Paul R SchapperMay 2009

INTRODUCTIONINTRODUCTION

E-GP as a key component E-GP as a key component of Procurement Reformof Procurement Reform

INTRODUCTIONINTRODUCTION

E-GP as a key component E-GP as a key component of Procurement Reformof Procurement Reform

Regulatory Control ≠ Good GovernanceRegulatory Control ≠ Good GovernanceRegulatory Control ≠ Good GovernanceRegulatory Control ≠ Good Governance

- RESULT -Complex

Regulations

- RESULT -Complex

Regulations

- ISSUE -Vulnerability to Corruption

- ISSUE -Vulnerability to Corruption

- RESPONSE -Minimise Discretion

- RESPONSE -Minimise Discretion

OUTCOME -Reduced

transparency

OUTCOME -Reduced

transparency

E-GPReform

E-GPReform

Standardised Procedures

& Documents

Standardised Procedures

& Documents

Automation of basic processes

Automation of basic processes

Activity Tracking and

Monitoring

Activity Tracking and

Monitoring

Information Processing &

Reporting

Information Processing &

Reporting

Technology gives Transparency + ControlTechnology gives Transparency + ControlTechnology gives Transparency + ControlTechnology gives Transparency + Control

Control

Control +Transparency

Transparency

Control +Transparency

Without technology transparency in procurement is problematic

ECONOMIC DEVELOPMENTBusiness development

CompetitivenessTechnological Enablement

Market Access

ECONOMIC DEVELOPMENTBusiness development

CompetitivenessTechnological Enablement

Market Access

Countries Begin with Different GoalsCountries Begin with Different GoalsCountries Begin with Different GoalsCountries Begin with Different Goals

GOVERNANCETransparencyAccountability

IntegrityPublic Confidence

GOVERNANCETransparencyAccountability

IntegrityPublic Confidence

EFFECTIVENESSEfficiency

Informed ManagementValue-for-money

Quality Outcomes

EFFECTIVENESSEfficiency

Informed ManagementValue-for-money

Quality Outcomes

E-GPE-GP

DEFINITIONDEFINITION

Common understanding of Common understanding of e-GP in general and in e-GP in general and in

particularparticular

DEFINITIONDEFINITION

Common understanding of Common understanding of e-GP in general and in e-GP in general and in

particularparticular

e-GP: just another IT system?How can electronic means be used to support public procurement systems

including principles, objectives, legislation, and procedures?

What are the basic differences between e-Tendering and e-Purchasing?

e-GP and IFMIS

What is e-GP?What is e-GP?What is e-GP?What is e-GP?

E-GP is the application of technology to public procurement

An e-GP implementation strategy is a management and reform programme

E-GP is not a software programme but includes software

E-GP is not centralisation of procurement but requires centrally determined standards and procedures

It applies to the acquisition of works, goods and services.

Objectives include to improve governance and efficiency

E-GP is the application of technology to public procurement

An e-GP implementation strategy is a management and reform programme

E-GP is not a software programme but includes software

E-GP is not centralisation of procurement but requires centrally determined standards and procedures

It applies to the acquisition of works, goods and services.

Objectives include to improve governance and efficiency

E-GP reduces the need for detailed and complex regulation to prescribe all the procurement processes and allows greater focus on objectives and outcomes. Ir is the capacity to change the quality of governance that makes e-GP so significant and changes the regulatory needs

Basic SystemsBasic SystemsBasic SystemsBasic Systems

E-TenderingE-Tendering

E-PurchasingE-Purchasing

Information & reporting systemInformation & reporting system

Management system also E-RAManagement system also E-RA

Online Contract ManagementOnline Contract ManagementE-Management – Works & Supply ChainE-Management – Works & Supply Chain

Very different systems

Online Tender Service - LHFOnline Tender Service - LHFOnline Tender Service - LHFOnline Tender Service - LHF

Transparent and openTransparent and open Audit trails, access logsAudit trails, access logs Promotes competitionPromotes competition Downloads tender documents Downloads tender documents

and drawingsand drawings Uploads documents and drawingsUploads documents and drawings Request a hardcopyRequest a hardcopy Search facilitiesSearch facilities Early tender adviceEarly tender advice Electronic lodgmentElectronic lodgment Tenders Seek facilityTenders Seek facility Pending Award, trackingPending Award, tracking Awarded contract informationAwarded contract information Archived contractsArchived contracts Industry e-activationIndustry e-activation

Transparent and openTransparent and open Audit trails, access logsAudit trails, access logs Promotes competitionPromotes competition Downloads tender documents Downloads tender documents

and drawingsand drawings Uploads documents and drawingsUploads documents and drawings Request a hardcopyRequest a hardcopy Search facilitiesSearch facilities Early tender adviceEarly tender advice Electronic lodgmentElectronic lodgment Tenders Seek facilityTenders Seek facility Pending Award, trackingPending Award, tracking Awarded contract informationAwarded contract information Archived contractsArchived contracts Industry e-activationIndustry e-activation

