presented by ppda at the ippu cpd meeting, hotel triangle, 20 th april 2013 1
TRANSCRIPT
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THE FUTURE OF PUBLIC PROCUREMENT
INTRODUCTION OF ELECTRONIC PROCUREMENT
Presented by PPDA at the IPPU CPD Meeting,Hotel Triangle,20th April 2013
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Since the procurement reforms began in the 1990s that resulted in the enactment of the PPDA Act in 2003, the volume, value and complexity of public procurement, has grown significantly.
The issue of improving efficiency in Government service delivery as well as ensuring value for money is now emerging as a key issue of concern.
Introduction
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As you may recall in September 2012, PPDA held a Public Procurement Symposium and Exhibition that was aimed at briefing stakeholders on the performance of the public procurement and disposal system as well as getting feedback from stakeholders on the challenges and seeking strategies to address them.
Introduction
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Among the key recommendations at the Public Procurement Symposium was the clear need to introduce E-Procurement to enhance transparency and efficiency in public procurement.
Introduction
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E-procurement is the business of purchase and sale of goods and services using an electronic system based on the internet.
An e-procurement system automates identified / specific aspects of the procurement process (from planning to contract monitoring and payment) while applying tighter controls over spending and product preferences.
What is E-Procurement?
Challenges of the Manual Process Efficiency – Process is cumbersome with large
volume of paper work with limited storage space Accountability - Poor Record keeping with
Scattered or lack of complete information affects audit trails and performance measurement.
Value for Money - High transaction costs both on the part of the service providers and also on the part of Government. These ultimately result in higher costs to the end user.
Transparency and Fairness- many complaints arising out of the procurement process resulting in delays, limited competition and higher costs to Govt.
Contract Management - Low absorption of funds and delayed payments to suppliers which affects the prices quoted. 6
Why E-Procurement?
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Benefits of E-Procurement
Transactional benefits: The Organization for Economic Cooperation and Development (OECD) estimates savings from implementation to be in the range of 5-8 % of the procurement value. Uganda spends approximately 55% of the government budget through procurement. Taking FY 3013/14, the total non-wage budget is 7,754 billion. This implies that with e-procurement implementation, savings in the range of UGX 388 – 620 billion would be made per year.
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Business case for E-Procurement
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◦Savings made due to reduced cost of procurement stemming from more efficient internal administrative processes.
◦Reduced transactional costs on bidders which translate into lower prices quoted.
◦Increased competition amongst bidders since the bidding process is open to all potential providers.
Savings Arise From:
Reduction of the procurement cycle time due to the automation of certain phases.
Since the manual processes are eliminated, there is easy access to the market and tender opportunities, easier bidding processes etc.
Timely payments to suppliers using electronic payment of invoices. This leads to better control of cash flow and efficient contract management which can lead to lower price quotations.
Efficiencies will be for both government and the private sector.
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Efficiency
Standardization - since e-procurement is majorly template-driven which makes all transactions standardized and trackable. In addition, there are reduced errors in the process and documentation for buyers.
Dematerialization – reduction in archival and storage costs, paper consumption due to use of email and reduced need to use hard copies thus providing environmental and financial benefits.
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Operational
E-Procurement strengthens Accountability by enhancing transparency and improves access to management and audit information from a central source.
Tender documentation and outcomes of the procedures (winning suppliers, rankings, final offers) are automatically posted online and available to all.
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Accountability
E-Procurement also provides more significant and timely procurement information that creates the potential for regular analysis and reporting for many stakeholders on different aspects.
The low cost efficient access to accurate, timely and comprehensive management information in e-procurement provides intelligence on spending patterns, inventory, performance and compliance enables strengthening of control, oversight, efficiency and planning capabilities as well as competition.
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Performance Measurement
Competitive public procurement requires that the bidding process is open to all potential providers.
E-Procurement automates many procurement processes including supplier selection for some types of procurement, and opens the way for new efficient procurement methodologies that can increase market access and competition.
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Competition
E-procurement can improve public governance, as it lets geographically remote PDEs actively cooperate, for example in the realization of a bundled tendering procedure, such as framework agreements.
It is also easier to share best practices, due to the availability of information and documents online.
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Governance
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Technology Availability of a suitable IT infrastructure:
NITA has a plan of having the entire country interconnected via the NBI, bulk internet and bulk licensing of software.
Integration among the related Government applications (e.g. IFMIS)An e-procurement web platform, which has to be complete and user-friendly
Critical Success Factors
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ProcessBusiness process re-engineering on the basis of shared organizational models.Adoption of standard commodity categorizations Shared logics and methodology for measuring, reporting and publication of results
Critical Success Factors
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PeopleRaising awareness towards the use of new technologies, training, networking and management techniques.Training on e-procurement tools.Technical, legal and strategic expertise.
Critical Success Factors
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EnvironmentPolitical support to promote the effective use of e-procurement.Creation and development of lead PDEs as "centers of excellence" who will lead the process and promote the diffusion of knowledge and innovative tools.Active involvement of the private sector.
Critical Success Factors
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Constitution of the Steering and Technical Committees from PPDA, NITA, MoICT, MoJCA, MoFPED, URA, UNRA, NWSC and Uganda Police.
With help from the World Bank and the UK Department for International Development (DFID), the development of the strategy to guide the implementation of e-procurement is in progress.
What Is being Done
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A stakeholder consultation workshop was held in February 2013 and it was evident that everyone is eager for this revolution in public procurement.
PPDA is working, in liaison with MOFPED and Development Partners, to identify a funder for this project.
What Is being Done…
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1. E-Framework Agreements This will be for common user items This can be achieved with minimal investment. common user items will be identified A selected entity will carry out advertisement
and selection of providers at agreed prices. A list will be put on a portal for all entities to
use. PPDA is still carrying out research on
modalities of operation. 2: other areas may include management
of large scale procurements, sustainable procurement, etc
Quick Gains
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The implementation of e-procurement is not a short term ICT project but rather a business process re-engineering project that has a long term plan and far reaching benefits.
It is therefore imperative that PPDA works closely with our key stakeholders and this can best be achieved with the cooperation, support and active involvement of the key stakeholders like yourselves.
PPDA requests for your comments on how to achieve this objective efficiently
Conclusion
Finally, I wish to reiterate the commitment of PPDA to all our key stakeholders and strategic partners in the implementation of E-Procurement in Uganda.
THANK YOU FOR YOUR ATTENTION
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Conclusion
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Questions??????????
Comments?????????
