Proposalfor

e-Procurement systemfor

Developing country

2015

ContentsⅠ. Background

Ⅱ. Introduction

Ⅲ. Prerequisites

Ⅳ. Configuration

Ⅴ. Major Functions

Ⅵ. Investment Cost Analysis

14

18

2

Ⅶ. Conclusion

4

6

7

19

* Appendix

1. System Components

2. Related Laws (In Case of Korea)

3. Acronym

Ⅰ. Background (1/2)

Government of developing countries is trying to achieve “Knowledge based Economy” from its “Agriculture based Economy” thru National Economic Development Plan with various projects including “E-Government and E-Governance”.

Agriculture Based

Economy

KnowledgeBased

Economy

By 2030

NEDPIII

NEDP I

NEDPII

NEDPIV

E-Government and E-Governance

Education

Human Resource Development

Infrastructure, Equipment and Content

Economic Development

Social Development

Private Sector Development

Rural and Community Access

Legal, Regulatory and Institutional provisions

National Security Law and order

Ⅰ. Background (2/2)

“E-Government & E-Governance” is the key project among other various projects because it will play a brain role for other projects.

E-Government

&

E-Governance

Education

Human

Resource

Development

Infrastructur

e, Equipment

& Content

Economic

Development

National

Security Law

& Order

Social

Development

Private Sector

Development

Rural &

Community

Access

Legal,

Regulatory &

Institutional

Ⅱ. Introduction – Needs of e-Procurement system

e-Procurement system is essential for providing guarantee of fairness & transparency for purchasing quality goods and services needed by government administration.

Needs Explanation

Pursuit of fairness

& transparency

• Ensure transparency through e-Procurement system and guarantee fairness by

hiring qualified suppliers selected through competition

Support of customer-centric

procurement administration

• Increase the satisfaction of public institutions using e-Procurement system by

improving the quality of procured items and widening their selection of items

Change in purchase method

according to demand purpose

• Reduce the time period required for purchase and ensure more administrative

responsibility, competition, fairness and transparency

Expanded purchase service• Require outsourcing for service & design etc. as one of the core paradigms of

procurement administration

Global trend toward reinforced e-Procurement

• Emerge as a new paradigm drawing attention from world organizations as well as

individual countries

Ⅱ. Introduction – Advantages of e-Procurement system

e-Procurement system will provide government administration E-Gov. readiness, fairness, transparency, cost reduction, and innovation of purchase process etc.

Advantages Explanation

E-Government readiness

enhancement

• Provide opportunities for citizens and businesses to actively participate in

knowledge-based economy via e-Procurement system

Ensure fairness &

transparency on procurement

• Ensure transparency through e-Procurement system and guarantee fairness by

hiring qualified suppliers selected through competition

Reduce

procurement cost

• Save the cost for the procurement process through applying e-Procurement

system via on-line, e.g. Internet, compared to off-line method

Innovate procurement

process

• Upgrade & innovate the purchase process from off-line & face-2-face interaction

to on-line (Internet) & no-need-of-face interaction

Ⅲ. Prerequisites

For deploying e-Procurement system, there are various prerequisites such as preparation of related law and IT infrastructure and system etc.

Prerequisites Required actions

Law and legislative

provision

• Law & legislative provision for applying electronic document & e-signature

• Law & legislative provision for e-payment procedure

• Amendments of law for procurement process if necessary

IT infrastructure

and

system

• IT infrastructure and network environment

• e-payment system and bank payment system related issues

• National security system and its standardization for encryption and decryption etc.(PKI based certification system)

Ⅳ. Configuration

Conceptual DiagramCertification Authority Institution

• Issue Certification

• Validity Verification

Government

• e-Bidding

• e-Contract

• e-tax-invoice

• Monitoring

• e-Signature / Verification

Provider

• e-Bidding

• e-contract

• e-Tax-invoice issue/Receive

• Guide mail / SMS Receive

Internet

I/F DB

e-Signature / Signature VerificationEncryption / Decryption

e - mail

SMS

e - mail

SMS

ERP

e–Procurement system

Purchase

information

Process

Result

Purchase

information

Process Result

Copy

Contract Print

Tax-Invoice Print

e-Procurement System Configuration (PKI based certificate)

Function Other Dept. Purchase Department Provider

ProviderManagement

e-Bidding *

e-Contract *

e-Tax Invoice

: Off-line

Unapproved

Application for registration

Submit

LoginApproval

No

Yes

ProviderEvaluation

Construction / Purchase Request

Submit estimate

Make estimate

Notice of tender

Opening of estimate

Re-bidding

Evaluation bidding & Award

No

Yes

Yes

Accept

SelectProvider

Check Contract

Registration / e-Signature

Submit documents

Request Contract

Internal Approval

Make a Contract

Check the Document / e-signature

BiddingNo

Issue e-Signature

Check e-Tax InvoiceIn Stock / check Make e-Tax Invoice

Verification Sign

Sending

Printe-Tax Invoice Management

: On-line e-Procurement flow chart

Ⅳ. Configuration

* Note) More detail information on e-Bidding* & e-Contract* described following page.

