2. Paul R Schapper May 2009

3. INTRODUCTION E-GP as a key component of Procurement Reform

4. Good Governance in Public Procurement TransparencyAccountability Open Competition Value for money Organisation of Economic Coop and Development, OECD, APEC Asia-Pacific Economic Cooperation

5. Regulatory Control Good Governance - RESULT - Complex Regulations - RESULT - Complex Regulations - ISSUE - Vulnerability to Corruption - ISSUE - Vulnerability to Corruption - RESPONSE - Minimise Discretion - RESPONSE - Minimise Discretion OUTCOME - Reduced transparency OUTCOME - Reduced transparency

6. E-GP Reform E-GP Reform Standardised Procedures & Documents Standardised Procedures & Documents Automation of basic processes Automation of basic processes Activity Tracking and Monitoring Activity Tracking and Monitoring Information Processing & Reporting Technology gives Transparency + Control Control Control + Transparency Control + Transparency Without technology transparency in procurement is problematic

7. ECONOMIC DEVELOPMENT Business development Competitiveness Technological Enablement Market Access ECONOMIC DEVELOPMENT Business development Competitiveness Technological Enablement Market Access Countries Begin with Different Goals GOVERNANCE Transparency Accountability Integrity Public Confidence GOVERNANCE Transparency Accountability Integrity Public Confidence EFFECTIVENESS Efficiency Informed Management Value-for-money Quality Outcomes EFFECTIVENESS Efficiency Informed Management Value-for-money Quality Outcomes E-GP

8. DEFINITION Common understanding of e-GP in general and in particular e-GP: just another IT system? How can electronic means be used to support public procurement systems including principles, objectives, legislation, and procedures? What are the basic differences between e- Tendering and e-Purchasing? e-GP and IFMIS

9. What is e-GP? E-GP is the application of technology to public procurement An e-GP implementation strategy is a management and reform programme E-GP is not a software programme but includes software E-GP is not centralisation of procurement but requires centrally determined standards and procedures It applies to the acquisition of works, goods and services. Objectives include to improve governance and efficiency E-GP is the application of technology to public procurement An e-GP implementation strategy is a management and reform programme E-GP is not a software programme but includes software E-GP is not centralisation of procurement but requires centrally determined standards and procedures It applies to the acquisition of works, goods and services. Objectives include to improve governance and efficiency E-GP reduces the need for detailed and complex regulation to prescribe all the procurement processes and allows greater focus on objectives and outcomes. Ir is the capacity to change the quality of governance that makes e-GP so significant and changes the regulatory needs

10. OPPORTUNITIES e-GP as a tool to strengthen public procurement How can electronic means be used to improve transparency and efficiency of public procurement? How can e-GP contribute to reducing the opportunities of fraud and corruption in a public procurement system? How can e-GP be used to enhance public procurement management? What are the low-hanging fruits?

11. Basic Systems E-Tendering E-Purchasing Information & reporting system Management system also E-RA Online Contract Management E-Management – Works & Supply Chain Very different systems

12. Online Tender Service - LHF Transparent and open Transparent and open Audit trails, access logs Audit trails, access logs Promotes competition Promotes competition Downloads tender documents and drawings Downloads tender documents and drawings Uploads documents and drawings Uploads documents and drawings Request a hardcopy Request a hardcopy Search facilities Search facilities Early tender advice Early tender advice Electronic lodgment Electronic lodgment Tenders Seek facility Tenders Seek facility Pending Award, tracking Pending Award, tracking Awarded contract information Awarded contract information Archived contracts Archived contracts Industry e-activation Industry e-activation STATISTICS Cost to develop$US500,000 Time to develop v23-9 months Firms registered25,000 Tenders100 / day Staff required4 Electronic downloads70% ETL50% Access rate2000 / day User charges$0.0

