best practices in public procurementhimachaldit.gov.in › file.axd?file=2010 › 1 ›...
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e-ProcurementBest practices in Public Procurement
Ashish BhatejaAshish Bhateja
Sr. Procurement SpecialistSr. Procurement Specialist
The World BankThe World Bank
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Procurement can mean different Procurement can mean different
things to different peoplethings to different people
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What is eWhat is e--ProcurementProcurement
• e-Procurement is the application of
technology to public procurement
• An e-Procurement implementation
strategy is a management and reform
program
• It applies to the acquisition of works,
goods and services
• Objectives include to improve efficiency
and management
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What eWhat e--Procurement is NOTProcurement is NOT
• e-Procurement is not a software program
• e-Procurement is not centralization of
procurement
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India experienceIndia experience
�� Early MoversEarly Movers
�� DGS&D, Indian RailwaysDGS&D, Indian Railways
�� Andhra PradeshAndhra Pradesh
�� ONGC, GAIL, BHELONGC, GAIL, BHEL
�� Increasing adoptionIncreasing adoption
�� All Central MinistriesAll Central Ministries
�� Karnataka, Rajasthan, Tamil Nadu, Orissa, Karnataka, Rajasthan, Tamil Nadu, Orissa,
Goa, Delhi, Goa, Delhi, ChattisgarhChattisgarh, HP, HP
e-Procurement is a mission mode project under eBharat project
funded by the World Bank
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Begin goals are differentBegin goals are different
ECONOMIC DEVELOPMENTBusiness development
CompetitivenessTechnological Enablement
Market Access
ECONOMIC DEVELOPMENTBusiness development
CompetitivenessTechnological Enablement
Market Access
GOVERNANCETransparencyAccountability
IntegrityPublic Confidence
GOVERNANCETransparencyAccountability
IntegrityPublic Confidence
EFFECTIVENESSEfficiency
Informed ManagementValue-for-money
Quality Outcomes
EFFECTIVENESSEfficiency
Informed ManagementValue-for-money
Quality Outcomes
E-GPE-GP
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International experienceInternational experience
Governance
Italy, Brazil,
Australia, Thailand,
India
Efficiency
United States, UK,
Germany
Economic
Growth
Hungary, Korea
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Illustration: Illustration: GePSGePS, Korea, Korea
Public Organizations
(Buyers)
PPS Operation
Private Businesses(Suppliers)
Use
Certification-Related agencies
Ministry of Government
Administrationand
Home Affairs
Construction-related
Associations
Korea Financial Telecommu-
nications& Clearings
InstituteSuretyinsurance
Ministry of FinanceAnd Economy
Construction CALS
Linkage
Portal
Integrated
notice
Commercial products catalogue
Contracted productscatalogue
Goods classification
system
ee--Procurement systemProcurement system
ee--Procurement ASPProcurement ASP
Supplier supporting serviceSupplier supporting service
Unit contract systemUnit contract system
Linkage
User registration E-Guarantee
Supplier’s Performance
E-Payment
Documents distribution and outside linkage
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Illustration: Illustration: GeBIZGeBIZ, Singapore, Singapore
Organs
of States
Statutory
Boards
Government
Procurement
Executives
Ministries
Workplace
Public Sector
IntranetInternet
Users Users
Partner Enterprise
InternetInternet
Local
Suppliers
Global
Suppliers
Other
MarketPlaces
GeBIZ
Fixed line,
Dial - up,
Broadband,
Wireless
etc.
•GeBIZ is an Integrated One-Stop Electronic Business Centre which
provides a convenient channel for Public Sector officers to interact with
their trading partners for procurement and revenue tender activities &
enables suppliers to trade with the entire Government
•Joint collaboration between Min of Finance, Defense Science & Tech
Agency and Infocomm Development Authority of Singapore
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Dimensions of eDimensions of e--ProcurementProcurement
LeadershipLeadershipProcess
Re-engineering
Technology
Change
Management
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TechnologyTechnology
�� Relates to technological standards and Relates to technological standards and
rulesrules
�� Benefits all stakeholdersBenefits all stakeholders
�� Transactional efficienciesTransactional efficiencies
�� Improved access & management of Improved access & management of
informationinformation
�� Easier document transmissionEasier document transmission
�� Standard processesStandard processes
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Business Process ReBusiness Process Re--engineeringengineering
ee--GP is more a business initiative aimed at GP is more a business initiative aimed at procurement reforms rather than a procurement reforms rather than a technology implementation, leading to:technology implementation, leading to:
�� Simple, consistent, modern processesSimple, consistent, modern processes
�� Enhancing management and audit dataEnhancing management and audit data
�� Better supplier managementBetter supplier management
�� Efficiency, security and lesser need for Efficiency, security and lesser need for discretiondiscretion
�� Improved understanding through structured Improved understanding through structured training/ capacity building initiativestraining/ capacity building initiatives
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Change managementChange management
Most critical dimension for success of eMost critical dimension for success of e--GP reformsGP reforms
�� Business leadershipBusiness leadership
�� Process dimensionsProcess dimensions
�� IT dimensionsIT dimensions
�� Institutional arrangementsInstitutional arrangements
�� Responsibility & AccountabilityResponsibility & Accountability
�� Training & capacity buildingTraining & capacity building
�� Stakeholder participationStakeholder participation
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Elements of eElements of e--GP strategyGP strategy
Information
& Comm Technology
Business Process
Re-
engineering
Change
Management
Policy
Platform
Process
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Where to start?Where to start?
