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Ajay Sawhney, former Secretary IT&C & K.Bikshapathi, former Project M anager

Ajay Sawhney, former Secretary IT&C & K.Bikshapathi, former Project M anager. Agenda for Presentation. Public Procurement Implementation strategy & timeframe Public Private Partnership Benefits Critical Success Factors. Public Procurement – Quantum & Practices.

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Ajay Sawhney, former Secretary IT&C & K.Bikshapathi, former Project M anager

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  1. Ajay Sawhney, former Secretary IT&C & K.Bikshapathi, former Project Manager

  2. Agenda for Presentation • Public Procurement • Implementation strategy & timeframe • Public Private Partnership • Benefits • Critical Success Factors

  3. Public Procurement – Quantum & Practices • State’s annual procurement • US$ 2 billion to 3 billion • Category of procurements • Works & Turnkey Contracts : 80- 90% • Goods & Products : 10-15% • Services (consultancy, facility management, security services etc) : 5% • Procurement Practices • Centralised Procurement ( Corporate) • Distributed Procurement ( Delegation of powers)

  4. Implementation Approach • Political decision (2001) • IT&C Dept & High level Steering Committee • Training of Chief Information Officers (CIOs) • Appointment of consultants (2001) • RFP - business model & scope of eGP services (2002) • Selection of Service Provider • Pilot – Go Live in 4 Depts/Agencies (2003) • Evaluation of Pilot • Scaling up & rollout to other Depts/Agencies (2004)

  5. Strategic Alternatives • Platform Model • Centalized platform - decentralised procurement • Exchange Model • Join Existing Exchange • Build New Exchange • Services Model • Monolithic approach • Incremental approach • Business Model • Owned or PPP • Revenue Model • Fixed or Variable cost • Payable by Bidder or Buyer

  6. Public Private Partnership Model • No capital cost to the Government • State-of-the-art technology • High quality resources • Improvedrisk allocation – risk borne by the entity best able to handle that risk • Combining accountability with efficiency • Services governed by Service Level Agreements

  7. Role of Partner Service Provider • Implementation of the E-Procurement functionality across all departments • Customizing software • Setup and management of hardware and software for the Portal • Training • Helpdesk services • Operations & Maintenance

  8. Project Rollout StatusDepts/Organizations Added Each Year

  9. eProcurement Status (March 2008) • 20 Govt Departments • 26 Public sector Units • 104 Municipalities • 10 Universities • 500 Locations across the state • 2000 govt users • 11000 vendors • Turn over • 2003-04: US$ 400 Million (564 Nos) • 2004-05: US$ 3200 Million(2215 Nos) • 2005-06: US$ 3300 Million (9981Nos) • 2006-07: US$ 2300 Million (16046 Nos) • 2007-08: US$ 3400 Million (10054 Nos) 38860 transactions US$13 Billion

  10. Range of Procurement • Goods (all types), IT Infrastructure, Medicines, Services • Works contracts, EPC - Turnkey contracts • Highest value US $ 700m Irrigation project • Lowest US $ 1200 drain in a municipality • 65 bidders for a single tender • 550 tenders closed on a single day (Sept 2008)

  11. Benefits Demonstrated • Cost savings to the tune of US$ 650 m (5% of procurement costs) due to competitive bids • Improved efficiency (120 days to 32 days) • Transparency • Elimination of Contractor Cartels • Empowerment of Bidders • Remote submission of bids • Reduced bidding & incidental costs • No more dependence on departmental officials

  12. Cost Savings- AnalysisCase 1:COT Estimated/ Tender Contract Value Comparison between the two systems COT derived additional savings due to eProcurement

  13. Transparency • Automatic e-mail to Bidders on tender publication • Bid documents available online in public domain. • Corrigendum in public domain • No interface with departments upto tender opening • Support documents are open to competitive bidders soon after tender opening • Tender evaluation status automatically notified to bidders • Procurement status in Public domain • Effective tool for RTI Act

  14. Critical Success Factors • Support of top political leadership • CIOs from each domain as project leaders • High-level Project Implementation Committee • Timely policy intervention • Significant process re-engineering/ standardisation • Active involvement of stakeholders • Workshops/training • Public Private Partnership Model • Active helpdesk

  15. Thank you

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