13. Value Added Services Contract E-Management Low Value, High Volume Procurement(E-PURCHASING) High Value, Low Volume Procurement(E-TENDERS) Governments Business Contract Development Web Based Contract Management Government Electronic Market Registries Catalogues Electronic Tender Lodgement Email Alerts Queries & Advice Tender Advertising Policies & Legislation Departments Department A Department B Department C Department D Department E Department F Department G e-Procurement Strategy Standardised Portal e-Procurement Strategy Standardised Portal Businesses Business A Business B Business C Business D Business E Business F Business G

14. CHALLENGES Key success factors of e- GP implementation Risks of e-GP Suggested roadmap

15. Why are Standards Important? Mars Polar Lander Why are Standards Important? Mars Polar Lander Example: Five clients – five systems

16. Buyers Suppliers Alliance Contracts Spot Markets + Panel Contracts Spot Markets + Panel Contracts Reverse Auctions Framework Contracts Framework Contracts Can Technology Complicate Public Procurement? Technology can liberate procurement from complex rules and processes and allow a focus on better outcomes

17. Governance standards Regulatory conformance Process Performance International Trends in Public Procurement Warehouse supplies & logistics Reverse Auctions Framework Contracts Decentralisation e-Procurement and Procurement Methods

18. Success Indicators Fail Indicators Weak strategy Multiple sites Devolved strategy Technology driven IT Project Closed standards / closed access Vendor driven Weak strategy Multiple sites Devolved strategy Technology driven IT Project Closed standards / closed access Vendor driven A sound Strategy Central site Leadership strategy Objectives driven Procurement Project International standards / open access Needs driven A sound Strategy Central site Leadership strategy Objectives driven Procurement Project International standards / open access Needs driven IndicatorsIndicators Who is in charge of managing the e-GP agenda?

19. The Lessons Learnt Vision and leadership - national Vision and leadership - national Small Business friendly Small Business friendly Management not technology Management not technology Get right expertise Get right expertise Needs vs vendor driven Needs vs vendor driven International standards based International standards based Architecture Architecture Small steps not big bang Small steps not big bang Education and training are essential Education and training are essential Vision and leadership - national Vision and leadership - national Small Business friendly Small Business friendly Management not technology Management not technology Get right expertise Get right expertise Needs vs vendor driven Needs vs vendor driven International standards based International standards based Architecture Architecture Small steps not big bang Small steps not big bang Education and training are essential Education and training are essential. How to activate buyers and suppliers and ensure connectivity? Applying technology to automate some existing processes is a waste of time and money How should the use of electronic means be addressed in the procurement policy and legislation?

20. Which Path? Where, when, and what to start with? Which Path? Where, when, and what to start with? How to start? Where to start? How to start? Where to start? Lead Agency? Lead Agency? E-Tendering? E-Tendering? E-Reverse Auctions? E-Reverse Auctions? E-Contract Management? E-Contract Management? E-Purchasing? E-Purchasing? Phased or Big Bang? Phased or Big Bang? Timeframes? Timeframes? Costs? Costs? Security? Security? Policy Sovereignty? Policy Sovereignty? FMIS? FMIS? Evaluation? Pre-qualification? Evaluation? Pre-qualification? BOO? BOOT? SLA? BOO? BOOT? SLA? Legislation Legislation How to start? Where to start? How to start? Where to start? Lead Agency? Lead Agency? E-Tendering? E-Tendering? E-Reverse Auctions? E-Reverse Auctions? E-Contract Management? E-Contract Management? E-Purchasing? E-Purchasing? Phased or Big Bang? Phased or Big Bang? Timeframes? Timeframes? Costs? Costs? Security? Security? Policy Sovereignty? Policy Sovereignty? FMIS? FMIS? Evaluation? Pre-qualification? Evaluation? Pre-qualification? BOO? BOOT? SLA? BOO? BOOT? SLA? Legislation Legislation

21. Selection Contract Management Bidding Processes Development Preparation Tendering Purchasing Execution. E-Procurement & Automation China Canada Japan Argentina Brazil Armenia Hungary Indonesia Australia Bangladesh

