ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC ASIAN DEVELOPMENT BANK INSTITUTE PUBLIC PROCUREMENT SERVICE OF THE REPUBLIC OF KOREA
E-procurement
E-procurement
United Nations publication Sales No. E.06.II.F.15 Copyright © United Nations 2006 All rights reserved Manufactured in Thailand ISBN: 92-1-120468-2 ST/ESCAP/2406
The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Mention of firm names and commercial products does not imply the endorsement of the United Nations. The views expressed in papers and addresses from sources other than the United Nations Secretariat, the Asian Development Bank Institute (ADBI) and Public Procurement Service of the Republic of Korea (PPS) are those of the authors and do not necessarily reflect the views of the United Nations Secretariat, the Asian Development Bank (ADB), ADBI or PPS. This publication has been issued without formal editing. ii
References have, wherever possible, been verified.
Preface
PREFACE In recent years, the countries of the Asian and Pacific region have increasingly adopted information and communication technology (ICT) to enhance government services and business transactions. An ICT-enabled procurement system and government adoption of e-commerce can transform business processes between the suppliers in the private sector and the Government. E-procurement promotes greater accountability of the Government, increases efficiency and cost-effectiveness and enables equal access to the public sector market. Developing countries can use e-procurement as a tool to achieve better governance and enhance economic development. Many nations have developed e-commerce systems, and are rapidly expanding the use and knowledge of ICT by establishing public e-procurement and digital collaboration between government and the private sectors. However, successful implementation of e-procurement remains a challenge. It requires a fundamental transformation of traditional government organization, development of infrastructure; and financial and human resources. A successful transparent e-procurement system requires policies, legislation and a legal framework conducive to reorganizing the Government and its services to the citizens, businesses and institutions. The International Conference on E-procurement assisted the participants to gain a better understanding of e-procurement and e-government, and build capacity for the planning and implementing of an e-procurement system. The workshop was intended to assist the participants in defining priorities and specific actions for progressing to e-procurement. Representatives of participating countries were able to share their experiences in the implementation of e-government and e-procurement and discuss issues and options for implementation. Some of the topics addressed at this conference included: re-engineering internal processes of government/public administration, factors critical to the successful implementation of e-procurement including e-training of government officials; stakeholder participation in egovernment projects; building community and government leadership; and security and privacy issues in e-procurement. Participants were required to submit a proposal for implementing e-procurement in their countries, which could potentially be executed. The International Conference on E-procurement was organized by the Asian Development Bank Institute (ADBI), the Public Procurement Service of the Republic of Korea (PPS), and the Economic and Social Commission for Asia and the Pacific (ESCAP). The organizers would like to thank the Korean IT Industry Promotion Agency (KIPA), Korea Information Strategy Development Institute (KISDI), Asian Development Bank (ADB), Samsung SDS Co., Ltd., Microsoft Corporation and International Business Machines Corporation (IBM).
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Contents
Contents Page Preface ..................................................................................................
iii
PART ONE – SUMMARY OF THE WORKSHOP ...................
1
I.
ORGANIZATION OF THE WORKSHOP ........................
3
A. Organization ..........................................................................
3
B. Objectives of the Workshop.................................................
3
C. Opening of the Workshop ....................................................
4
D. Attendance ............................................................................
6
E. Election of officers ...............................................................
6
F.
Adoption of the agenda ........................................................
6
PROCEEDINGS OF THE WORKSHOP ...........................
7
A. Strategies and policies of electronic procurement and the MDB ..................................................
7
B. Preparing project proposals for e-procurement...................
8
C. An overview of e-government in South-East Asian countries .....................................................................
10
D. Guideline for preparing a request for technical advisory service ....................................................................
13
E. E-government master plan consulting: Myanmar’s case ....
13
F.
Japanese e-procurement in the construction sector ...........
14
G. Public e-procurement: MDB best practices ........................
16
H. Case study: innovation in procurement through government e-procurement system (GePS) ........................
20
I.
Standardization of e-procurement ........................................
22
J.
Electronic government procurement strategic planning ......
24
K. Procurement transformation: the role of open standards in e-procurement ..................................................