STATISTICSCost to develop $US500,000Time to develop v2 3-9 monthsFirms registered 25,000Tenders 100 / dayStaff required 4Electronic downloads 70%ETL 50%Access rate 2000 / dayUser charges $0.0

Value Added ServicesValue Added Services

Contract Contract E-ManagementE-Management

Low Value, High VolumeLow Value, High VolumeProcurementProcurement

(E-PURCHASING)(E-PURCHASING)

High Value, Low VolumeHigh Value, Low VolumeProcurementProcurement(E-TENDERS)(E-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 Strategye-Procurement StrategyStandardised PortalStandardised Portal

e-Procurement Strategye-Procurement StrategyStandardised PortalStandardised Portal

Businesses

Business A

Business B

Business C

Business D

Business E

Business F

Business G

CHALLENGES CHALLENGES

Key success factors of e-Key success factors of e-GP implementationGP implementation

Risks of e-GPRisks of e-GP

Suggested roadmapSuggested roadmap

CHALLENGES CHALLENGES

Key success factors of e-Key success factors of e-GP implementationGP implementation

Risks of e-GPRisks of e-GP

Suggested roadmapSuggested roadmap

Why are Standards Important?Why are Standards Important?Mars Polar LanderMars Polar Lander

Why are Standards Important?Why are Standards Important?Mars Polar LanderMars Polar Lander

Example: Five clients – five systems

BuyersBuyers

SuppliersSuppliers

Alliance ContractsAlliance

Contracts

Spot Markets

+

Panel Contracts

Spot Markets

+

Panel Contracts

Reverse AuctionsReverse Auctions

Framework

Contracts

Framework

Contracts

Can Technology Complicate Public Procurement?Can Technology Complicate Public Procurement?Can Technology Complicate Public Procurement?Can Technology Complicate Public Procurement?

Technology can liberate procurement from complex rules and processes and allow a focus on better outcomes

Governance standards Governance standards

Regulatory conformance Regulatory conformance

ProcessProcess PerformancePerformance

International Trends in Public Procurement

Warehouse supplies & logistics

Reverse Auctions

Framework Contracts

Decentralisation

e-Procurement and Procurement Methodse-Procurement and Procurement Methodse-Procurement and Procurement Methodse-Procurement and Procurement Methods

Su

ccess In

dic

ato

rsFail I

nd

icato

rs

Weak strategy

Multiple sites

Devolved strategy

Technology driven

IT Project

Closed standards / closed access

Vendor driven

Weak strategy

Multiple sites

Devolved strategy

Technology driven

IT Project

Closed standards / closed access

Vendor driven

A sound Strategy

Central site

Leadership strategy

Objectives driven

Procurement Project

International standards / open access

Needs driven

A sound Strategy

Central site

Leadership strategy

Objectives driven

Procurement Project

International standards / open access

Needs driven

IndicatorsIndicatorsIndicatorsIndicators

Who is in charge of managing the e-GP agenda?

The Lessons LearntThe Lessons LearntThe Lessons LearntThe Lessons Learnt

Vision and leadership - nationalVision and leadership - national

Small Business friendlySmall Business friendly

Management not technologyManagement not technology

Get right expertiseGet right expertise

Needs vs vendor drivenNeeds vs vendor driven

International standards basedInternational standards based

ArchitectureArchitecture

Small steps not big bangSmall steps not big bang

Education and training are Education and training are

essentialessential

Vision and leadership - nationalVision and leadership - national

Small Business friendlySmall Business friendly

Management not technologyManagement not technology

Get right expertiseGet right expertise

Needs vs vendor drivenNeeds vs vendor driven

International standards basedInternational standards based

ArchitectureArchitecture

Small steps not big bangSmall steps not big bang

Education and training are Education and training are

essentialessential

.

How to activate buyers and suppliers and ensure connectivity?Applying technology to automate some existing processes is a waste of time and money

How should the use of electronic means be addressed in the procurement policy and legislation?

Which Path?Which Path?Where, when, and what to start with? Where, when, and what to start with?

Which Path?Which Path?Where, when, and what to start with? Where, when, and what to start with?

How to start? Where to start?How to start? Where to start? Lead Agency?Lead Agency? E-Tendering?E-Tendering? E-Reverse Auctions?E-Reverse Auctions? E-Contract Management?E-Contract Management? E-Purchasing?E-Purchasing? Phased or Big Bang?Phased or Big Bang? Timeframes?Timeframes? Costs?Costs? Security?Security? Policy Sovereignty?Policy Sovereignty? FMIS?FMIS? Evaluation? Pre-qualification?Evaluation? Pre-qualification? BOO? BOOT? SLA?BOO? BOOT? SLA? LegislationLegislation

How to start? Where to start?How to start? Where to start? Lead Agency?Lead Agency? E-Tendering?E-Tendering? E-Reverse Auctions?E-Reverse Auctions? E-Contract Management?E-Contract Management? E-Purchasing?E-Purchasing? Phased or Big Bang?Phased or Big Bang? Timeframes?Timeframes? Costs?Costs? Security?Security? Policy Sovereignty?Policy Sovereignty? FMIS?FMIS? Evaluation? Pre-qualification?Evaluation? Pre-qualification? BOO? BOOT? SLA?BOO? BOOT? SLA? LegislationLegislation

