BENEFITS ACCRUED ON

IMPLEMENTATION OFE-PROCUREMENT SYSTEM

E-Procurement on IR is a part of e-governance initiative of GOI where public services are to be gradually shifted to electronic systems for transparency and effectiveness.

PREAMBLE

IMPLEMENTATION OF E-PROCUREMENT ON N RLY.

Phase Date of Implementation

Details

I July 05 Pilot project implemented using Application Service Provider Model (ASP). M/s HCL was the selected ASP during this phase

II Aug 08 M/s CRIS set up centralized Data Center using Railways own website i.e. ireps.gov.in

III Nov 08 In NR 100% e-tendering commenced. 3716 tenders uploaded upto 30.4.09

ACTIVITIES COVERED IN E-PROCUREMENT PROCESS

• Uploading of NIT’s online

• Uploading of tender documents with digital certificates of railway authorised person

• Free access for downloading of tender documents from IREPS by vendors using authorised ID and password

• Online bid submission digitally signed in encrypted form

• Digital tender opening without presence of vendors

• Tabulation statement generated automatically

• Compliance statement generated automatically

• In due course, as learning gets stabilized, only tabulations will be printed and offers will not be printed. Purchase officers can view the offers electronically.

ACTIVITIES COVERED IN E-PROCUREMENT PROCESS

BENEFITS OF E-PROCUREMENT

TANGIBLE BENEFITS

INCREASE IN PRODUCTIVITY

• SAVING IN TIME

• Instantaneous generation of tabulation statement.

• Saving in average time for preparation of tabulation statements

Conventional system EP system Saving

NR 23 days 1 day 22 days

TABULATION STATEMENT TIME

Section

Tender No

Item Opened on

Tabulation vetted on

Days

P05 4005080429

3 Phase A/c crank 23.9.08 31.10.08 38

P06 4006081799

MS Round 20mm 5.5.08 17.5.08 12

P08 4008086513

Signalling cable 30 core

20.8.08 22.9.08 32

P08 4008086571

Signalling cable 6 Core

15.9.08 17.10.08 32

P09 4009080045

Aluminium paint 23.9.08 13.10.08 20

P19 4019082483

A-9 Automatic Brake valve

10.6.08 16.6.08 6

Average 23.3

SAMPLE CALCULATIONS (in manual tenders)

REDUCED PROCUREMENT COST

• SAVINGS IN OVERHEAD COST FOR SUPPLIERS

• In manual tendering approximately 50% tenders were personally dropped. Approx. half of them were outstation.

• No tender dropping in e-tendering

• Average saving per tender approx. Rs 4826/-.

TENDER SUBMISSION COSTS

Tender No No of offers

Location of firms

Approx. Travel costs

Approx staying costs

Emoluments (proportionate)

1103084543 4 Delhi-3,

Mum-1

Nil

422/-

Nil

500/-

200/- *3

800/-

1101091514 3 Bhopal-1,

Delhi- 1,

Lko-1

279/-

Nil

222/-

500/-

Nil

500/-

400/-

200/-

400/-

1101091592 5 Mum-1,

Dadra-1,

Lko-2,

Delhi-1,

422/-

375/-

222/- *2

Nil

500/-

500/-

500/- *2

Nil

800/-

800/-

400/- *2

200/-

1102095972 8 Delhi-7,

Varanasi-1

Nil

306/-

Nil

500/-

200/- *7

400/-

(in Rs)SAMPLE CALCULATIONS (in manual tenders)

TENDER SUBMISSION COSTS

Tender No No of offers

Location of firms

Approx. Travel costs

Approx staying costs

Emoluments (proportionate)

1105093254 4 Chennai-1

Mumbai-1

Vadodara-1

Delhi-1

528/-

422/-

355/-

Nil

500/-

500/-

500/-

Nil

1200/-

800/-

800/-

200/-

1107091063 1 Kanpur 194/- 500/- 400/-

4108097011 20 Jaipur-2

Delhi-12

Noida-1

Gorakhpur-1

Alwar-1

Vadodara-1

Hyderabad-1

175/-*2

Nil

Nil

312/-

140/-

355/-

437/-

500/-*2

Nil

Nil

500/-

500/-

500/-

500/-

400/-*2

200/-*12

200*12

400/-

400/-

800/-

1200/-

SAMPLE CALCULATIONS (in manual tenders) (in Rs)

