4. Procurement

Transparent, competitive, and high-quality procurement practices are fundamental to overall project governance. Before preparing a request for proposals (RFP) for procurement of ID system components, countries should make key decisions and conduct a full needs assessment regarding the overall architecture of the ID system. After defining the enterprise and functional architecture of the system in accordance with these key decisions, practitioners should work to ensure that the procurement process meets internationally recognized good practices, particularly in terms of transparency and competition. This may include market consultations with the private sector to ensure that the RFP provides appropriate requirements that reflect the latest developments and practices.

In addition to transparency and good governance, procurement practices can also have a large impact on the overall cost of the system. As elaborated in the ID4D costing study, the characteristics of the procurement process that may impact total cost include:

• Availability of in-house technical expertise: Where the entity managing the ID system lacks sufficient in-house technical expertise, there may be a risk of procurement being heavily influenced by interested vendors, which could lead to higher program costs and potential vendor lock-in. As a risk mitigation measure, such countries could consider leveraging international technical expertise to provide inputs to the procurement process management, or a full-time program manager. In such cases, care should be taken to ensure that the consulting support is independent and not directly or indirectly influenced by or an extended arm of any potential bidders or future services providers. In addition, engaging international firms could also increase costs.

• Vendor qualification process: In cases where the vendor qualification criteria and process are limiting competition—e.g., sometimes driven by risk aversion or by other considerations—bidders can solicit higher premiums.

• Over-specifying technical or process requirements: Over-specification could lead to higher investments costs and may also limit the number of potential bidders. Instead, procurement should focus on functional requirements and outcomes, if the relevant procurement rules allow.

• Appropriate use of international, open standards: Using closed standards could impact the quality of supplies, premium pricing, and create vendor and/or technology lock-in.

• Import restrictions and duties: As in other projects that require the importation of technical infrastructure, restrictions on imports and duties will impact program cost. For example, the availability of biometric devices might be low in some countries and thus might require additional time to clear customs during delivery.

In addition, the ID4D costing study identified the following good practices for procurement related to ID systems:

• Competition: It is essential for governments to undertake an open and competitive procurement process that gives no special advantage to any specific vendor or set of vendors. The creation of competition will reduce costs and has potential to generate innovation in bids and proposals. In some cases—e.g., for niche applications or where innovative solutions are required to address specific needs or challenges—wide market adoption and competition will not necessarily exist. In such cases, it is vital to complete the additional steps below to avoid vendor and technology lock-in.

• Government ownership: It is critical to have a procurement model which allows for ownership over data, as well as facilitation of seamless transfer of system management and services to alternative providers. Government should have access to the software source code.

• Specifying ongoing service agreements: Embedding the right technical support requirements from vendors in the initial contract is an important procurement consideration, as surprise fees for later maintenance can be very costly. This should include the end-of-life service to support transfer of the system and data to other parties in case the contract is terminated.

• Performance-linked procurement models: Outcome-based contracts (e.g., for private enrollment agencies in India) can be an efficient way to bringing greater vendor accountability and maximize the use of external program resources.

• Open-technology and data portability (e.g., open source software and open APIs): Opting for an open-technology interfaces will allow governments enough flexibility to easily upgrade critical system components with minimal vendor dependency, minimizing longer term costs. In addition, ensuring data portability from one system to the next will help prevent vendor lock-in.

• Connecting internationally recognized good practices with local knowledge: Promote the transfer of international know-how and good practices by encouraging the participation of local firms, e.g. through joint venture or subcontracting arrangements.

When preparing the RFP, countries should—at a minimum—complete the RFP checklist detailed in Box 6.