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e-procurement

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... 14 Municipalities 14 27 34 75 Autonomous Bodies 0 2 1 3 Total 32 48 52 135 eProcurement Status (March 2008) 20 Govt Departments 26 Public sector ... – PowerPoint PPT presentation

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Title: e-procurement


1
Ajay Sawhney, former Secretary ITC
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
  • States 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)
  • ITC 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
  • Improved risk 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
Financial Year 2004-05 2005-06 2006-2007 Total
Departments 9 4 3 16
Public Sector Companies 7 6 9 22
Universities 0 1 4 5
Municipal Corporations 02 08 04 14
Municipalities 14 27 34 75
Autonomous Bodies 0 2 1 3
Total 32 48 52 135
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 ( 9981 Nos)
  • 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 1COT
Estimated/ Tender Contract Value
Year No. of tenders ECV(Cr) TCV (Cr)
2001-02 188 755.29 735.57 (-)2.65
2002-03 125 558.36 510.07 (-) 8.65
2003-04 160 1101.69 884.21 (-) 19.74
2004-05 94 755.56 667.09 (-) 12.02
Comparison between the two systems
Type No. of tenders ECV (Cr) TCV (Cr)
eProcurement(2003-04) 107 733.55 549.93 (-)25
Conventional(2003-04) 53 368.14 334.78 (-) 9
eProcurement(2004-05) 90 725.52 638.29 (-)12.02
Conventional(2004-05) 5 30.04 28.80 (-) 4.12
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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