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

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. Thank You! Questions and comments?
Sören Lennartsson ,