DISEÑO MET000LÓGICO

No wholly satisfactory mechanism exists by which procurement decisions can be effectively reviewed. All mechanisms present advantages and disadvantages and the choice of which one should be implemented will be based on political reasons rather than legal ones.

However, a suggestion can be advanced here taking into consideration the elements analysed in this work.

The actual system provides an informal mean to address complaints. Although such a mechanism presents some advantages, such as flexibility, it fails to address transparently and effectively all complaints and concerns that private parties might have regarding the Guidelines’

provisions. Despite the supervisory role of the Bank, it is acknowledged that they might not be aware of individual incidents and violations which are experienced by suppliers in the course of the procurement procedure. This information is held by bidders unless they have the appropriate incentive to bring them into light. If it is considered that the procurement rules are aimed at achieving an economic and efficient contract, setting a complaint mechanism where violations can be corrected can improve the chances of the borrower to get a better contract. As Reich correctly points out, by providing sufficient incentive to participants in the procurement process,

“it can turn them into the most effective supervisors and potential enforcers and create a general deterrent effect that would dissuade bidders and agencies from infringing the rules”⁴³⁸. Therefore, given the important role that private parties can have in strengthening the enforcement of the Bank procurement procedures it is suggested that a formal review mechanism should be open to them.

In ascertaining which system should be used one would have to consider the possible defendant, the Bank, the borrower or both, and the relationship between them. It is also important to determine which factors should have priority. We have seen that time, cost, independence of the court, credibility and enforcement are some of the factors that might influence the decision. In this context, it is suggested that the review mechanism set by the Guidelines could submit complaints not to one, but to several review mechanisms, maximising the advantages that each of them could bring.

Firstly, suppliers could retain the right to address their concerns directly to the Bank in order to trigger the lender supervisory role. The Bank at its discretion could decide whether it should investigate the complaint. This would keep the line of negotiation between the lender and the borrower open and would provide suppliers, who are not prepared to litigate, with a means of review.

To bidders who could benefit from a formal review, the Guidelines should provide for a review panel. Such a panel would be constituted of nationals of the borrowing country and Bank staff. The members of the panel should be independent from the implementing agency and supervisory group. The presence of the Bank in the decisions and the independence of the panel would bring credibility to the decisions and would keep it away from internal political pressures.

The involvement of nationals of the borrowing country, on the other hand, will help to develop procurement expertise within the country.

The decisions reached by the panel will not be binding on the parties but will serve as a means to correct mistakes. The panel will recommend any amendments necessary to make the

438 Reich (1999)

procedure comply with the Guidelines. If the borrower decides not to consider the recommendations, the panel could recommend that projects are not financed by the lender. The panel would not have attribution either to award damages to injured supplier or to attribute liability to the Bank or to the borrower, but to determine whether the rules have been followed. If the complainant does not agree with the decision, or if no corrective measures are still available under a conciliatory agreement, the matter could be taken to a nationa l review mechanism if one is available.

A similar review mechanism is place under the European Community’s external aid cooperation and procurement of technical assistance, services, goods and public work. Under that regime, dissatisfied tenders, contractors and promoters of development project can submit their grievances and claims to the European Ombudsman, denouncing the Commission’s attitude as

“maladministration”⁴³⁹. The European Ombudsman is not part of the European Judiciary but an independent body which is issued with the mission to detect and investigate reported cases of maladministration, and to correct them if possible. It does not make binding decisions, but after investigating the issue recommends corrections as appropriate and tries to settle the dispute amicably⁴⁴⁰. If instances of maladministration are found the EO makes a “formal finding of maladministration with a critical remark or issues a decision together with a draft recommendation to the Commission, formally inviting it to amend its practices and settle the case in line with his recommendation”⁴⁴¹. Although the EO does not have the power to overturn the Commission’s decisions or to order the suspension of contract award procedure or to impose interim measures, it has proved to be very helpful in instances where conciliatory settlement is still possible⁴⁴².

439 The claimant must be a citizen of the Union or any natural or legal person residing or having a registered Office in a member State. Article 21 TEU and 195 TEC (Amsterdam Treaty).

