Poder Ciudadano (Transparency International - Argentina) has played a leading role in introducing innovative changes in the way municipalities function. Poder has combined the use of public hearings and the integrity pact to demonstrate that cities can save substantial sums of money through this process. This process was first tried in the city of Morón, a municipality of over 350,000 inhabitants, located in the centre of the Buenos Aires Metropolitan Area.

When Poder Ciudadano offered their Programme for Transparent Contracting to 40 local governments in the Province of Buenos Aires, the Mayor of Morón was the only one to express an interest in Poder Ciudadano monitoring the bidding for this public contracting decision from start to finish. Under the previous government, Morón had become synonymous with corruption and administrative chaos. In the previous contracting of a waste collection service, the municipal officials were known to have been the owners of the company chosen to deliver the waste collection service. This created an atmosphere of distrust and suspicion among the citizens. In order to promote civic participation and transparency in this important decision-making process, and to support the Mayor's initiative, Poder Ciudadano implemented its Programme for Transparent Contracting. This was the first time that this programme, which included the Public Hearing and the Integrity Pact, was implemented in Argentina.
The programme combines two components:

a) Holding a Public Hearing where the responsible authority convenes citizens, businesses, experts, and representatives of the opposition to express their objections and suggestions about the planned terms of the contracting; and

b) Signing an Integrity Pact wherein the government and all businesses competing in the bidding share a contract of reciprocal control to prevent the payment of bribes between the bidders and the municipal authorities.

Phase 1, Public Hearing: The municipal authorities agreed to discuss the draft tender document with the bidders and interested citizens in an extraordinary session of the City Council. Poder Ciudadano monitored the preparation of this public hearing and ensured maximum coverage in the print and electronic media, at both local and national levels. In addition, a group of independent local experts (lawyers, engineers, economists, etc.) proposed by Poder Ciudadano were invited to review the documents and present its opinions at the public hearing. The draft tender document was put on the website of the Municipality and was available in print from the office of Poder Ciudadano.

Phase 2, Integrity Pact: Poder Ciudadano introduced the IP concept to the respective bidders very early in the process, so as to insure that the new rules were established before interested parties had the opportunity to enter into alternative arrangements. All four bidders accepted the conditions imposed by the IP without objection, and signed in September 2000. The IP contained important mutual commitments made by the city and the bidders, including the following:

• A formal and voluntary no-bribery commitment by the bidders not to bribe or collude; full disclosure of all payments; to report any violations by other bidders during the bidding and during contract execution.
  
• A commitment to guarantee full transparency of the documents; public disclosure of the award and the major elements of the evaluation and reasons for selecting the successful bidder; and resolution of any conflict by national arbitration.
  
• A corresponding commitment by the Mayor of Morón (on behalf of all officials in his office) not to demand or accept any bribes, and to prevent the extortion and acceptance of bribes by other officials.
  
• Heavy sanctions by the government office against any official or bidder violating the non-bribery commitment: including damages to the municipality in the amount of 10% of the contract value and blacklisting for 5 years.
  
• Public disclosure of the award decision, including the major elements of the evaluation and the reasons for the selection of the successful bidder.
  

The results of the implementation of the tool are the following:

• Savings: The value of the contract was reduced by 35%. The Spanish company chosen offered better service for less money.

• Transparency: A forum was created where the bidders, external experts and the interested public presented comments and objections regarding the nature of the service wanted, and the terms for the bidding, before being confronted with the consequences of the decision-making process.

• Consensus: Critical decisions about the service and the process of the bidding, e.g., the arbitrator, were made by consensus.

• Better Service: The involvement of citizens and external experts resulted in the changes described above, and in the extension of the tender documents to include environmental concerns including a recycling plan for the collected waste (Pilot Plan).

• More Control: The signed Integrity Pact provided an important control mechanism for the losing bidders to monitor how the winning bidder addresses the terms of the contract, and the establishing of an independent arbitrator for cases of complaint.

• Confidence and Empowerment: The implementation of the tool opened up a closed and stigmatised public institution and empowered the citizens of Morón to monitor the meeting of the terms of contract.

Source: http://www.poderciudadano.org; http://www.transparency.org