26
L. Legal aspects of e-procurement ..........................................
28
M. Buyer-supplier activation ......................................................
32
N. Case study: e-procurement in India.....................................
33
II.
v
Contents
Contents
(Continued)
Page
vi
O. National e-procurement service experience ........................
35
P.
E-catalogs and product information management ...............
38
Q. Conducive environments for e-procurement: examples and best practices ................................................
40
R. Protocols for government procurement of software assets .....................................................................
43
S. Cubic model of selecting countries and areas for technical advisory services of e-government related systems ...........
45
T. PKI-based secure e-procurement ........................................
46
U. Introducing e-government in the Republic of Korea ..........
48
V. Overview of emerging threats in cyber world ...................
51
PART TWO – SUMMARY OF COUNTRY REPORTS ............
53
A. Bangladesh ............................................................................
55
B. Bhutan ...................................................................................
56
C. Cambodia...............................................................................
57
D. China .....................................................................................
58
E. India .......................................................................................
59
F.
Indonesia ...............................................................................
60
G. Lao People’s Democratic Republic .....................................
62
H. Mongolia ................................................................................
63
I.
Myanmar ...............................................................................
64
J.
Nepal .....................................................................................
65
K. Pakistan .................................................................................
66
L. Papua New Guinea ..............................................................
67
M. Philippines ..............................................................................
69
N. Sri Lanka...............................................................................
70
O. Thailand .................................................................................
71
P.
Timor-Leste ...........................................................................
72
Q. Viet Nam...............................................................................
73
Contents
Contents
(Continued)
Page ANNEXES Annex I. Workshop agenda .................................................................
77
Annex II. List of participants ................................................................
81
LIST OF FIGURES 1.
Descriptive statistics of e-readiness for South-East Asian countries ................................................................................
12
2.
E-bidding system for Japan public works ......................................
15
3.
Evolution to open standards ...........................................................
28
4.
System architecture of GePS .........................................................
36
5.
3-tier architecture of GePS ............................................................
37
6.
Product information management ...................................................
39
7.
Cubic model ....................................................................................
45
8.
PKI solution to hacking attempts ...................................................
47
9.
E-government strategy in the Republic of Korea .........................
50
vii
Abbreviations
Abbreviations
viii
ADB
Asian Development Bank
ADBI
Asian Development Bank Institute
ADSL
asymmetric digital subscriber line
APEC
Asia Pacific Economic Cooperation (currently comprises 21 countries/areas including Australia; Brunei Darussalam; Canada; Chile; China; Hong Kong, China; Indonesia; Japan; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; Philippines; Republic of Korea; Russian Federation; Singapore; Taiwan Province of China; Thailand; and United States of America)
API
Application Program Interface
ASEAN
Association of Southeast Asian Nations (comprises Brunei Darussalam, Cambodia, Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, Philippines, Singapore, Thailand and Viet Nam)
ASP
application service provider
B2B
business-to-business
BIR
Bureau of Internal Revenue
BPR
business process reengineering
C1 India
Commerce One India
CAs
Certification Authorities
CALS/EC
Continuous Acquisition Life-cycle Support/Electronic Commerce
CD-ROM
compact disk – read only memory
CEZA
Clark Economic Zone Authority
CICT
Commission on Information and Communications Technology
CMP
Code des Marchés Publiques
CompTIA
Computing Technology Industry Association
COA
Commission on Audit
CRC
Communication Regulatory Commission
CSO
Civil Society Organization
CSTB
Central Supply and Tenders Board
