11 th International Anti-Corruption Conference

1. 11th International Anti-Corruption Conference Enhancing Transparency through Government e-Procurement System (GePS) Jae Hyun Yum

2. Table of contents 1. What is Korean Government Procurement like? 2. Why and how has GePS been developed? 3. What are the characteristics of GePS? 4. Major contents of GePS 5. How do we enhance transparency through GePS? 6. Closing remark

3. 1. What is Korean Government Procurement like? (1) • Government procurement in Korea: Combination of centralized and decentralized procurement system - Centralized system • Procurement of central and local government organizations (construction projects worth more than $2.4 million, goods worth more than $50,000) • Mandatory use of central procurement agency (Public Procurement Service; PPS) - Decentralized system • Procurement of government corporations or non-profit organizations • Optional use of PPS

4. 1. What is Korean Government Procurement like? (2) • Volume of procurement: $56 billion • - Centralized: $17 billion (30%) • - Decentralized: $39 billion (70%) • Size of public procurement market in Korea (as of 2002) • Public Procurement Service (PPS) • Central Procurement Agency - supply goods and services for government use - contract and manage public works - stockpile raw materials • Operating organization of Government e-Procurement System (GePS)

5. 2. Why and how has GePS been developed? (1) • General characteristics of traditional government procurement • Paper oriented procedures - generate massive paperwork • Labor intensive works - demand various stages of process • Complicated processes - cost accounting, bid evaluation etc. • PPS’s opportunity to initiate digitalized procurement system • Inefficiency • Low transparency • Low service quality

6. 2. Why and how has GePS been developed?(2) • PPS introduced - ‘Procurement EDI’ in 1997 - ‘e-Shopping Mall’ in 1997 - ‘Electronic Tendering Service’ in 2000 - ‘Electronic payment’ in 2001 to lead e-government. • Established an government-wide e-procurement system (GePS) in September 2002. - Every public organization can use GePS.

7. 3. What are the characteristics of GePS? • A single window for comprehensive procuring information of all public organizations, providing one-click online service for government procurement • A device for dramatically enhancing transparency and fairness in the government procurement administration • Expanding the expertise and efficiency of PPS to all other public organizations

8. 4. Major contents of GePS (1) • Conceptual structure of GePS Public organizations Suppliers GePS • Portal site • E-procurement system (ASP) PPS External link systems Guarantee Agencies Authentication Agencies Associations Banks

9. 4. Major contents of GePS (2) • Providing integrated tender information of all public organizations - Tendering information of 24,000 public organizations • Legally required to announce the bid on GePS • 93% of bids are processed online ex) Tender information • End-users, size of projects, estimated costs, technical specifications, and award criteria • One-time registration for all the suppliers - Once registered in GePS, a company can participate in all kinds of tendering of public organizations - Number of registered suppliers: 77,000 companies

10. 4. Major contents of GePS (3) • Covering the whole procurement process on the web - All process of procurement are digitalized: from purchasing request, bid announcement, bidding, contracts, inspection, to payment ex) E-shopping mall • Transactions of 26,000 products with $3.1 billion • Promoting customer convenience and reducing costs by sharing information with 51 external systems - 10 guarantee agencies, 15 banks, 7 associations, 6 certificate agencies, and 15 other public systems

11. 5. How do we enhance transparency through GePS? (1) • Opening procurement information in real-time - From the initial stage of purchase request, information of specifications is disclosed to avoid preference to certain suppliers • Receiving feedback through Online Customer Service Center - Showing contract method, award criteria, and results of award • Increasing impartiality and competition by expanding bid opportunities - Prevention of wrongdoings including collusion and bids interruption • Recent number of bidders increased 3 times comparing to the early days of GePS

12. 5. How do we enhance transparency through GePS? (2) • Preventing potential corruption through online procurement procedures - Electronic exchange of documents reduces unnecessary meeting between a contracting officer and contractors when submitting guarantee documents, making contracts and receiving payments • Non face-to-face business environment isolates wrong-doings of contracting officers - Reduced room for arbitrary decision of contracting officers through automated process

13. 5. How do we enhance transparency through GePS? (3) • Integrated management of debarred suppliers to prevent them from participating in tender - Enlisting and publicizing debarred suppliers’ information on GePS - Ensures responsibility and reliability of government procuring contracts • Establishing objective and transparent guidelines and procedures through analysis of accumulated contract data

14. 6. Closing remark • International evaluation(reputation) of GePS - U.N. decided to present 2003 Public Service Award (PSA) to PPS in June 2003 - PPS presented an e-Procurement establishment success at World Bank Conference in January 2003 • Future prospects • PPS will continue to establish standards of e-procurement procedures and best practices in public procurement market • contribute to creating an integrity procurement environment through maximizing its transparency

15. Questions?