Strengthening Public Finance Management Through Computerization of Procurement Management System

1. Strengthening Public Finance Management Through Computerization of Procurement Management System High Level Forum on Procurement Reforms in Africa Tunisia - November 2009 Egypt – General Authority for Government Services (GAGS)

2. Contents • What is e-Government about? • Procurement and Public Financial Management • e- Government Goals • Egypt e-Procurement Experience • Implementation – Phase I & II • e-Procurement Recipe for Success • e-Procurement Challenges

3. What is e-Government about? “It is about automation or computerization of existing paper-based procedures or reengineered one, with the aim of enhancing access to and delivery of government services for the benefit of citizens. It also aims to strengthen government’s drive toward effective governance and increased transparency to better manage a country’s social and economic resources for development”

4. Procurement and Public Financial Management • Procurement expenditures represents a significant component of public expenditure (10-15% of GDP ) and significantly higher in developing countries • The basic objectives are to obtain goods and services needed to deliver government programs at the appropriate quantity, quality and price (value for money) • Procurement is therefore a financial management issue not just adhering to legal requirements or obtaining goods and services that meet technical requirements. • Inappropriate procurement will reduce both strategic resource allocation and operational efficiency

5. e-Government Goals • Increase productivity and economic growth • Contribute to effective delivery of goods and services to citizens • Promote transparency and accountability • Streamline government operations, reduce its operation cost, and increase staff productivity

6. Egypt e-Procurement Experience • In 2007, Egypt launched its e-Tender Portal (Phase I) http://etenders.gov.eg • It is a web-based portal solution that allow electronic communication between different stakeholders: • Governmental Entities • Suppliers • Procurement personnel and evaluation committee members within government organizations • Decision makers and senior management within government organizations

7. Implementation – Phase I • The solution is composed of 3 sub-systems: Sub System (1) E-Tendering • Creating and up-loading solicitation documents (RFPs) • Publishing RFPs on the portal & sending notification messages to registered suppliers • Online question and answer forum with automatic distribution to all registered suppliers • A draft Prime Minister’s decree demanding all governmental entities that are governed by law 89 organizing GP to publish their solicitations on the portal as of Jan.1st, 2010 is under review (in addition to publishing in the official newspapers and gov. entities’ own websites)

8. Implementation Phase II Sub - System (2) Central Collective (pooled) Procurement • Each government organization to send its procurement needs of commonly used items to its Line Ministry or Governorate (Pilot Project - manual) • Central office within each Ministry or Governorate aggregates the requisitions and issues one pooled transaction (Pilot Project - manual) Sub - System(3) e-Bidding and e-Evaluation • Electronic tender box for online submissions of offers • Online publishing of evaluation results and decisions • Online contract award announcement

9. e-Procurement Recipe for Success • There are no “one size fits all” type solutions • Re-engineer the system before automating it • Design “or carefully customize” a solution rater than buying one that worked well in another country • Utilize solution designers and engineers who are intimate with the system and the operational culture to avoid large design-reality gaps • Establish well defined solution objectives and values • Identify system success factors before designing it • Break implementation into phases, sub-systems, and modules and allow sufficient implementation time • On going maintenance of the developed system

10. Implementation approach! • e-Procurement can be done in phases and in accordance with the country reform strategy • Re-invest in available infrastructure and assets to reduce startup capital • Define the needed functions and targeted objectives (start with small and simple ones) • Revenue or funding generating model must be in place from the beginning to sustain the project

11. e-Procurement Challenges • Very costly to acquire and operate • Lack of computer Literacy among business community as well as government resources • Majority, if not all, e-procurement applications are in English language which represent an additional barrier • Lack of skilled resources to operate modern procurement system in both private and public sectors

12. Conclusions e-Government is a good tool and could help government to achieve its objectives if properly designed & operated e-Procurement is a viable project and could be done if appropriate resources are available e-Government and e-Procurement are driven by changes and reform occurring across areas of personnel and executive behavior, regulations, legislation, operational policies, and business behavior. Few, if any, of these changes will occur through acquisition of some hardware and software.