22. PMIS Workflow Management Data field Requirements Electronic Document Construction Contract Management Account Transaction Register Buyer Details & Authority Register Buying Rules Contract Development Register Buyer Activity Profiles & Contract Management Registers Best Practice Guidelines Checklists Templates Case Studies Complaints Register Product/ Services Catalogue Management Reporting E-Payments External StakeholdersPortal Services Requests for Tender EOI requests Procurement Plans Publications including legislation Information Services Document Downloads Document Uploads Private sector Suppliers Banking services Payment gateway Related agencies LKPP Finance Audit Supplier Register Pre-Qualified Lists Supplier Activity Register Online Tender Box Audit NGOs Civil Society Banking Institutions E-Purchasing Framework Contracts

23. IMPACT EVALUATION Performance indicators

24. Performance Qualitative and Quantitative Integrated with BP Integrated with BP User friendly User friendly Cost recovery Cost recovery Transparent Transparent Take-up Take-up Satisfaction – buyers Satisfaction – buyers Satisfaction – suppliers Satisfaction – suppliers KPIs…… KPIs…… Integrated with BP Integrated with BP User friendly User friendly Cost recovery Cost recovery Transparent Transparent Take-up Take-up Satisfaction – buyers Satisfaction – buyers Satisfaction – suppliers Satisfaction – suppliers KPIs…… KPIs……

25. ParameterKey Performance Indicator System adoptionProcurements carried out electronically as a percentage of total procurement Tenders floated electronically as a percentage of total number of Tenders Percentage increase in Supplier base Supplier and Buyer satisfaction indices Bid PublicationPercentage of contracts for Invitation for Tender published electronically Percentage of notices publicized electronically Percentage of documents distributed electronically Percentage of invitations to tender that are re-tendered Percentage of invitations to tender where the closing time or date has been extended. Percentage of invitations to tender amended during tender period. Percentage of invitations to tender that were preceded by a pre-bid notice or procurement plan Percentage of invitations to tender that included a procurement plan. Percentage of tender competitions accurately disclosed with process electronically stored (number & value) Percentage of invitations to tender that are declared void per year Percentage of contract award results published online (number & value) Number of complaints and clarifications Bid submissionPercentage of contracts having sufficient bid submission time from time of publication including amendments as per regulation. Average number of bidders requesting bidding documents. Average number of bidders submitting bid. Ratio of number of bid submissions and number of bidding documents distributed. Average number of days between closing tenders and completion of evaluation. Percentage of contracts that required extension of bid validity Percentage of bids that were non-conforming Percentage of bid openings where names of attendees, names of bidders and offer prices properly recorded Percentage of contracts where evaluation committee formed. Tender Evaluation Report Approval Average number of days taken between submission of Bid Evaluation Report and approval of contract. Percentage of contracts for which original published contract terms were re-negotiated Average number of contracts approved under the correct financial delegation as per regulation Contract Award Average number of days between final approval and contract award. Average number of days between evaluation committee recommendation and contract award Percentage of contract awards published on e-GP Portal including final contract value Percentage (%) of contracts awarded within initial bid validity period. Percentage of contacts awarded to non-conforming bids Percentage of contracts not awarded to least-cost solution Delivery within original schedule Percentage of contracts completed within procurement plan deadline. Percentage of contracts with liquidated damaged imposed. Payment Average number of days taken for release payment. Percentage of contracts where payment was not made as per contract. Percentage of contracts where interest for delayed payment was made. Procurement Activity Tracking Number of Procurement Management Information Reports published. Number of annual Procurement plans submitted. Percentage of complaints handled satisfactorily as per PPR guidelines. EfficiencyAverage number of bidders compared with baseline Average percentage in transaction cost reductions Users System Performance Contract Management Sample KPIs

26. Paul R Schapper May 2009