Direction for Reform of Public Procurement System; Lesson From Practices

The success of country development process requires the integrated support of a good investment products of public works that conducted by the government. As a developing country, Indonesia needs many public works for infrastructure development, which resulted the government tends to be the largest consumers of construction services. Therefore, the government’s use of construction procurement in public works could be a significant tool to achieve socio-economic objectives. Observation study indicates that focus on procurement phase could be the first priority to develop improvement strategy for performance enhancement of Indonesia public work project. Therefore, some efforts have been made to improve performance of public works through procurement reform by Indonesian government. Some of the efforts demonstrate a good achievement in encouraging improvement, but the other does not provide a good result. The objective of this paper is to identify the strategies of procurement reform that used by the public clients in order to improve the performance of public works. The evaluation process will be made through observation study in a public university and a local government in Indonesia. In order to verify the observation result, interview method was used. The interview result revealed that the significant risks appearing in Indonesia public work procurement are; administrational/ legal risk, moral/ human resource risk, technical/ procedural risk, political risk, and document risk. Therefore, the study will be focused on performance factors related to the risks. The study indicated that in order to achieve good result in procurement reform, the reform should not only focus on technical or hard-system, but also focus on soft-system. The result of the study could hopefully provide some valuable lessons which can be used as a basis for the development of a new framework for overall performance enhancement of public work.