Economic Information Daily – The "black box" of social service procurement

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The “black box” of social service procurement
社会服务“暗箱”采购 亟须建立“头尾把关”制度

Economic Information Daily (经济参考报), July 31, 2013

After conducting investigations in Shaanxi, Guangdong, and Shanghai, the author of this article discovered that because the system for government procurement of social services is still incomplete, procurement decisions are carried out in a “black box.” When asked about government service procurement, Zhong Tao, director-general of the well-known NGO Shanxi Lalashou Special Education Center for autistic youths, laughed bitterly and said, “although Lalashou is the most famous NGO working on autistic youth education in Shanxi, because we don’t have any government background, we haven’t directly received a penny from the government.” Zhong Tao explained that the government had allocated RMB 120,000 annually to treatment for autistic, but that this money was given directly to hospitals connected to the government. The hospitals, which did not have the capacity to operate this program then transferred the funds to their organization, but not before exacting a hefty commission. Zhang also mentioned that in the process of seeking funding from the government, there is an expectation that you will take them out for meals, send gifts, etc. Another NGO leader explained that government procurement is issued with little supervision so that, for instance, when the Disabled Persons Federation issued grants of RMB 200,000 to operate disabled service organizations, a large number of organizations were founded, but once that money had run out, the majority crumbled.

Based on this unsatisfactory situation, a number of scholars raised the following three suggestions in order to establish an effective government procurement system.
1. Funds should be distributed through an open bidding system.
2. Funded projects should undergo benefit analysis, to determine whether the organization has effectively and efficiently utilized the funds provided by the government.
3. The accompanying policies should be improved — for instance, establishing a single, comprehensive platform through which open bidding is carried out, rather than allowing bidding to occur haphazardly through individual agencies.

Summary by Amanda Brown-Inz. See Article for full text. (Chinese)

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