What level of competition are offset contracts subject to?
Burkina Faso score: 0/100
Single source offset contracts are rarely (if ever) justified.
There is little open competition in offset contracts, with most contracts being single-sourced.
Offset contracts are generally conducted as open competition, but circumstances are not always clearly defined. Single source contracts are often conducted without clear justification.
Offset contracts are conducted as open competition, except in clearly defined circumstances. However, single source contracts are sometimes conducted without clear justification.
Offset contracts are conducted as open competition, except in clearly defined circumstances. All single source contracts are justified and subject to external scrutiny (such as parliament or the external audit office), who have the power to reject the purchase.
The lack of legislation, specific policies or procedures organizing offset contracts, makes it difficult to ascertain whether they are open to competition. However, the practice of offset contracts is recurrent, as the “government does not apply “offset” requirements, obliging procurement authorities to approved bids from foreign companies only if they invest in manufacturing, research and development, or service facilities in areas related to the items being procured” (1). Moreover, despite most defence procurement contracts being single-sourced (2), it is hard to assess whether offset contracts accommodate better than single-source contracts. The key issue with offset contracts lies in foreign ‘investment’. Though, according to the US Department of State, “all investment specific incentives deriving from such contracts are outlined in the revised investment code, act number 007-2010/AN” (1). Of course, these incentives apply the same way to both national and international investors. No other requirement is imposed on contractors of offset contracts. For example, the government does not impose the purchase of local materials or export of a certain amount whatsoever (3).
1. “Burkina Faso Investment Climate Statement 2013,” United States Department of State, 2013, https://www.state.gov/e/eb/rls/othr/ics/2013/204611.htm.
2. Mark Pyman, Regina Wilson, and Dominic Scott, “The Extent of Single Sourcing in Defence Procurement and its relevance as a corruption risk: A first look,” Defence and Peace Economics 20, N° 3 (2009): 215–232, https://www.tandfonline.com/doi/abs/10.1080/10242690802016506.
3. “Government Defence Anti-Corruption Index 2015,” Transparency International: Defence and Security Program, 2015. http://government.defenceindex.org/generate-report.php?country_id=6265.
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