440 On the meaning of maladministration and for further information on the system operated by the EO see Kalbe, (2003). For general information on powers, function and procedures of the European Ombudsman see Peters (2005).

441 Kalbe (2003).

442 See cases examined by Kalbe (2003).

The European Ombudsman example shows that the importance of not-binding decisions should not be underestimated. In fact, the choice of bringing a complaint to a formal review body offers tenders and contractors an uncomplicated and inexpensive alternative. Even if it is possible to bring procurement complaints to courts in the borrowing countries, the settlement of a formal review body that aims to investigate complaints in the particular instances of procurement financed by the World Bank would bring much more certainty and credibility to the procedure.

Moreover, any departure from the rules could be more easily detected and corrected in due time.

The way to implement this mechanism should be through the incorporation of the review panel mechanism into the Guidelines. This would legally relate the Bank and the borrower when they sign the Loan Agreement and subsequently link those two with the bidders through the bidding documents. To avoid pr oblems of interpretation about the responsibilities of the Bank, it is better to determine clearly which decisions of the Bank could be challenged and the limit up to which liability will be accepted. Although it is accepted that the panel will not make binding decisions, it is important to allow it to issue formally reasoned findings and to make recommendations for corrections as appropriate.

As to the remedies available, the panel could have the power to recommend on a preliminary basis the suspension of the procurement procedure or even the holding of a non-objection notice before the investigation is completed. This would be different from the European example. However, this departure is justified since the Bank states that it will not finance goods, works or services that are procured without the observation of the Guidelines. However, it should be noted that the panel will carefully analyse the circumstances of each case so that the procedure will not be seriously impaired. The panel would not have the power to award damages or to set aside contracts

Apart from establishing a review panel, it is also suggested that the Bank should continue to provide incentives to borrowers to build into their national system some form of addressing

complaints⁴⁴³. The adoption of such a policy would help the borrower to develop skills to deal with future proceedings and to understand better the demands of the market. Moreover, an efficient enforcement mechanism might help to increase certainty that the rules will be followed at a national level. This, in the future, might lead to a market friendly environment where private investment could start to flow.

As an immediate consequence, an efficient national system could be an alternative to tenders, contractors and other creditors that feel that their claim would be better addressed at a national level, whether because wider remedies are in place or because their rights to sue are readily recognised (say for example that national law permits actions brought by sub-contractors). Moreover, for those cases where the recommendations of the panel were not followed, complainants would still have the alternative of having a formal complaint mechanism at a national level. It is important to note that in those cases the claimant will br ing action against the borrower only.

However, it is recognised that many borrowing countries do not at present have adequate national systems. In order to implement those, governments might have to overcome internal political pressures and be able to gather wide consent so that new national legislation could be approved. Given the difficulties of achieving such reforms it is supposed that weak systems will still remain for some time. If in the future the vast majority of borrowing countries are to have an efficient national system it can be envisaged that a different approach for the enforcement of the Guidelines might need to be considered, and a greater emphasis placed on addressing the accountability of the lender.

To sum up, it can be said that although the implementation of a dispute settlement at a national level could be extremely beneficial, at the moment it should not be a substitute for the panel review set by the Guidelines, but an alternative. The parallel running of those two types of mechanism will, on one hand, improve the system actually in place by increasing the confidence

443 In fact, as commented before, the Bank, under its good governance agenda, has insisted on the establishment of a review mechanism when providing funds for the reform of national procurement systems.

of suppliers and, on the other hand, help to develop a sustainable national procurement system to the future. In this context, the creation of an enforcement system in the procurement field will help to improve the role of the Bank as a financial institution concerned with the development of its members, since it will offer lower risks to the opportunities opened to private firms as well as better quality of government contract. Moreover, the mere existence of an enforcement mechanism will reduce corruption and bad procurement practices in the borrower country, therefore increasing confidence in the market.

CHAPTER VI – SECONDARY POLICIES IN PUBLIC PROCUREMENT – AN