chapter 18: doing it
ourselves – direct Works
About this Chapter
Direct implementation of works by local government is unfashionable but it has worked well in the past. This chapter discusses the risks and merits of Direct Works. It provides recommendations on circumstances in which use of Direct Works may be justified and on safeguards that may be employed.
Direct Works or “Force Account” means implementation of works by a department of national or local government, often called a Public Works Department, whose staff are civil servants on the local government payroll. This was the traditional approach to tasks such as maintenance of the local road network in many countries in the past and, when properly funded and effectively managed, often resulted in a reliable and good-quality service. When local governments implement labour-intensive schemes by employing workers directly this is sometimes called “Community Contracting” but it is more accurate to call this modality Direct Works.
Modern thinking is normally to discourage direct implementation of works in favor of contracting out works to the private sector through competitive tendering, or where appropriate, Community Contracting. The reasons for this are that:
• Direct Works is seen as inefficient – private sector contractors are able to manage personnel and equipment more efficiently and so implement works more cheaply;
• The existence of a Direct Works department creates pressure for works to be programmed and funded through the department, to give the department a reason to exist and to create rent-seeking opportunities for the staff of the department. This results in supply-driven pressures on the planning and budgeting processes of the local government.
• Direct Works results are non- transparent. Cost control is difficult and abuses, for example, misuse of fuel, supplies and materials or of major equipment items, are easy to commit and difficult to detect;
Cambodia – In the mid-1990s, the UNDP- supported decentralization program supplied well drilling equipment to the Provincial Department of Rural Development. About two years later, the UNDP advisers attempted to establish the location of this equipment and the uses it had been put to. The only well known to have been drilled proved to be a test well in the car-park of the UNDP office. When funding for a well drilling program became available it was decided that works would be contracted out. It was strongly suspected that the drill was now in use by one of the contractors bidding for the work. Having considered the matter, the UNDP advisors decided that this represented the most economically efficient allocation of the resource (the drilling rig) and so did not pursue the matter.
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• Local governments tend to experience particular difficulty in managing fleets of expensive equipment, with high and sometimes unexpected repair costs and large periodic capital costs for replacement.
Furthermore, in many of the countries where UNCDF supports local development programs, local governments have public works departments that have ceased to function effectively – inoperable equipment, absentee staff and non-existent (or invisible) operating budgets. In the past, donors wishing to support implementation of works projects were often met with proposals to reactivate these departments by funding equipment and spare parts purchases as well as the materials and supplies needed for the job in hand. There was no long-term plan for long term sustainability, so on completion of the project, the department went back to its former state until the next donor arrived. This common story did much to establish the primacy of the contracting-out model.
However, there may be circumstances in which Direct Works may be either the most cost-effective solution or the only solution available (see box).
A distinction should be made between a proposal to make use of an existing capacity of a functioning Direct Works department, and a proposal for capital investments to create such a capacity or to restore a capacity that has degenerated. It will rarely be appropriate to support a proposal for investment in major capital equipment for a Direct Works department. However, if the Direct Works department has serviceable equipment and capable staff, the financial cost of Direct Works may well be much less than the cost of the same works contracted out to the private sector. Very likely, the local government does not have the discretion to lay-off or re-deploy the staff even if it wished to do
so. In these circumstances, it is difficult to argue that the Direct Works option should not be considered.
Before selecting the Direct Works option, the following questions should be considered: • Does the Direct Works department have the capacity to undertake the work?
• What are the factors that make the proposed work unattractive to the private sector? Could the work be packaged in a way that would make it more attractive to bidders (for example, by authorizing multi-year contracts for road maintenance)?
• Are suitable arrangements for cost-control in place?
• Is there a clear separation between the planning and budgeting functions of the local government, on the one hand, and spending departments, including the Direct Works department, on the other?
The use of force account may be justified where:
a. Quantities of work involved cannot be defined in advance;
b. Works are small and scattered or in remote locations for which qualified construction firms are unlikely to bid at reasonable prices;
c. Work is required to be carried out without disrupting on-going operations;
d. Risks of unavoidable work
interruption are better borne by the Borrower than by a Contractor; and e. There are emergencies needing
prompt attention.
Source: World Bank, Guidelines for Procurement Under IDA Loans and IBRD Credits.
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Chapter 18: Doing it Ourselves – Direct Works
Planning of maintenance Works
New investments for local development are usually identified through a participatory planning process. However, routine maintenance, which is the task most often implemented through Direct Works, cannot be planned by participatory planning. Efficient programming of routine maintenance is a technical task and the technical capacity for this task may be located in the Direct Works department. This can create a conflict of interest. If possible, the function of maintenance planning (programming of works) should be separated from the implementing function.
cost control
Budgets for Direct Works should be prepared using the most objective means available. If possible, the budget should be prepared independently of the Direct Works department. Cost control during implementation should be monitored independently of the Direct Works department, for example by finance department officials.
Labour intensive direct Works
Direct Works may be implemented through, or combined with, labour-intensive work methods designed in part to generate employment in the local community. This approach can include the employment of “length-persons” who are charged with keeping an allocated length of road in good condition in return for a monthly fee as well as larger schemes with extensive earthworks or similar tasks carried out by labour.
In principle, labour intensive works may be carried out:
• By competitive tendering – where employment of local labour, including the number of workers, employment conditions, equal opportunities for women and men and so on are included in the contract conditions;
• By Community Contracting (see Chapter 17); • Or by Direct Works.
However, for small routine maintenance works contracting out may be difficult. This is particularly likely if the procurement or budget rules do not allow the local government to make a multi-year contract. Community Contracting may not be a good option if the works are a public good without strong community or local characteristics, for example, a feeder road with a significant amount of through traffic. Therefore, for tasks such as labour- intensive routine maintenance of feeder roads, direct employment of labour by the local government may be the best option.
Labour intensive Direct Works arrangements are potentially vulnerable to abuse – particularly misuse of funds. To reduce this risk, the technician or department responsible for estimating the cost and for technical supervision should not also be responsible for hiring and paying the workers. Audit arrangements should carefully check that the total amount paid to the workers is the same as the amount shown in the accounts (for example, by taking a random sample of workers from the payroll record and interviewing them to find out how much work they did and how much they were paid).