eProcurement

1
e-Procurement for Government
Assocham National Summit e-Governance for 10
Growth
Neel Ratan PricewaterhouseCoopers July 14 2006
2
Agenda

• Need
• e-Procurement for Growth
• Elements
• Expected Outcomes
• Issues
• Way Forward

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Need for e-Procurement

• Lack of a common public procurement policy
• Lack of standardization in implementing
  procurement practices processes
• Low efficiency manual process
• Lack of transparency in procurement leading to
  corruption pilferage of public monies
• Only two Indian states have an Act in place
• Malpractices by vendors
• Cartel formation
• Manipulate selection by bribing department staff
• Advances in electronic procurement through
  secured internet-enabled means have not being
  utilized in a widespread manner

4
e-Government Procurement
e-Government Procurement is the collaborative
procurement of goods, works and services by the
Public Sector using electronic methods at every
stage ensuring transparency and efficiency.
5
e-Procurement for Growth

• Excellent strategic cum operational tool to
  ensure large scale savings and thereby ensure
  growth
• e-Procurement savings are achieved through
• Transparency in the process
• Higher participation better competition
• Streamlined processes
• Demand aggregation
• Indian Government spends an estimated 100
  billion in public procurement each year
• A 10 cut in procurement costs would translate to
  Rs. 45,000 crore
• Savings could be routed for Infrastructure
  Development

Source World Bank
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Key Elements of e-Procurement

• Process Reengineering
• Works Procurement- e.g. Electronic measurement
  book, Inter department approval workflow
• Goods Procurement- Centralization and demand
  aggregation
• Business model
• PPP is preferred by Governments to avoid high
  capital investment
• Technical architecture
• Scalable, secure, and interoperable
• Centralized vs. Decentralized
• Infrastructure
• Data Center, networking, Security (PKI, etc.)
• Capacity Building
• Government Supplier Community

7
Expected Outcomes

• Enhanced transparency and control in procurement
  process
• Reduced cost of doing business for both
  government and suppliers
• Savings of up to 15-25 of procurement value
  realized by states
• Economies of scale through demand aggregation
• Streamlined integrated processes cutting across
  departments
• End-to-end automation of procurement (indent to
  delivery)
• Automatic bid evaluation
• Overall bid process time reduction
• Catalyst for procurement process reforms

8
Issues

• Concerns of security of data and online
  transactions
• Limited scope of current implementations- most
  implementations do not involve
• Demand aggregation across departments states
• Contract lifecycle monitoring
• Un-evolved Business Model
• Willingness of states to embrace e-Procurement
  to what extent
• Parallel manual processes even after
  e-Procurement
• Insufficient positive publicity supported by data
• National level repository of e-Procurement
  successes and savings
• Legislative/administrative changes to accept
  e-Procurement

9
Way Forward

• Integration of various Govt eProcurement
  exchanges
• Demand aggregation
• MIS generation for better spend analysis
• Better and wider supplier response
• Access to supplier performance information
• Standardized procurement policies
• Integrated platforms facilitating seamless flow
  of data across departments states
• Treasury, Finance Department
• Common Item Coding Systems
• Auto bid evaluation
• Digital certificates for Security

10

• Thank You