SelectionSelection

Contract ManagementContract Management

Bidding ProcessesBidding Processes

DevelopmentDevelopment

Preparation

Tendering

Purchasing

Execution

.E-Procurement & AutomationE-Procurement & AutomationE-Procurement & AutomationE-Procurement & Automation

ChinaCanadaJapanArgentina

BrazilArmeniaHungaryIndonesia

AustraliaBangladesh

PMIS

WorkflowManagement

Data field Requirements

Electronic Document

Construction

ContractManagement

Account Transaction

Register

Buyer Details& Authority

Register

BuyingRules

Contract Development

Register

Buyer Activity Profiles &Contract Management

Registers

Best PracticeGuidelinesChecklistsTemplates

Case Studies

ComplaintsRegister

Product/Services

Catalogue

ManagementReporting

E-Payments

External Stakeholders Portal ServicesPortal Services

Requests for TenderEOI requests

Procurement PlansPublications including

legislationInformation Services

Document DownloadsDocument Uploads

Private sectorSuppliers

Banking servicesPayment gateway

Related agenciesLKPP

FinanceAudit

SupplierRegister

Pre-QualifiedLists

SupplierActivity Register

Online Tender Box

AuditNGOs

Civil Society

Banking Institutions

E-PurchasingFramework Contracts

IMPACT EVALUATIONIMPACT EVALUATION

Performance indicatorsPerformance indicators

IMPACT EVALUATIONIMPACT EVALUATION

Performance indicatorsPerformance indicators

PerformancePerformanceQualitative and QuantitativeQualitative and Quantitative

PerformancePerformanceQualitative and QuantitativeQualitative and Quantitative

Integrated with BPIntegrated with BP

User friendlyUser friendly

Cost recovery Cost recovery

TransparentTransparent

Take-upTake-up

Satisfaction – buyersSatisfaction – buyers

Satisfaction – suppliersSatisfaction – suppliers

KPIs……KPIs……

Integrated with BPIntegrated with BP

User friendlyUser friendly

Cost recovery Cost recovery

TransparentTransparent

Take-upTake-up

Satisfaction – buyersSatisfaction – buyers

Satisfaction – suppliersSatisfaction – suppliers

KPIs……KPIs……

Parameter Key Performance Indicator

System adoption Procurements carried out electronically as a percentage of total procurement

Tenders floated electronically as a percentage of total number of Tenders

Percentage increase in Supplier base

Supplier and Buyer satisfaction indices

Bid Publication Percentage of contracts for Invitation for Tender published electronically

Percentage of notices publicized electronically

Percentage of documents distributed electronically

Percentage of invitations to tender that are re-tendered

Percentage of invitations to tender where the closing time or date has been extended.

Percentage of invitations to tender amended during tender period.

Percentage of invitations to tender that were preceded by a pre-bid notice or procurement plan

Percentage of invitations to tender that included a procurement plan.

Percentage of tender competitions accurately disclosed with process electronically stored (number & value)

Percentage of invitations to tender that are declared void per year

Percentage of contract award results published online (number & value)

Number of complaints and clarifications

Bid submission Percentage of contracts having sufficient bid submission time from time of publication including amendments as per regulation.

Average number of bidders requesting bidding documents.

Average number of bidders submitting bid.

Ratio of number of bid submissions and number of bidding documents distributed.

Average number of days between closing tenders and completion of evaluation.

Percentage of contracts that required extension of bid validity

Percentage of bids that were non-conforming

Percentage of bid openings where names of attendees, names of bidders and offer prices properly recorded

Percentage of contracts where evaluation committee formed.

Tender Evaluation Report Approval

Average number of days taken between submission of Bid Evaluation Report and approval of contract.

Percentage of contracts for which original published contract terms were re-negotiated

Average number of contracts approved under the correct financial delegation as per regulation

Contract Award Average number of days between final approval and contract award.

Average number of days between evaluation committee recommendation and contract award

Percentage of contract awards published on e-GP Portal including final contract value

Percentage (%) of contracts awarded within initial bid validity period.

Percentage of contacts awarded to non-conforming bids

Percentage of contracts not awarded to least-cost solution

Delivery within originalschedule

Percentage of contracts completed within procurement plan deadline.

Percentage of contracts with liquidated damaged imposed.

Payment Average number of days taken for release payment.

Percentage of contracts where payment was not made as per contract.

Percentage of contracts where interest for delayed payment was made.

Procurement Activity Tracking

Number of Procurement Management Information Reports published.

Number of annual Procurement plans submitted.

Percentage of complaints handled satisfactorily as per PPR guidelines.

Efficiency Average number of bidders compared with baseline

Average percentage in transaction cost reductions

Users

System Performance

Contract Management

Sample KPIsSample KPIsSample KPIsSample KPIs

Paul R SchapperMay 2009