Execution Securities
High Volume, Low Value
Tendering
Low Volume, High Value
Purchasing
Preparation Selection
ChinaCanadaJapanArgentina
BrazilArmeniaHungaryIndonesia
AustraliaBangladesh
There is No Single Starting PointThere is No Single Starting PointThere is No Single Starting Point
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Scope of eScope of e--ProcurementProcurement
Supplier Supplier SelectionSelection
NotificationNotification
PublicationPublication
Procurement Procurement
NeedNeed
SubmissionSubmission
EvaluationEvaluation
FeedbackFeedback
MonitoringMonitoring
PaymentPayment
OrderingOrdering
UPSTREAMDOWNSTREAM
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Sub Elements of eSub Elements of e--Procurement Procurement
processprocess
�� Government procurement processes Government procurement processes
require four different systems require four different systems
�� Contract DevelopmentContract Development
�� Tendering or Bidding,Tendering or Bidding,
�� Purchasing or Quoting, Purchasing or Quoting,
�� Contract Management or Execution Contract Management or Execution
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e-Procurement Frameworkee--ProcurementProcurement FrameworkFrameworkPortal to e-Government Procurement
Public PurchasingPublic Purchasing Public TenderingPublic Tendering
Contracted Suppliers
Buyer Profiles
Search & request info
RFQ & Reverse Auctions
Shopping trolley requisition
Order approved / sent / accepted
Receipt of goods / services
Supplier invoice & payment
Supplier performance
Transaction reports
Buyer fees Supplier fees
Summary reports
Contract
Development
Contract
Development
Contract
Managem
ent
Contract
Managem
ent M
anagem
ent
Managem
ent
Form
atForm
atPlan
Plan
Single Supplier Registry
Single Buyer Registry
Drawings Online
Core O
nline C
ontract
Managem
ent
Goods &
Services
Constru
ction
Core T
ender D
evelopment
ETA
Program
Development
Project
Management
Tender advert,
lodge & award
Tender
Watch
FMIS
Data Warehouse & Reporting
Inventory
Government Contract Policy & Management
The functionality is complex (but not excessively so) and there is more than one possible starting point
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Phased implementationPhased implementation
Phase 1 Information Service
Tender AdvertisingDocument Down-LoadsResults Disclosure
Bid QualificationBid Up-LoadsBid Processingetc
Phase 2 Contract Management
Contract Development
Phase 3a Catalogue Purchasing
Framework/Rate ContractsOnline TransactionsOnline Workflow
Phase 3b Online Bidding
Reverse Auctions
Phase 1 Information Service
Tender AdvertisingDocument Down-LoadsResults Disclosure
Bid QualificationBid Up-LoadsBid Processingetc
Phase 2 Contract Management
Contract Development
Phase 3a Catalogue Purchasing
Framework/Rate ContractsOnline TransactionsOnline Workflow
Phase 3b Online Bidding
Reverse Auctions
E-TenderingE-Tendering
E-Contract Management
E-Contract Management
E-PurchasingE-Purchasing
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Typical Implementation ScheduleTypical Implementation ScheduleYear 2 Year 3Year 1
Central Site, TendersCentral Site, Tenders
Bid SubmissionsBid Submissions
Results & PlansResults & Plans
Auto Search Auto Search
`Online PaymentsOnline Payments
Analysis & Scoping Analysis & Scoping
`Standard Documentation & TemplatesStandard Documentation & Templates
`Policies, Reg & Guides Policies, Reg & Guides
`Bid Documentation & Plans Bid Documentation & Plans
`E-Contract Management - ConstructionE-Contract Management - Construction
`Goods & Services CataloguesGoods & Services Catalogues
Price Models
`Purchase Orders & InformationPurchase Orders & Information
`E-TransactionsE-Transactions
`Reverse AuctionsReverse Auctions
`Enabling Strategies – Infrastructure Enhancement, Business / Gov Connectivity & Awareness,
Legislation, HR.Policy, etcetera
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Value Added ServicesValue Added Services
Contract Contract
EE--ManagementManagement
Low Value, High VolumeLow Value, High Volume
ProcurementProcurement
