According to the Treasury, “the first and most basic pillar of the reform has to do with investment in personnel and concerns the introduction of professionalism in the field of public procurement... For this purpose, we are proceeding with the creation of a new institutional framework that will include the training and certification of professionals involved in public procurement”. How will this training and certification scheme work? How does professionalism tie up with the rest of the reform pillars and what is the state of play today?

The public procurement reform was put forward to professionalise the way public authorities in Cyprus satisfy their needs employing a holistic approach to purchasing under four pillars. This strategy was approved by the Council of Ministers and today, the reform is in its implementation phase. 

The four pillars in summary are:

1st pillar – Introduction of the professional procurer

We have invested in 40 procurers from the Treasury and the largest contracting authorities to develop them into professional procurers. The goal is to develop them both academically and technically in order to be able to conquer the legal environment, the tools and techniques available to be able to lead procurements with an in-depth understanding of the dynamics, the associated risks and the success factors to navigate government purchases in an efficient and effective manner. As of last October, we have concluded the academic training and within the next quarter, the examination session will be carried out in order to ensure that professional procurers have the technical, on-the-job skills and capability to apply theory in practice and carry out complex and demanding procedures.

2nd pillar – Central Purchasing Unit

The operation of a Central Purchasing Unit (CPU) is considered an important milestone in the effort to professionalise the procurement environment in Cyprus, as it shall consist of professional procurers that will widen the coverage of Framework Agreements, implement Dynamic Purchasing Systems and enrich the electronic marketplace product base aiming at satisfying all common needs of the contracting authorities of the public and wider public sector in Cyprus. In addition, the CPU shall operate a Shared Service Centre (SSC) that will undertake competitions on behalf of the contracting authorities who do not have the capacity and know-how considered necessary. This will minimise the need for the vast majority of the contracting authorities to build procurement skills and capacity. It should be noted that  SSC  is already in operation and currently undertakes competitions on behalf of various contracting authorities for complicated tender procedures that various problems were encountered in the past.

3rd pillar – Professionalise the largest contracting authorities

Given that the 10 largest contracting authorities account for approximately 70% of Cyprus' public procurement in volume, it was imperative to include them in the professionalisation strategy put forward. At first, we selected procurers from these contracting authorities to be trained as professional procurers in order to create a professionalisation culture in the organisations. As a complementary step, various workshops will be held with the largest contracting authorities, which will be designed and customised based on the needs, risks and operating environment of each contracting authority. These workshops will be an excellent opportunity for on-the-job training and will provide guidance for the tools prepared by the Treasury and the legal framework to operate more efficiently and effectively. 

4th pillar – Inject project teams for big or strategic projects with procurement professionals 

According to our experience, it is critical that for a sizeable and/or strategic project to succeed, it should be organised and managed competently from the outset. Therefore, under this strategic approach, we aim to assign procurement professionals in each project team to work with the contracting authorities for each big or strategic project. The goal is to manage in a transparent and professional manner the procedure throughout the procurement cycle in order to maximise the value for money derived and achieve the timely satisfaction of the strategic need.  Currently, we are in the process of assigning experienced procurers attending the professionalisation scheme to be part of the project teams in a couple of strategic projects for the Republic of Cyprus.

What topics were covered by the training modules, and how does this programme address sustainability issues and strengthen green public procurement?

The whole academic training syllabus was based on the ProcureComp EU matrix of competencies, a tool designed by the European Commission to support professionalisation. The training modules covered the thirty Competencies outlined by ProcureComp EU grouped into two categories (a) procurement-specific competencies and (b) soft competencies. The professional procurers were trained at the highest proficiency level (expert). 

The professionalisation of the public procurement sector is pivotal in achieving green and digital transitions and social inclusion while tackling the areas where the performance of public procurement in Cyprus is low according to indicators monitored by the European Commission. In developing the training syllabus, emphasis was given to enhancing the ability of professional procurers to employ the right methodologies that capture the strategic objectives pursued. 

Two of the key competencies included in the ProcureComp EU are Competence 5 – Sustainable procurement and Competence 6 – Innovation procurement. For each competence, professional procurers received a full training course covering the legal framework, best practices from other EU Member States and case studies. On top of this, the team of consultants supporting PPD in the professionalisation reform required the employment of acknowledged experts to engage on the field with professional procurers to transfer knowledge, best practices and guidance on strategic procurement aspects.

Under the Treasury reform, tools and technologies are being sought. What are the new tools that the government intends to implement and what is the timetable for their implementation?

As stated above, we consider that we can better assist our contracting authorities and eventually our market through standardisation and innovation introduced by tools that abide by a once-only principle, simplification, minimisation of repetition and added value.

A key element in this reform is the replacement of the existing eProcurement system with a primary goal to further reduce the administrative burden and foster transparency, fight corruption, and improve monitoring, reporting and accountability. 

This reform will further expand the digitalisation of the public procurement process to cover the whole spectrum of procurement from the identification of the need to the conclusion of the contract. The new eProcurement system will also enable the country-wide introduction of the new innovative procedures and tools provided under the modernised procurement regime and the initiatives undertaken at the EU level. The implementation is expected to enter productive operation by December 2025.

A tool that has a focal importance and is currently under implementation is an automated tender document drafting wizard which guides the purchasers through a set of questions that vary according to the value and the type of procurement in order to automatically prepare the tender documents. This set of responses is envisaged to be introduced into the new eProcurement system to automatically create the Call for Tender Workspace and utilise the wealth of knowledge and guidance included in the Best Practices Guide already issued. In this way it is ensured that tender documents are always consistent, taking into account the latest updates of the template tender documents, the legal framework and the circulars, whilst keeping user inputs easy to review.

In addition, we have developed a tool that utilises AI technologies to support a Chatbot available to all interested parties, giving them the opportunity to ask various questions in relation to Public Procurement issues. The development has been completed and is accessible through our website.

On the transparency front, we have implemented a BI tool on our website that allows users to view and analyse data drilling down to the results of each competition. This initiative aims to improve transparency and change perceptions relating to public procurement activities among various stakeholders, in order to shake off any shadows regarding tender procedures and contract awards and build the trust of the citizens towards the procurement environment in Cyprus. Data is already available through the website for competitions awarded from 2019 onwards. 

We are also implementing other targeted tools such as the value of each technical point calculator which is rather innovative and unique. This tool gives procurers the opportunity to comprehend the weightings between Financial and Technical scores and the extra monetary value each technical point has in their assessment during the preparation of the tender. This is already in place and available through our website.

Looking ahead, how does professionalising and enhancing (sustainable) public procurement help Cyprus meet its broader strategic objectives?

It is estimated that bad practices and poor management of procurement procedures, setting aside the delays in the implementation of projects, increase the costs by at least 20%. Professionalisation aims to minimise these costs by investing in people, changing culture and applying best practices that will lead to improved efficiency and effectiveness. We envisage that this reform will make a difference, which will significantly enhance the Government’s available resources to pursue strategic objectives that benefit citizens.

We believe that professionalisation is a one-way route as public procurement is a tool that can be used to achieve a digital transition and pursue strategic aspects like green procurement, socially responsible purchasing and innovation procurement. At the same time, procurement also forms an important vehicle to maintain the competitiveness of the internal market and safeguard the sound management of public finances. It is therefore imperative that such a tool is trusted in the hands of competent, knowledgeable and skilled professional procurers.