Workshop on Implementing e-GP Workshop on Implementing Electronic Government Procurement (e-GP) Delhi, India – May 18, 2006 The Role of e-GP in Improving Public Procurement Performance Knut Leipold The World Bank May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Voice of the Pros “E-Procurement can protect life!” “You loose some USD 450,000 every day!” “It allows for increased competition and less fraud.” May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Voice of the Cons “Look at this! Not only that we have to use this E-Procurement system, we even have to pay USD 12,000 for it this year!” “We prefer the offline procurement process.” “We don’t like the e-Procurement system as it increases our workload.” May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Objectives Opportunities & Challenges of e for GP e is a tool to improve GP Encourage to use e for GP May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Agenda Opportunities Challenges Lessons Learned May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Agenda Opportunities Challenges Lessons Learned May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Benefits of e-GP Transparency Efficiency Economic Development May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Transparency Information on public procurement function Information on procurement transactions Compliance Reduced corruption Audit trails & institutional memory Improved quality of public procurement reporting, monitoring, and management May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Efficiency Price decrease Increased price transparency Increased competition (!) Aggregated demand Lower transaction costs for suppliers e-Reverse Auctions Reduced transaction costs staff, material, workflow online vs. offline publication Time is money! May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Economic Development Public Procurement Government = single largest purchaser in a national economy Value of public procurement: 10-15% of GDP Redistribution of taxpayers’ money GDP Private business activation Infrastructure development Capacity building May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Beneficiaries of e-GP Transparency Efficiency Economic Development Government Suppliers Taxpayers May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP What is the Problem? Objectives of GP: Open & fair competition Efficiency Transparency Improved quality Benefits of e-GP: Open & fair competition Efficiency Transparency Improved quality E-GP does not replace GP. It is a tool that can improve and reform GP. The challenge is successful e-GP implementation, as it addresses far more than just HW & SW. May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Agenda Opportunities Challenges Lessons Learned May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP e-GP Implementation Under- standing Manage- ment Policy e-GP Buyer & Supplier Activation Policy Legis- lation Under- standing Infra- structure Manage- ment Techno- logy Standards Government Leadership Legis- lation Techno- logy Buyer & Supplier Activation Standards Infra- structure May 18, 2006 Workshop on Implementing e-GP

Successful e-GP Adoption Buyer & Supplier Activation Policy Legis- lation Under- standing Infra- structure Manage- ment Techno- logy Standards Government Leadership Think Big, Start Small Learn from Others Assess the Current Situation Develop a Strategy Implement the Strategy May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Agenda Opportunities Challenges Lessons Learned May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Lessons Learned: Dos (I) Have a vision and strategy Get a Champion on high political level Get stakeholder buy-in Develop appropriate legal framework Establish a Lead Agency Run an awareness raising campaign Build capacity May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Lessons Learned: Dos (II) Review procurement regulation and processes Follow international standards Phased implementation Select a sustainable business model Integration (link with other systems) Strengthen international dialogue May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Lessons Learned: Don’ts There is no reason to wait! E-GP is far more than technology! Don’t mix digital with electronic signature! Don’t forget the private sector! Don’t set unnecessary barriers to the use of e-GP! E-GP does not solve all public procurement issues! Decentralized public procurement does not require decentralized e-GP systems May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP For More Information www.mdb-egp.org May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Thank You! Kleipold@worldbank.org May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Back-up slides May 18, 2006 Workshop on Implementing e-GP

Workshop on Implementing e-GP Time Savings Activity Paper-based Web-based 500 A4 pages mailed to 9 suppliers 4.500 pages 1.4 Mb disk space Preparation of tender 12 hours 0.5 hour Data capturing – 10 fields per record at avg. 5 characters per field at 0.5 second per character for 2.000 items and 9 suppliers 125 hours 1 hour Evaluation and what-if scenarios on 18.000 records 40 hours Contract preparation and other documents 8 hours Total 185 hours 3 hours Source: Intenda Ltd., Pretoria, South Africa, 2003 May 18, 2006 Workshop on Implementing e-GP

Fighting Corruption with e-GP (I) Reducing fraud and corruption in public procurement: online disclosure of procurement notices online disclosure of awarded contracts open and fair competition increased compliance with procurement policy less opportunity for corruptive, collusive, fraudulent, and coercive practices Potential for fraud and corruption: inappropriate application of technology e-Corruption May 18, 2006 Workshop on Implementing e-GP

Fighting Corruption with e-GP (II) E-Procurement can reduce opportunity of fraud and corruption in the context of government procurement if driven by political will implemented appropriately. High level of transparency can be achieved at low costs and no need of major changes of the existing legal framework. May 18, 2006 Workshop on Implementing e-GP