Purchase Request Check

Unit pricecontract

Nullity

Bid document

Notice of tender

Opening of estimate

Contract request

Make estimate

Submit estimate

Purchase Information(Contract Information)

No

Yes

No

Yes

Other departments Purchase department Provider1 2

3

4

5 6

78

9

1. Other departments request Purchase request to purchase department

2. Check of purchase request3. Whether unit price contract or not, decide bid or contract

request

4. Make the bid document※ How to bid

- nominating competition, general bid, reverse bid private contract

※ How to select successful bidder- minimum, limited minimum, assessment,

estimate, private contract

5. Notice of tender / estimate request (e-mail, SMS)

6. Make the estimate according to the notice

7. Submit estimate with e-signature (encrypted)8. Open the estimate by whom is designated (decrypted)

- nullity or selection successful bidder

9. Contract request when successful bidder selected

: e-Procurement system

: Legacy system

e-Bidding Procedure

Ⅳ. Configuration

MRO purchase request Check

MRO

Nullity

Bid document

Notice of tender

Opening of estimate

Contract request

Make estimate

Submit estimate

Purchase Information(Contract Information)

No

Yes

No

Yes

Other departments Purchase department Provider1

2

3

5

6 7

89

10

1. Other departments request MRO request to purchase department

2. Check of purchase request3. Whether MRO or not4. Whether unit price contract or not, decide bid or contract

request 5. Make the bid document※ How to bid

- nominating competition, general bid, reverse bid private contract

※ How to select successful bidder- minimum, limited minimum, assessment,

estimate, private contract

6. Notice of tender / estimate request (e-mail, SMS)

7. Make the estimate according to the notice

8. Submit estimate with e-signature (encrypted)9. Open the estimate by whom is designated (decrypted)

- nullity or selection successful bidder

10. Contract request when successful bidder selected

: e-Procurement system

: Legacy system

MRO Procedure (Market place for frame agreements or unit price)

Ⅳ. Configuration

Unit price contract

Yes4

ProviderContract department

Check

Check1

No

Yes

Information of purchase

Make contract

Send contract

Contract sign

Purchase Information

Register document

Contract sign

Contract print

2

3

4

56

7

8 9

6

1. Make a contract with the registered standard form

2. Send the contract with e-signature (via e-mail, SMS)

3. Check the content of the contract

4. Register the needed documents (e.g. Guarantee securities)

5. Sign the contract with provider’s e-signature- Use e-mail, SMS to notify the person in charge

6. Check the contract for final confirm and verify the e-signature- No : When e-signature verification failed- Yes : When e-signature verification is successful

7. Head office sign the contract with e-signature after reviewing

8. Send the purchase information to the legacy system

9. Provider prints & reads the final contract

: e-Procurement system

: Legacy system

e-Contract Procedure

Ⅳ. Configuration

Procurement Workflow

Web Application Server(Oracle9iAS, iPlanet, Web Logic, JEUS, …)MTS

Security [PKI]

Web Server( IIS, Apache, iPlanet, …)

XML / HTML

Supplier(IE 5.5 or Higher)

FireWall

ASP JSP

DCOM Java Beans / Servlet

Business ModuleContainer

ADO Database Connector

Database(Oracle, SQL Server, …)

Enterprise Application interface Legacy System

MIS

ERP

OS(Window 2000 Advanced Server, Solaris, HP – UX)

S/W Configuration

Ⅳ. Configuration

e-Procurement System S/W Configuration

Provider Management e-Bidding e-Contract e-Tax Invoice MRO

Network Configuration

Ⅳ. Configuration

e-Procurement System Network Configuration

Provider (B)

Outside

DMZ

Inside

Provider (A)

A person in charge

e-Procurement System Server

ERP

Certification Authority Institution

Internet

DMZ

Management of e-Procurement systemLink of e-Procurement system information

1. Issue Certificate 2. Validation Information 3. Certification Key

Information of Bid / Successful bidManagement of documentInformation of PurchaseTax - Invoice

Tax – Invoice / Bill

Publish / Receipt

Ⅴ. Major Functions

Government

Inquiry provider Information

Request provider Information

Approve a provider Info.

Approve of certificate

Bidding plan

Announcement

Opening of the estimate

Selection of Provider

In progress documents

Completed document

Make a contract

In progressdocuments

Completed document

User/Authority Management

Certificate Management

Notice

Q & A

FAQ

Reference room

Provider Mgt. e-Bidding e-Contract e-Tax Invoice Management

Government’s side major functions

Provider

Own Information

Request a modification

Submit of certificate

Inquiry the Bid Announcement

Submit of estimate

Inquiry the result of bid

In progress documents

Completed document

Make a contract

In progress documents

Completed document

Notice

Q & A

FAQ

Reference room

Provider Info. e-Bidding e-Contract e-Tax Invoice Management

Provider’s side major functions

Ⅴ. Major Functions

Function Detail Description

e-Bidding

• Make bidding plan‒ Bidding document‒ Bidding method decision‒ Winner selection method decision

• Manage bidding progress‒ Inquire tender progress list‒ Inquire detailed tender progress‒ Evaluation according to winner selection method‒ Tender opening , Winner selection / Re-bidding / Nullity

