Date of adoption: 1 July 2011
The Model Law on Public Procurement contains procedures and principles aimed at achieving value for money and avoiding abuses in the procurement process. The text promotes objectivity, fairness, participation and competition and integrity towards these goals. Transparency is also a key principle, allowing visible compliance with the procedures and principles to be confirmed.
The 2011 Model Law replaces the 1994 UNCITRAL Model Law on Procurement of Goods, Construction and Services. While the 1994 text was recognized as an important international benchmark in procurement law reform, in 2004, the Commission agreed that the 1994 Model Law would benefit from being updated to reflect new practices, in particular those resulting from the use of electronic communications in public procurement, and the experience gained in the use of that Model Law as a basis for law reform. Nonetheless, the principles and main procedures from the 1994 text, the foundation of its success, have not been changed.
Why is it relevant?
The nature of procurement is that it involves discretionary decision-taking on behalf of government at all levels; procurement spending may represent 10-20 % of GDP and up to 50% or even more of total government spending. The nature of procurement necessarily involves a risk of abuse and the size of the market shows that potential losses could be significant, but also procurement involves important projects (health, education, infrastructure), which will have a major impact on economic performance and development. Accordingly, achieving value for money in procurement is critical. Responding to these key factors, the Model Law allows the enacting State to develop a procurement system that will both achieve value for money and avoid abuse.
The Model Law allows government purchasers to take advantage of modern commercial techniques, such as e-procurement and framework agreements, to allow it to maximize value for money in procurement. The Law contains procedures to allow for standard procurement, urgent or emergency procurement, simple and low-value procurement, and large and complex projects (in which, and where appropriate, the government can interact with potential suppliers and contractors to obtain the best solution to its needs). All procedures are subject to rigorous transparency mechanisms and requirements to promote competition and objectivity. All decisions and actions taken in the procurement process can be challenged by potential suppliers. While the government purchaser therefore has discretion in deciding what to purchase and how to conduct the procurement, that discretion is subject to safeguards that are consistent with other international standards - notably, those imposed by the United Nations Convention Against Corruption.
The Model Law allows the enacting State to pursue its domestic policy objectives - such as promoting economic development through the support of SMEs - to the extent that the government's international commitments allow.
The Model Law has also been prepared with a view to supporting the harmonization of international standards in public procurement, and takes account of the provisions of the WTO Agreement on Government Procurement, the European Union Directives (on procurement and remedies), the UN Convention Against Corruption, the Procurement Guidelines and Consultant Guidelines of the World Bank and the equivalent documents of other IFIs.
The Model Law is aimed at assisting States in formulating a modern procurement law. Although developing countries and States whose economies are in transition were the main users of the 1994 text, the new Model Law reflects international best practice and is designed to be appropriate for all States.