Procurement+Impediments+and+Restrictive+Practices+-+The+Supply+Chain+Model

Public (Government) and Private (Commercial) sectors sometimes use the purchasing & procurement process to inadvertently engage in restrictive trade practices. Special gover nment subsidies support fledgling (or sometimes failing) industries by discounting domestic products or keeping prices below the competition on exported items. Large corporations may be able to drive out new competition by temporarily “ dumping” quantities of their product at artificially low prices. Governments and trade unions may respond with unsanctioned __ subsidies __ and __ countervailing measures __ (SCMs) and limited (closed) competition and discriminatory __ source/origin __ requirements favouring domestic vendor eligibility. Other impediments may occur as a result of restricted competitive practices during the commercial selection process.
 * Purchasing Impediments and Restrictive Practices (trade barriers) **

// “Procurement Impediments” are any unnecessary or unauthorized process or requirement that complicates, delays or impairs the effectiveness and credibility of the purchasing & procurement process //. Examples include fraud, waste of resources and abuse of position in source selection, restrictions on product source/origin and subsidies that artificially lower product prices. // "obstacle to trade" (i.e. trade barriers) // by EU definition //refers to any trade practice prohibited by international trade rules which injures (material injury involving money) a party affected by that practice giving them a right to seek elimination of the effect of the practice in question.// These international trade rules are essentially those of the WTO and also those set out in bilateral agreements with third countries to which the EU is a party. **// Specific problem areas & remedies //** > d improperly categorized) Product Specifications with conflicting acceptance criterion that would delay payment authorisation
 * // Definitions //**
 * Improper Proposal Evaluation resulting from poor oversight and disparate evaluation criterion
 * Non-Standard (an
 * A perception of restricted or Unfair __ competition __ or sole source selection requirements resulting from restricted vendor lists and government source/origin restrictions that favour local vendors or further political agendas
 * Inadequate Preparation and Licensing Documentation for Shipment may require the expertise of an intermediary service specialist such as the freight forwarder or exporter

A principle reason for purchsing delay is inadequate planning. After needs assessment, the first step in every Procurement is to complete a clear product description (also "Work Scope", "Terms of Reference" and "Specification" depending upon complexity and nature of the procurement). An accuracte, complete and non-restrictive specification is essential to an efficient transaction. Problems in the specification can cause delays during packaging, shipment, customs clearance, acceptance and payment. Errors and omissions may also result in user dissatisfaction and excessive cost. Standardised product categories is one step toward harmonising specifications. Buyers should search out their product category in the [|Harmonised System]code matrix. Product specifications must be accompanied by planning criteria essential for its use: Delivery Date, Place of Delivery, Cost to the user, Warranty Maintenance and any special terms (such as licensing and distribution rights) that may affect its productive application. When all of these factors are identified, the Statement of Work can be distributed through a "Solicitation" or "Tender Offer" to potential vendors who are eligible, qualified and interested in providing "Bids", "Quotes", "Proposals", or "Offers". The vendor or "supply source" is selected and a Contract Agreement can result that identifies and protects the user needs. The "Buy" (from the selected vendor) takes place and the product is delivered ("Shipped") to the user for acceptance and Payment or "BUY-SHIP-PAY". These may be summarized in a "Procurement Plan" that identifies the trade process. The Plan may be a standard, repetitive method used and adjusted over time or a first-time model developed for new items coming onto the market. Each International Trade action involves the following three supply chain basics. The three were identified and prioritized in UNCEFACT Recommendation 18 __INSERT__ and have since formed essential building blocks in many Trade Facilitation initiatives __INSERT__. The three basics include commercial processes, logistics, regulatory processes and payment processes. Parties involved in these processes include representatives of the user Customers, product Suppliers, governmental Authorities and supply chain Intermediaries (such as Transport Service Providers and Financial Institutions who provide specialised services to each of them). Any trade facilitation project will concentrate on parts of the supply chain. The International Supply Chain Reference Model (Buy-Ship-Pay model) may be used to help identify the parties and processes involved. The figure below provides a pictorial representation of the Commercial, Logistical, Regulatory and Financial processes involved. SEE BELOW Actual and perceived improper bid evaluation can be avoided by additional staff training and increased oversight. Vendor participants are the most incentivized parties to any evaluation. Transparency in the evaluation process and full practical disclosure of evaluation results to all interested parties can prove the most effective inducement to a timely and impartial bid evaluation.
 * // Other checks for saving time //**

Consider and promote the use of existing standards before creating tailor-made specifications. The existing standards, and especially the imminent convergence of UBL and c-Catalogue, are expected to facilitate the exact specifications upon which e-Catalogues are used in public procurement.

Harmonise the use of product description and classifications schemes, establishing also specifications for describing products/services within e-Catalogues. This harmonization can be achieved either by establishing one, unique product description and classification scheme, or by establishing a framework of interoperable co-existence of many schemes.

__ Deficient documentation __ is a major reason why both customers and vendors use intermediary service providers to handle cross-border shipments. The “3 and 4 corner processes” are examples of this third party contractual relationship in prompt payment and invoicing.

__ Import or export licenses authorise __ the import or export of products which are subject to quotas. Oversight and processing incentives can expedite delivery of licensed products. Licenses are issued immediately by EU countries when the "first come, first served" principle is used. In other cases, they are issued within ten days of notification of the EU decision indicating the quantities to be distributed.

COMPETITION ASSESSMENT GUIDANCE COMPETITION ASSESSMENT TOOLKIT, VERSION 2.0 © OECD **51**
 * // Links & References //**

UNECE Recommendations on regulatory cooperation and standardization policies []

UNECE Creation of International Agreements on Conformity Assessment in Technical Specifications []

The provides access to several recent as well as archived studies on the effects of procurement impediments & non-standardized technical specifications []