• Manage bidding result‒ Inquire list of bidding result

** Customization work for interworking with legacy system for bidding method : Ordinary / Selective / Reverse bidding for winner selection method : Minimum / Limited minimum / Total assessment /

Private contract / Estimate method

Detail function

Ⅴ. Major Functions

(* Subject to change depends on user’s requirement)

Function Detail Description

e-Contract

• Manage contract form‒ Contract form Registration / Modification / Deletion

• Make standard contract

• Manage contract progress / completion / statistic

** Customization work for interworking with legacy system for standard contract HTML + 2D Barcode & Copy detector for ordinary contract and for standard contract template generation work etc.

e-Tax Invoice

• Manage buying tax invoice‒ Making / Modification / Deletion for reverse issuing invoice‒ Making / Modification / Deletion for issuing invoice

• Manage selling tax invoice‒ Making / Modification / Deletion for issuing invoice

** Customization work for interworking with legacy system for summation list print & file download etc.

Detail function

Ⅴ. Major Functions

(* Subject to change depends on user’s requirement)

Ⅵ. Investment Cost Analysis

Subsystem Items Description Costs Remarks

e-Procurementsubsystem

S/W Package / Customization

• e-Procurement Package / DB, WAS, Web server• legacy system interworking & customization

Including customizationcosts

H/W, N/W• DB server, Application server,

Interface server, Web server, PC• SAN switch, Storage, Router, Fire Wall, L4Switch

Maintenance • Shall be determined after discussion

Training Consulting

• Installation, On-site Training

Sub total

Certificationsubsystem

S/W Package • PKI Package / DB, WAS, Web server

H/W, N/W• DB server, Application server,

Interface server, Web server, PC• SAN switch, Storage, Router, Fire Wall, L4Switch

Maintenance • Shall be determined after discussion

Training & Consulting

• Installation, On-site Training & Consulting

Sub total

Total

Estimated initial investment UNIT : USD

(* Subject to change depends on user’s requirement)

Ⅶ. ConclusionAfter implementing and deploying of e-Procurement system, government administration will be capable of improving the E-Gov. readiness, transparency & fairness, efficiency, effectiveness, cost reduction and accountability of government.

• Procurement system with e-signature & e-document

• MRO market place & portal role

• Partial interworking with major authorities

• Procurement system withupgraded e-signature &e-document

• Advanced procurement system for most of products, services & construction etc.

• Complete interworking with all authorities

After deploying e-Procurement system

In the future

Appendix 1. System Components

Subsystem Items Description

e-Procurementsubsystem

S/W Package • e-Procurement Package /• DB, WAS, Web server

H/W, N/W

• DB server, Application server,Interface server, Web server, PC

• SAN switch, Storage• Router, Fire Wall, L4Switch

Certificationsubsystem

S/W Package • PKI Package / DB, WAS, Web server

H/W, N/W

• DB server, Application server,Interface server, Web server, PC

• SAN switch, Storage• Router, Fire Wall, L4Switch

(* Subject to change depends on user’s requirement)

Appendix 2. Related Laws (In Republic of Korea)

e-Signature Law

e-Signature Law

Article 2 [Definition] The definition of the term in this law as follows. ① e-document is the in the form of electronic information which is stored, transmitted or

received by data processing system. ② e-signature is the in the form of electronic information to verify signer and to show that the

signer is signing relevant e-document which is attached or logically combined.

Article 3 [e-signature’s force]② According to the Article 1, in the case of having e-signature, relevant e-signature is one’s

sign or one’s sign with name of the e-document then it is considered that the e-document is not changed after that is signed.

Article 5 [e-document’s force]e-document’s force as a document is not denied in any other law, except there is special rule, with the reason which is written in the form of the electronic type.

Article 6 [e-signature’s force]② According to the Article 16, e-signature certified by security authority can be shown as one’s

sign or one’s sign with name except another law has the Article which is denied the effect.

e-Trading Basic Law

e-Trading Basic Law

Article 8 [Electronic document storage]

In case the electronic document follows each rules below, it shall have the same effect with storing that electronic document for the Article 8 (Electronic document storage).

• To read the content of the electronic document• To be saved or be re-produced with the form of when the electronic document is written or

transmitted / received• To save the writer, the receiver and the time of transmitting & receiving, in case those kinds of

information are included

Appendix 2. Related Laws (In Republic of Korea)

Acronym• ADO : Active Data Object

• ASP : Active Server Page

• DCOM : Distributed Common Object Model

• DMZ : De-Militarized Zone

• e-Document : Electronic Document

• e-Government : Electronic Government

• e-Procurement : Electronic Procurement

• e-Signature : Electronic Signature

• ERP : Enterprise Resource Planning

• HTML : Hyper Text Markup Language

• IIS : Internet Information Service

• JSP : JAVA Server Page

• MIS : Management Information System

• MRO : Maintenance Repair Operation

• MTS : Microsoft Transaction Server

• NEDP : National Economic Development Plan

• PKI : Public Key Infrastructure

• XML : eXtensible Markup Language

Appendix 3. Acronym