(E(E--PURCHASING)PURCHASING)
High Value, Low VolumeHigh Value, Low Volume
ProcurementProcurement
(E(E--TENDERS)TENDERS)
Governments Governments BusinessBusiness
Contract DevelopmentContract Development
Web Based Contract Web Based Contract
ManagementManagement
Government Electronic Government Electronic
MarketMarket
RegistriesRegistries
CataloguesCatalogues
Electronic Tender LodgementElectronic Tender Lodgement
Email AlertsEmail Alerts
Queries & AdviceQueries & Advice
Tender AdvertisingTender Advertising
Policies & LegislationPolicies & Legislation
Departments
Department A
Department B
Department C
Department D
Department E
Department F
Department G
e-Procurement Strategyee--Procurement StrategyProcurement Strategy
Businesses
Business A
Business B
Business C
Business D
Business E
Business F
Business G
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Departments
Department A
Department B
Department C
Department D
Department E
Department F
Department G
ee--Procurement Separate PortalsProcurement Separate Portals
Businesses
Business A
Business B
Business C
Business D
Business E
Business F
Business G
E-GP Portals
www.Version A
www.Version B
www.Version C
www.Version D
www.Version E
www.Version F
www.Version G
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High set up & maintenance
cost
High set up & High set up &
maintenance maintenance
costcost
Finance management
centric
Finance Finance
management management
centriccentric
Legacy Systems
Legacy Legacy
SystemsSystems
Open standards
based
Open Open
standards standards
basedbased
Market centricMarket centricMarket centric
Web systemsWeb systemsWeb systems
Existing Existing
Banking Banking
InfrastructureInfrastructure
FIN
AN
CIA
L S
YS
TE
MS
FIN
AN
CIA
L S
YS
TE
MS
FIN
AN
CIA
L S
YS
TE
MS
E-P
RO
CU
RE
ME
NT
EE-- P
RO
CU
RE
ME
NT
PR
OC
UR
EM
EN
T
Financial IntegrationFinancial IntegrationFinancial Integration
Purchasing / Purchasing /
Commerce Commerce
CardsCards
Process mapping
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Must havesMust haves
• Vision and leadership
• Have a strategy with objectives
• Small Business friendly
• Management not technology
• Get right expertise
• Needs vs. vendor driven (don’t listen to vendors
until you know more about your needs than they do)
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Must havesMust haves
• International standards based
• Small steps not big bang
• Education & training are essential
• Understand full scope including workflows, data captures, etc
• Customize departmental needs around common core architecture
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What works (and what doesnWhat works (and what doesn’’t)t)Success Markers
Fail Markers
• Multiple sites
• Devolved strategy
• Technology driven
• IT implementation
• Closed standards / closed access
• Vendor driven
• Multiple sites
• Devolved strategy
• Technology driven
• IT implementation
• Closed standards / closed access
• Vendor driven
• Central site
• Leadership strategy
• Objectives driven
• Procurement reforms
implementation
• International standards /
open access
• Needs driven
• Central site
• Leadership strategy
• Objectives driven
• Procurement reforms
implementation
• International standards /
open access
• Needs driven
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ee--GP is a journeyGP is a journey
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Further referencesFurther references
�� MDB eMDB e--GP guidelinesGP guidelines
www.mdbwww.mdb--egp.orgegp.org
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Illustration: Time SavingsIllustration: Time Savings
3 hours185 hoursTotal
0.5 hour8 hoursContract preparation and other documents
1 hour40 hoursEvaluation and what-if scenarios on 18.000
records
1 hour125 hoursData capturing – 10 fields per record at avg. 5
characters per field at 0.5 second per character
for 2.000 items and 9 suppliers
0.5 hour12 hoursPreparation of tender
1.4 Mb disk
space
4.500 pages500 A4 pages mailed to 9 suppliers
Web-basedPaper-basedActivity
Source: Intenda Ltd., Pretoria, South Africa, 2003