Tender No No of offers

Location of firms

Approx. Travel costs

Approx staying costs

Emoluments (proportionate)

4107091086 5 Kolkata-4

Mumbai-1

426/-*4

422/-

500/- *4

500/-

800/- *4

800/-

1111093504 4 Kolkata-1

Delhi-1

Jalandhar-1

Ludhiana-1

426/-

Nil

165/-

168/-

500/-

Nil

500/-

500/-

800/-

200/-

400/-

400/-

AVG/Tender 6 938/- 1444/- 2444/-

AVERAGE TENDER SUBMISSION COST PER TENDER 4826/-

TENDER SUBMISSION COSTSSAMPLE CALCULATIONS (in manual tenders) (in Rs)

IN RCF AVERAGE SUBMISSION COST PER TENDER IS Rs 9008/- approx

REDUCED PROCUREMENT COST

• SAVINGS FOR SUPPLIERS- TENDER SUBMISSION (Continued)

• E-Tenders uploaded from 25/8/08- 31.3.09 are 3286 in NR & 714 in RCF

• Roughly 50% offers in these tenders would have been dropped personally in manual tendering system

• Approximately Rs 79,29,118/- saving of manpower costs for supplier (in 7 months).

• Comparative figures for RCF are Rs 32,15,856/-

• These savings will pass on to Railways

REDUCED PROCUREMENT COST

• SAVINGS FOR SUPPLIERS- TENDER OPENING

• No vendor presence during e-tender opening

• For advertised tenders approximately 75% tenders were personally represented in opening of conventional tenders.

• Approx. half of them were outstation.

• No personal representation in e-tendering.

REDUCED PROCUREMENT COST

• SAVINGS FOR SUPPLIERS- TENDER OPENING (Continued)

• 295 nos of advertised tenders opened in NR through e-tendering w.e.f 25.8.2008 to 31.3.2009. (RCF 640 Nos)

• Roughly 75% offers in these tenders would have been attended personally in manual tendering system

• Average saving per tender approx. Rs 4826/-.• Estimated savings of Rs 10,67,752/- in 7 months.• Comparative figures for RCF are Rs 43,23,840/-• These savings will pass on to Railways

TENDER DESPATCH TIME

• SAVING OF TENDER DESPATCH TIME IN LIMITED & BULLETIN TENDERS

Tender Mode

Dispatch Time

Receipt by Vendor

Total

Manual 2/3 days 5/6 days 7-9 days

E-tender 1 day Same day 1 day

SAVING OF 6-8 DAYS

• SAVINGS ON WEEKLY BULLETIN

• Each bulletin costed Rs 25/- (cost of booklet). Distribution cost Rs 10/- extra (Postal costs)

• Approximate no of copies 625

• Net Annual savings of Rs 11,37,500/-

• These savings will pass on to railways

REDUCED PROCUREMENT COST

REDUCED TECHNICAL SUITABILITY TIME

TENDER MODE AVERAGE TIME

MANUAL 5-10 Days

E-TENDER 1-5 Days

SAVING OF 4 TO 5 DAYS

REDUCTION IN ADVERTISEMENT COSTS

Period Total advertising expenditure (Rs)

Average monthly expenditure (Rs)

May08 -Aug 08

(pre ireps period)

1,31,31,473 32,82,868

Sept08- March 09

(post ireps period)

1,56,07,889 22,29,698

AVERAGE REDUCTION OF Rs 10 Lakhs per month

INTANGIBLE BENEFITS

INCREASE IN PRODUCTIVITY

• REDUCTION IN INFRUCTOUS WORK • In manual tendering hundreds of envelops

were required to be opened, every quotation was machine numbered 2 times.

• Tenders were examined, circled and signed

• All this exercise is not required in e-tendering.

• Preparation and sale of tender documents is totally eliminated.

INCREASE IN EFFICIENCY

• Elimination of manual processes reduces the scope for human errors & inaccuracies.

• Curtailment in procurement time reduces the level of inventory requirement.

TRANSPARENCY

• E-Procurement helps in the decision-making process by keeping relevant information scientifically organized.

• E-procurement system increases transparency and probity by keeping a traceable electronic record of transactions online.

CONCLUSION

• E-procurement system, integrated with an online MMIS shall in the long run lead the Indian Railways towards a completely transparent and paperless procurement system.

THANK YOU