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PROCUREMENT MODERNIZATION

The Procurement Modernization Project is designed to accelerate the Government’s procurement reform agenda and transform operation of the public procurement system in Indonesia.

In 2013, Indonesia allocated approximately Rp 672 trillion for government goods and services procurement. The allocation was 40% of the national budget of Rp 1,680 trillion. In addition, roughly 60% of foreign assistance was also spent on procurement. [1] However, the procurement system needs to improve the efficiency, accountability, and transparency; in order that the government will get better quality infrastructure for better performance. Unfortunately, there continue to be shortcomings (or “leaks”) in the procurement system.

Not only are these procurement leaks harming the nation and the people, they are also hampering the achievement of Indonesian social indicators and the quality of the infrastructure. An inefficient procurement system also leads to delays of government expenditures.

The government’s decision to establish the National Public Procurement Agency (LKPP: Lembaga Kebijakan Pengadaan Barang/Jasa Pemerintah) in 2007 was an excellent starting point to help make the situation better. The Procurement Modernization Project is designed to speed up the reform process and to help transform the government’s goods and services procurement system. In administering the Procurement Modernization Project, MCA-Indonesia collaborates with LKPP in 40-45 of the roughly 600 Procurement Service Units (PSUs: Unit Layanan Pengadaan) across Indonesia.

The Procurement Modernization Project aims to cut costs and guarantee quality that will ultimately lead toward greater procurement efficiency, delivery, and transparency. The cost savings will lead to better government procurement system, which will eventually improve the welfare of the people and the Indonesian economy.

A modernization of the government procurement processes and the professionalization of procurement officers will benefit both the officers and the communities in the provinces and districts where MCA-Indonesia works. This is the first time government procurement officers will have professional training and be part of public service providers, which will ultimately lead toward a promising career path. From this project, the officers will also learn formal guidelines and procedures of procurement and a system that will guide them in all aspects of their work.


[1] Buehler, Michael (2012), “Public Procurement Reform in Indonesian Provinces and Districts: The Historical Institutional Context and Lessons Learned from Analytical Work”