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  1. MAPS Initiative
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  4. Kazakhstan

Quick facts

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Countries: Kazakhstan
Year of assessment: 2018
Procurement value: EUR 17.3 billion (2017)

Principal organisation: The Ministry of Finance

Main partners:

The World Bank,Organization for Economic Cooperation and Development (OECD), European Bank for Reconstruction and Development (EBRD), Islamic Development Bank (IsDB), Asian Development Bank (ADB)

Background

The Kazakhstan public procurement system is dual. There are separate systems for the government procurement conducted by the general public administration, governed by the 2015 Public Procurement Law (PPL), and procurement conducted by Sovereign Wealth Fund Samruk-Kazyna, which accounts for the majority of public procurement spending and is covered by a different set of laws and regulations. This MAPS assessment covers both parts of the system.

The system for the general public administration is highly decentralized with about 23,200 procuring entities. The number of procuring entities and degree of centralization in the structure of the procurement system of the Samruk-Kazyna is not fully clear.

Prior to the assessment, the GoK achieved significant results in transferring the public procurement system from a manual to a full-fledged electronic system. The legal and institutional framework allows for all procurement to be conducted effectively through the Procurement Web Portal, an e-Procurement system, launched by Ministry of Finance in January 2016.

Following a request of the Government of Kazakhstan (GoK) to assess both its general public procurement system (PPS) and the procurement system of the Sovereign Wealth Fund Samruk-Kazyna, using MAPS, GoK and a coalition of international partners, led by the World Bank, the Organisation for Economic Cooperation and Development (OECD) with the European Bank for Reconstruction and Development (EBRD), Islamic Development Bank (IsDB), and Asian Development Bank (ADB) launched the assessment in 2018.

Process

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The assessment started in January 2018 and the first draft was issued in September 2019. The final report received the MAPS Seal of Approval and was published in April 2023.

The assessment included an analysis based on reviewed procurement files, procurement data collected from e-Procurement systems, several government agencies and SOEs, interviews from various Regulatory Public Bodies, as well as online survey responses from private sector actors and NGOs. In addition, a stakeholders validation workshop was held in September 2019 with participation from the public sector, SOE and private sector, audit authorities, training institutions, NGOs, and media.

While Samruk-Kazyna’s leadership supported the MAPS assessment through interviews and the provision of information, Samruk-Kazyna representatives did not provide access to procurement data or sample cases, despite repeated requests by the assessment team. The concept note for this MAPS assessment anticipated the risk that the assessment team would not have access to necessary data and information. The report presents conclusions based on a review of secondary data sources, as well as interviews.

 

Key results and impacts

  • Some of the key recommendations for both the general government system and Samruk-Kazyna were:

    • Scope of the legal framework. Evaluate whether the current exemption of certain procuring entities and procurement categories, including the procurement of Samruk-Kazyna, from the general legal framework is justified and results in value-for-money.
    • Competition. Take steps to increase competition in public procurement procedures by amongst other things:
      • Enable potential foreign bidders to participate more easily in e-procurement.
      • Make open tender a default method and specify more clearly the conditions for the use of other procurement methods.
      • Reduce the use of single-source procurement and introduce framework agreements.
      • Increase the use of price and non-price criteria.
      • Step up public-private dialogue to broaden supplier base.
      • Contract management. Clearly define the roles and responsibilities for contracts management, including requirements for measuring contract implementation performance.
      • Sustainability and professionalisation. As part of an effort to increase the performance of public procurement, the following should be considered:
        • Establish an institutionalized and sustainable public procurement capacity-building program.
        • Set out a broad SPP strategy for Samruk-Kazyna.
        • Prepare a skill-gap inventory and develop a professionalisation strategy and targeted training programmes based on this.
        • Integrity:
          • Introduce targeted measures to address corruption risks in public procurement.
          • Step up involvement of civil society and citizens.

    Based on the MAPS recommendations, the Public Procurement Authority is implementing the reform of the country's procurement systems and has already successfully completed several aspects under the Development Policy Financing operations provided by the World Bank, including amending the legal framework to address several of the identified gaps. The continued World Bank engagement would offer the opportunity for the Government of Kazakhstan and other interested development partners to explore possible ways and means to support the MAPS recommendations.


     

Lessons learned

  • Maintain a regular (informal) consultation with key stakeholders to check the assessors' correct understanding of identified issues/risks and corresponding preliminary findings and recommended reform priorities.
  • The lead assessor’s involvement and leadership in structuring and drafting the report is key to the quality and successful delivery of the assessment.
  • The lack of data and statistics hinders the full potential brought by a MAPS assessment in terms of application of consistent quantitative criteria and can undermine findings and recommendations, if additional sources of information are not sufficient. 

“Effective spending of public finances is critical as countries spend about 15-20% of GDP on the purchase of goods, works and services for the implementation of government programs and investment projects. Thus, this joint work is a timely opportunity to accelerate the implementation of modern, efficient, sustainable and inclusive public procurement systems in Kazakhstan”

Jean Francois Mathieu

World Bank Resident Representative in Kazakhstan 

Source