Government Procurement @ Your Fingertips: Strategic Framework of the World Bank

1. Government Procurement @ Your Fingertips:Strategic Framework of the World Bank Knut LeipoldOctober 2003 October 2003

2. Table of Contents • e-GP Basics • Definition • Benefits • Key Success Factors • e-GP Strategy of theWorld Bank • World Bank Procurement Policy • Strategic Framework October 2003

3. e-Confusion e-Marketplace e-Procurement e-Shopping e-Business e-Mall e-RFP e-Reverse Auctioning e-GP e-Commerce e-Bidding e-Purchasing B2G e-Tendering e-Auctioning e-RFQ October 2003

4. e-GP is the use of information technology (especially the Internet) by governments in conducting their procurement relationships with suppliers for the acquisition of works, goods, and consultancy services required by the public sector. e-GP breaks down the physical barriers of space and time and allows a more transparent and efficient information flow and wider access to information and services. Shared e-GP Definition October 2003

5. e-Tendering vs. e-Purchasing e-Tendering: A solution designed to electronically handle the process of public tender for the acquisition of specialized works, goods, and consulting services that are of high value and low volume. Introduction can be phased and provides wide exposure to e-GP at low incremental cost. e-Purchasing: A solution designed to electronically facilitate the acquisition of low value and high volume standard goods and services. Key components of the system tend to be complex and require substantial system development. October 2003

6. e-Tendering: Disclosure Download Clarification Upload Opening Tracking Functional Requirements e-Purchasing: Pre-qualification Best quotation Ordering & Payment Reverse Auction Catalogue October 2003

7. Transparency Reduced corruption Increased competition Lower transaction costs and prices Shorter procurement cycles Improved quality Benefits October 2003

8. Benefits & Beneficiaries October 2003

9. Benefits (Examples) • By using the national education portal www.feonline.net in Great Britain, some 500 schools achieve price reductions of up to 100 million British Pounds per year and time reduction of about 90% in order processing. • Source: Public E-Procurement, Gehrmann/Schinzer, 2002 • With the phased introduction of the Government electronic Procurement System (GePS), Korea is able to save some US$ 2.7 billion of all government procurement (US$ 17.1 billion) as compared to US$ 26 million investment. Between 1998 and 2002, staff of the Public Procurement Service PPS were reduced from 1,058 to 935, while the total government procurement volume increased by some 30% (from US$ 12..8 billion to US$ 17.1 billion). Payments to suppliers are electronically transferred which usually takes no longer than 4 hours. • Source: DRAFT Discussion Note, The World Bank, 2003 • Romania uses a government-wide e-Procurement system bringing together about 1,000 public agencies and 8,000 suppliers. During the first 4 months of 2003, more than 60,000 transactions were completed. According to the Ministry of Communications and Information Technology, the savings through this e-GP platform amount to some 22% (US$ 35.5 million) of the volume of purchased goods and services (US$ 161.4 million). Source: IDA, 2003 • During the first three years of the procurement portal COMPRASNET, the Federal Government of Brazil spent about US$ 7million on system development and maintenance. During the first two years of on-line reverse auction use, the Federal Government is estimated to have saved up to US$ 1.5 million. While the normal procurement process takes more than two months, the on-line reverse auction may be completed in less than 15 working days. The use of on-line procurement has also increased the participation of small businesses in government supplies. • Source:http://www.egov4dev.org/brazeproc.htm, 2002 October 2003

10. Policy & Legal Framework • Enabling environment • e-GP strategy • Roles & Responsibilities • Flexibility • Human Resources • Awareness raising • Capacity building • Incentives • User help desk • Government Leadership • Taking the driver’s seat • Vision and goals • Collective commitment for change • Partnerships with private industry • Technology • Infrastructure • Compatibility & standards • Scalability & security • e-GP system ownership • Institutional Change • Procurement process (BPR) • Organizational structures Key Success Factors Policy & Legal Framework Human Resources Government Leadership Technology Institutional Change October 2003

11. e-GP & World Bank Procurement Policy • Compatibility of e-GP with WB procurement policy and goals: • Modernization, simplification • Economy & efficiency • Equal access • Encouragement of local industry • Transparency      October 2003

12. e-GP and Procurement Methods 1 … Pre-qualification 2 … Reverse Auctioning 100% price evaluation October 2003

13. Strategic e-GP Framework Policy & Guidelines Country- based work Procurement Operations & Monitoring Awareness Raising Capacity Building Harmonization October 2003

14. Policy & Guidelines • Simplification & modernization • Revision of guidelines for procurement • under IBRD Loans and IDA Credits and • for selection of consultants • Assessment of e-GP systems • e-GP guideline • Develop harmonized policies for the • use of e-GP in MDB-financed • procurement • Revision of harmonized SBD for Goods Strategic e-GP Framework Policy & Guidelines Country- based work Procurement Operations & Monitoring Awareness Raising Capacity Building Harmonization October 2003

15. Country-based work • Country-specific support • Inclusion of e-GP in CPAR’s • Training • Knowledge exchange (e.g. VC, BBL) • Project financing • e-GP toolkit (e.g. readiness assessment, • roadmap) • Joint website with forum, database, tools • 3rd International e-GP Conference Strategic e-GP Framework Policy & Guidelines Country- based work Procurement Operations & Monitoring Awareness Raising Capacity Building Harmonization October 2003

16. Procurement Operations & Monitoring • Client Connection Portal • Project Portal • Self-entry system for the publication • of procurement notices • Disclosure of awarded contracts • e-Procurement system for hiring of • consulting firms and individual • consultants by the World Bank • Procurement reporting systems • Integration • Interactive bidding documents Strategic e-GP Framework Policy & Guidelines Country- based work Procurement Operations & Monitoring Awareness Raising Capacity Building Harmonization October 2003