Public Procurement is transparent, electronic, green and free from all types of political interference

Fight corruption across Lebanon’s political system and society, thus creating a modem state based on the latest available tools and practices

Transparent, Responsive,  Accountable & Effective Institutions

1.A coherent and clear Public Procurement (PP) system that is in line with international standards and based on sound legal and institutional foundations is thought to improve competitiveness of the economy, attract quality service providers, and strengthen accountability and transparency and achieve savings on yearly basis, allowing for more fiscal space to finance public investments and for enhancing service delivery to citizens

2.Public procurement is one of the main cross-sectoral reforms that the Government of Lebanon committed to at the “Conférence économique pour le développement, par les réformes et avec les entreprises” (CEDRE) held in Paris in April 2018

1.United Nations, Public Sector Transparency and Accountability

2.WJP Rule of Law Index (Factor 2)

1.The Public Contracting System is an administrative arm of the Council of Ministers and one of the most challenging institutions to examine in Lebanon

2.The Public Procurement (PP) Directorate supervises the procurement process and approves all contracts exceeding LBP 75 million; A public tender is required for all other goods and services exceeding LBP 800,000

3.The ISF, the army, municipalities, public agencies, and autonomous institutions, are subject to special procurement systems

4.81 autonomous offices that are part of the state’s public administration are not included in the state’s budget

5.PP accounts for an average of 20% of central government expenditure and 6.5% of the Gross Domestic Product (around USD 3.4 billion in 2019) at the central level

6.Public Contracting suffers from clientelism, whereby political leaders take advantage of their position to promote the interests of their own communities

7.Contracts are awarded on the basis of cronyism and not to the cheapest/best bidder; Political interference exists when it comes to contract awards; Lebanese investors routinely pay bribes to secure contracts

8.As a result, Lebanese debt skyrocketed to unsustainable levels, without improving the quality or quantity of the services provided by the state

9.In the absence of whistleblowers’ protection legislation and of the implementation of the access to information legislation, there is very limited transparency and accountability in the procurement process

1.The legal, regulatory and policy framework is constituted by a patchwork of legal instruments, offers no approach other than open tendering for competitive award procedures, provides weak existing regulations for handling public procurement complaints that do not ensure timeliness and quality of review and resolution, has no e-procurement system in place, and provides limited access to PP information

2.This institutional framework is incomplete and incoherent. It lacks a policy making and regulatory function, a review and complaints mechanism that adequately meets the need for speed and competence, and an enabling environment for e-procurement

3.Procurement Operations and Market Practices: Procurement plans are not systematically prepared and published leading to lack of timely information to market bidders; Weak capacities in contract management and cumbersome administrative procedures; There are numerous practical barriers to the public procurement market (especially for SMEs and new entrants)

4.Accountability, Integrity and Transparency: Procedures for ex-ante control delay and complicate PP while adding administrative costs; There is no internal audit system in place; Performance audits are not carried out. There is no review body specifically designated to resolve public procurement complaints, no timeframe to review the complaints filed at the State Council, and rulings are often issued too late; There are conflicts of roles within the Court of Accounts (ex-ante control; examination of complaints; external audit) and the State Council (advisory vs. jurisdictional roles; investigation vs. adjudication), creating a lack of independence and impartiality of decisions taken; There is no common, searchable data base of the public procurement cases adjudicated by the various existing institutions; Because of a general lack of access to information, civil society is not able to monitor the incidence of fraud and corruption and the measures taken to prevent and sanction it

1.The Bidding System: Decree No. 2866 dated 16/12/1959

2.The Public Accounting Law: Decree Law No.14969 dated 30/12/1963

3.Prequalification of Contractors: Decree No. 3688 dated 25/01/1966

4.Disbarment from Participating in Public Bids: Decree Law No. 8117 dated 29/08/1967

5.Setting the Terms for Acceptance of Completed Public Works Contracts with Some Minor Flaws or Defects: Decree No. 14601 dated 30/05/1970

6.Identifying National Goods Benefiting from Preference in Public Tenders: Decree No. 10515 dated 23/07/2003

7.2017: Ministerial decision to limit the use of single sourcing by setting detailed measures and criteria

8.Several national efforts to reform PP were attempted in the past fifteen years, but failed due to the absence of national leadership. In July 2018, the Minister of Finance formed a task force made up of public and private sectors experts to follow up on the implementation of CEDRE recommendations

9.2019: Draft Procurement Law presented by GoL is being discussed in Parliament. In parallel a Methodology for Assessing Procurement Systems (MAPS) assessment is being conducted by the Institute of Finance –Basel Fuleihan with support from the World Bank)

10.The institutional framework for public procurement in Lebanon is formed by the procuring entities: ministries, autonomous public institutions, municipalities and unions of municipalities, other public bodies, and a number of Government institutions (most of them involved with control and oversight across the various stages of the public procurement process)

Policy Action

1.Legal, regulatory and policy framework: Prepare and adopt a comprehensive, modern PP law along with a range of secondary legislation applicable to all procuring entities down to the municipal level; Introduce a comprehensive range of procurement procedures proportionate to the nature and value of the contracts and formalize training and guidance for the use of these procedures; Review and revise the approach to handling complaints to ensure timely review and resolution by an independent institution; Raise transparency, improve administrative efficiency and reduce costs by introducing e-procurement

2.Institutional Framework and Management Capacity: Improve monitoring of the use of funds during contract implementation and increase the transparency of the process; Clearly define the various central functions (e.g., policy, regulation, advice, information, training; complaint resolution) in the PP system, allocate them to specific entities and give these entities adequate resources; Set up a national electronic platform for mandatory publication of procurement notices of all procuring entities and for facilitating access to PP information and tender documents; Develop a comprehensive concept for introduction and management of e-procurement and set aside resources for implementation

3.Accountability, Integrity and Transparency of the Public Procurement System: Develop and institutionalize mechanisms for enhanced consultation with civil society, both when policies are developed or amended and in the case of specific procurement projects or operations; Increase the level of transparency by making all procurement related information comprehensive and easily accessible and free of charge through electronic platforms; Eliminate gaps and overlaps in regulations and conflicts of roles among oversight institutions and other entities involved in PP and eliminate redundant control steps; Develop a policy for internal audit as well as a properly resourced plan for its successive introduction in all procuring entities at central and local levels of government; Establish an efficient complaints system to enhance early responsiveness, implement timely and effective corrective measures and allow adequate and timely reporting on the number and nature of complaints; Create an enabling and supportive environment for civil society to contribute to the monitoring and prevention of fraud and corruption; Ensure that data on accountability, integrity and transparency are generated, published, compiled and made accessible, and monitor its use for preventing, identifying and sanctioning prohibited practices

4.Include independent provisions dealing with fraud and corruption in public procurement in the Lebanese Law

5.Prevent, by law, any Lebanese politician or politically exposed person from taking part in any public tender or procurement, whether directly or indirectly