This report examines ongoing public procurement reforms in Peru, focusing on procurement processes, participation in tenders, and the culture of integrity in the public procurement process.

Public procurement is becoming a strategic tool in Peru for achieving key policy objectives. The legislative reforms enacted in 2016 indicate a strong commitment from the government to modernise the public procurement system. In fact, the system is currently going through a transitional period, moving from excessive formalities and complex tendering processes to prioritizing results and value for money. This report examines ongoing public procurement reforms in Peru, focusing on issues such as procurement processes, participation in tenders, and the culture of integrity in the public procurement process. It provides guidance to help Peru implement reforms that enhance the efficiency, transparency and accountability of the system.

This book helps fill the void in teaching materials about the Latin American public sector. It began as two case studies of public enterprises jointly carried out by the Office for Public Sector Studies of the University of Texas at Austin, which the author directed, and the Universidad del Pacifico in Lima. Over the years, the cases expanded into

Since the 2001 CPAR, Peru has made considerable progress in setting in motion the right conditions to improve public procurement. The primary regulator for procurement, the High Council for Government Procurement (CONSUCODE), has been strengthened; the development of the e-government procurement system has begun; significant training initiatives are underway; and important amendments have been made to the procurement law and its regulations. In addition, a very good Integrated Financial Management System has been implemented in all public sector entities. These initial achievements in procurement reform have complemented a deepening democratization process and Peru's impressive macroeconomic performance over the last few years. Several institutions play important roles, defined by law, in public sector procurement. However, there is no unifying vision of the system's objectives and priorities. Consequently, the initial reforms implemented by the Government were not framed within a comprehensive policy that includes a consistent strategy on how to move forward with the reform program and establishes clear leadership. Recommended short term actions include bringing all key institutions to an agreement for a detailed reform strategy with clearly defined leadership and objectives; emphasizing prevention over control and consolidating the supervisory role of the CONSUCODE; adopting a set of tools in the short-term to facilitate implementation of the reform; carrying out in-depth market studies, reviewing the Government supply processes, and implementing cost reduction strategies; and accelerating the development of e-government procurement. Mid-term actions include further streamlining the regulatory framework; and engaging civil society in a more constructive fashion. Suggested long-term actions include significantly strengthening human resource infrastructure and the procurement capacity of local governments.

The public sector in Peru is clearly distinguished from the rest of the economy, but the existence of various legal and statistical definitions of the government makes it difficult to demarcate it clearly from the rest of the public sector. The recent constitutional reform has strengthened the decentralization process, but key fiscal aspects have yet to be defined. The current distribution of fiscal responsibilities between the central government and local governments is legally defined, but the allocation of expenditure responsibilities and intergovernmental transfers need further clarification.