Introducing Electronic Procurement Processes Sören Lennartsson Public Procurement Seminar Valletta, 26 January 2006

New Procurement Directives Recognition of eProcurement (implementation mandatory) “Electronic means”, “in writing”, etc Rules for communication, tools, devices Provisions for new electronic purchasing techniques (implementation optional) Dynamic purchasing system (not a procedure!) Electronic auction (a process, not a procedure!) General provisions that may support eProcurement (implementation optional) Framework agreement Central purchasing body

New Procurement Directives eProcurement – to be used at the discretion of the contracting entities The general principles of equal treatment, non-discrimination and transparency apply Specifically, tools for eProcurement shall Be generally available Be interoperable with products in general use Conform to security and access requirements Electronic auctions can be used as basis for award of contracts eCatalogues may be used although mentioned only in the preamble

Dynamic Purchasing System Summarised description: A new, completely electronic system In the framework of open procedure only Open throughout its validity to any admissible tenderer For commonly made purchases the characteristics of which are generally available in the market Limited in duration (max 4 years) With the purpose to create an open pool of potential tenderers and to increase competition through the use of electronic facilities

Dynamic Purchasing System Includes 2 steps: - Step 1 Publication of a contract notice to announce the system Submission of indicative tenders, which may be improved at any time - Step 2 Publication of a simplified notice (invitation) After at least 15 days, final invitation to submit a tender addressed to all economic operators admitted to the system

Electronic Auction Summarised description: A new process allowing for repetitive bidding Within the framework of the existing procedures Applicable when contract specifications may be established with precision Using e-devices for the submission of certain elements of the tenders (new prices / quantifiable values) Automatic electronic evaluation (through a mathematical formula) for the ranking of tenderers

Electronic Auction Takes place in two steps: - Step1: Publication of a contract notice to announce the intention to hold an auction use of an existing awarding procedure for the qualitative selection of participants full initial evaluation of tenders - Step 2: Simultaneous invitation to the e-auction for the tenderers who have submitted admissible tenders After at least 2 work days, e-auction takes place. A number of successive auctions phases possible Award of the contract on the basis of the result of the auction

Outline of Procurement Steps Follow up statistics Execute contract Award and dissem. Evalu- ation RFQ & Tenders Announce Specify Identify needs Notice Prior notice Invitation to tender Contract Notifications Delivery instruction Payment Request to participate Tender Invoice Despatch advice The traditional way of working may continue but with electronic messages replacing paper documents Some paper documents are easier to substitute Security focus on tenders, requests to participate The time-limits may be shortened

Notices and Tendering Necessary transaction volumes and incentives for standardisation of formats can be reached through Central purchasing bodies Marketplace solutions Some characteristics of current solutions Procurement process support/workflow (for the buyer) Organisation of tender document package Largely textual/non-structured documents Services exist, for example publication of notices (OJS eSender or manual form) tender collection, including opening provisions Support for evaluation (even complex award criteria) Limited support to suppliers

Tendering Process Measures to consider Define standard contract clauses Standardise terminology Standardise information / document structure elaborate on templates for calls elaborate on templates for tender Standard forms

Goods receipt and control Repetitive Processes Includes Framework agreements Dynamic purchasing systems Frequent cycle Reporting Accou- nting Payment Invoice Goods receipt and control Confirm/ amend order Place order Catalogue updates Follow up statistics Execute contract Award and dissem. Evalu- ation RFQ & Tenders Announce Specify Identify needs Infrequent cycle

Repetitive Processes Example: Framework agreement (FW), decentralised buying Number of persons involved Number of instances Planning 5 1 Framework agreement FW/price update 2 10 Contracts based on FW 100 1000 Invoices

Repetitive Processes Some characteristics of current solutions High transaction frequency Only small variations in message format Structured, standardised documents Integration of buyer’s and seller’s systems Automated process steps Built-in transaction validation/control Built-in authorisation/attestation mechanisms Verification against framework agreement rules Automatic attestation for payment possible

E-Catalogues Does a price list/catalogue exist? Is it stable? Is it manageable? The place of the price list/catalogue At the buyer’s, seller’s or third party’s site? Shopping portal vs. ”own” system Need for customised information? How to control price list amendments? How to normalise presentation? Classification CPV is not enough Product classification and attribute codes needed

IDA e-Procurement Based on the new legislative framework To support the development of interoperable solutions Developed functional requirements and guidelines for the technical implementation of electronic public procurement systems Created learning demonstrators, simulating the public eProcurement functionality It is hoped that IDABC eProcurement will continue the work. A cross-border project is proposed based on the UBL standard

To Consider E- procurement requires a multi-disciplinary procurement units An e-procurement study can be an important first measure Consider how to involve all future users in the development process, in particular local authorities What is the maturity level of IT Among buyers Among suppliers Suppliers of supporting IT services Potential effects of framework agreement, dynamic purchasing systems, e‑auctions, central purchasing

Some Recommendations Develop a national action plan Plan for coexistence of traditional and electronic procurement Plan for a step by step build-up and expansion of eProcurement Include guiding and quality assuring tools from start Begin with procurement areas that are easy to deal with electronically Prepare good deployment strategies to engage the users of the system Follow closely the European level developments on e-procurement, e.g. IDABC

Thank You! Questions and comments? Sören Lennartsson +46 31 232239, +46 733 307897 soren@ooidata.se