October Government Your Fingertips: Strategic Framework of the World Bank Knut Leipold October 2003

October Table of Contents 1.e-GP Basics Definition Benefits Key Success Factors 2. e-GP Strategy of theWorld Bank World Bank Procurement Policy Strategic Framework

October e-Confusion

October e-GP is the use of information technology (especially the Internet) by governments in conducting their procurement relationships with suppliers for the acquisition of works, goods, and consultancy services required by the public sector. e-GP breaks down the physical barriers of space and time and allows a more transparent and efficient information flow and wider access to information and services. Shared e-GP Definition

October e-Tendering: A solution designed to electronically handle the process of public tender for the acquisition of specialized works, goods, and consulting services that are of high value and low volume. Introduction can be phased and provides wide exposure to e-GP at low incremental cost. e-Purchasing: A solution designed to electronically facilitate the acquisition of low value and high volume standard goods and services. Key components of the system tend to be complex and require substantial system development. e-Tendering vs. e-Purchasing

October Tracking Opening Upload Clarification Download Disclosure e-Tendering: e-Purchasing: Ordering & Payment Ordering & Payment Best quotation Reverse Auction Catalogue Pre-qualification Functional Requirements

October Transparency Reduced corruption Increased competition Lower transaction costs and prices Shorter procurement cycles Improved quality Benefits

October Benefits & Beneficiaries GovernmentSupplierPublic Transparency Anti-corruption Increased number of suppliers Better integration and inter- action between governments Professional procurement monitoring/management Higher quality of procurement decisions and statistics Political return from the public Increased fairness/competition Improved access to govt. market Open the government market to new suppliers Stimulation of SME participation Improved access to public procurement information Government accountability Access to public procurement infor- mation Monitor public expen- diture information Participation Government accounta- bility Costs Efficiency Lower prices/transaction costs Staff reduction Reduction in fiscal expenditure Lower transaction costs Staff reduction Improved cash flow Redistribution of fiscal expenditure Time Simplification/elimination of repetitive tasks Communication anywhere/time Shorter procurement cycle Simplification/elimination of repetitive tasks Communication anywhere/time Shorter procurement cycle Communication anywhere/time

October Benefits (Examples) By using the national education portal in Great Britain, some 500 schools achieve price reductions of up to 100 million British Pounds per year and time reduction of about 90% in order processing. Source: Public E-Procurement, Gehrmann/Schinzer, 2002 With the phased introduction of the Government electronic Procurement System (GePS), Korea is able to save some US$ 2.7 billion of all government procurement (US$ 17.1 billion) as compared to US$ 26 million investment. Between 1998 and 2002, staff of the Public Procurement Service PPS were reduced from 1,058 to 935, while the total government procurement volume increased by some 30% (from US$ billion to US$ 17.1 billion). Payments to suppliers are electronically transferred which usually takes no longer than 4 hours. Source: DRAFT Discussion Note, The World Bank, 2003 Romania uses a government-wide e-Procurement system bringing together about 1,000 public agencies and 8,000 suppliers. During the first 4 months of 2003, more than 60,000 transactions were completed. According to the Ministry of Communications and Information Technology, the savings through this e-GP platform amount to some 22% (US$ 35.5 million) of the volume of purchased goods and services (US$ million). Source: IDA, 2003 During the first three years of the procurement portal COMPRASNET, the Federal Government of Brazil spent about US$ 7million on system development and maintenance. During the first two years of on-line reverse auction use, the Federal Government is estimated to have saved up to US$ 1.5 million. While the normal procurement process takes more than two months, the on-line reverse auction may be completed in less than 15 working days. The use of on-line procurement has also increased the participation of small businesses in government supplies.COMPRASNET Source: http://

October Key Success Factors Policy & Legal Framework Policy & Legal Framework Technology Institutional Change Institutional Change Human Resources Human Resources Government Leadership Government Leadership Policy & Legal Framework Enabling environment e-GP strategy Roles & Responsibilities Flexibility Human Resources Awareness raising Capacity building Incentives User help desk Institutional Change Procurement process (BPR) Organizational structures Technology Infrastructure Compatibility & standards Scalability & security e-GP system ownership Government Leadership Taking the drivers seat Vision and goals Collective commitment for change Partnerships with private industry

October e-GP & World Bank Procurement Policy Compatibility of e-GP with WB procurement policy and goals: Modernization, simplification Economy & efficiency Equal access Encouragement of local industry Transparency

October E-TenderingE-Purchasing ICB NCB 2 Shopping 1 Direct Contracting 1 … Pre-qualification 2 … Reverse Auctioning 100% price evaluation e-GP and Procurement Methods

October Strategic e-GP Framework Policy & Guidelines Policy & Guidelines Country- based work Country- based work Procurement Operations & Monitoring Procurement Operations & Monitoring Awareness Raising Capacity Building Harmonization

October Strategic e-GP Framework Policy & Guidelines Policy & Guidelines Country- based work Country- based work Procurement Operations & Monitoring Procurement Operations & Monitoring Awareness Raising Capacity Building Harmonization Policy & Guidelines Simplification & modernization Revision of guidelines for procurement under IBRD Loans and IDA Credits and for selection of consultants Assessment of e-GP systems e-GP guideline Develop harmonized policies for the use of e-GP in MDB-financed procurement Revision of harmonized SBD for Goods

October Policy & Guidelines Policy & Guidelines Country- based work Country- based work Procurement Operations & Monitoring Procurement Operations & Monitoring Awareness Raising Capacity Building Harmonization Strategic e-GP Framework Country-based work Country-specific support Inclusion of e-GP in CPARs Training Knowledge exchange (e.g. VC, BBL) Project financing e-GP toolkit (e.g. readiness assessment, roadmap) Joint website with forum, database, tools 3 rd International e-GP Conference

October Policy & Guidelines Policy & Guidelines Country- based work Country- based work Procurement Operations & Monitoring Procurement Operations & Monitoring Awareness Raising Capacity Building Harmonization Strategic e-GP Framework Procurement Operations & Monitoring Client Connection Portal Project Portal Self-entry system for the publication of procurement notices Disclosure of awarded contracts e-Procurement system for hiring of consulting firms and individual consultants by the World Bank Procurement reporting systems Integration Interactive bidding documents