Abbreviations
Abbreviations
(Continued)
DBM-PS
Department of Budget and Management Procurement Service
DOST
Department of Science and Technology
DRC
digital resource connectivity
DSE&IC
Department of State Enterprises, Information and Communication
DTI
Department of Trade and Industry
e-CRM
electronic customer relationship management
e-GP
e-government procurement
EBMS
ebXML message services
ebXML
Electronic Business using eXtensible Markup Language
EDI
Electronic data interchange
EGD
Electronic Government Directorate
EO
Executive Order
eP
e-procurement
EPS
Electronic Procurement System
ESCAP
Economic and Social Commission for Asia and the Pacific
EUI
Economist Intelligence Unit
FCGO
Financial Controller General Office
FeP-System
Federal e-Procurement System
G2B
government-to-business
G2G
government-to-government
G4C
Government for Citizen System
G7
Group of Seven consists of France, Germany, Italy, Japan, the United Kingdom, the United States and Canada
GePS
government e-procurement system (Republic of Korea)
GEPS
Government Electronic Procurement System (Philippines)
GDP
gross domestic product
GPL
Government Procurement Law
HLCIT
High Level Commission for Information Technology
ix
Abbreviations
Abbreviations
x
(Continued)
IBM
International Business Machines Corporation
IAC
Inter-Agency Committee
IC
integrated circuit
ICT
information and communication technology
ICTA
Information and Communication Technology Authority of Mongolia
ICTA
Information and Communication Technology Agency of Sri Lanka
ID
identity document
IDF
International Development and Finance
IFI
International Financial Institutions
IGIS
Integrated Government Information System
I-Hubs
information hubs
IPAs
Investment promotion agencies
IRRs
Implementation Rules and Regulations
ISC
Initiative for Software Choice
ISP
Internet service provider
IT
information technology
ITIL
IT infrastructure library
KIPA
Korean IT Industry Promotion Agency
KISDI
Korea Information Strategy Development Institute
L2
layer 2
L4
layer 4
LAN
local area network
Lao PDR
Lao People’s Democratic Republic
LGU
local government unit
M&E
monitoring and evaluation
MDB
Multilateral Development Bank
MICT
Ministry of Information and Communication Technology
MIS
management information systems
MOF
Ministry of Finance
Abbreviations
Abbreviations
(Continued)
MoIT
Ministry of Information Technology
MOU
memorandum of understanding
MOIT
Ministry of Information Technology
MPI
Ministry of Planning and Investment
MTDS
Medium Term Development Strategy
NCC
National Computer Center
NEGC
National Electronic Government Council
NEGP
National E-Governance Plan
NGO
non-governmental organization
NGPES
National Growth and Poverty Eradication Strategy
NiDA
National Information Communications Technology Development Authority, Cambodia
NICT
National ICT Committee
NRI
Network Readiness Index
NISG
National Institute for Smart Government
NITP
National Information Technology Park
NPA
National Procurement Agency
NSC
National Security Council
OECD
Organisation for Economic Co-operation and Development
PANGTEL PBN
Papua New Guinea Radiocommunications and Telecommunications Technical Authority Philippine Business Number
PCB PEZA
Pakistan Computer Bureau Philippines Economic Zone Authority
PhilGEPS PIM
Philippine Government Electronic Procurement System product information management
PKI PPP
public key infrastructure Private-Public-Partnership
PPRA PPS
Public Procurement Regulatory Authority Public Procurement Service of the Republic of Korea
PrMO
Procurement Monitoring Office
xi
Abbreviations
Abbreviations PS-DBM PTTAF
Department of Budget and Management’s Procurement Servic Policy, Training and Technical Assistance Facility
R&D RA RA RFID RIC
research and development regulatory authority Republic Act radio frequency identification Regional Information Center
SEC SICT SMART
Securities and Exchange Commission Support ICT Task Force specific, measurable, attributable, relevant and time-bound small and medium-sized enterprise service-oriented architecture Simple Object Access Protocol state-owned enterprise structured query language Social Security System a strategic planning tool used to evaluate the strengths, weaknesses, opportunities and threats
SME SOA SOAP SOE SQL SSS SWOT Analysis
xii
(Continued)
TA TAS
trading associations technical advisory service
UN/CEFACT UNCITRAL UNDP UNPSC
United Nations Centre for Trade Facilitation and Electronic Business United Nations Commission on International Trade Law United Nations Development Programme United Nations Standard Products and Services Code
VoIP
Voice over Internet Protocol
WAN WTO
wide area network World Trade Organization
XML
extensible markup language
PART ONE Summary of the Workshop
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Organization of the Workshop
I. ORGANIZATION OF THE WORKSHOP A. Organization The International Conference on E-procurement was organized by the Asian Development Bank Institute (ADBI), the Public Procurement Service of the Republic of Korea (PPS) and the Economic and Social Commission for Asia and the Pacific (ESCAP) with the support of the Korean IT Industry Promotion Agency (KIPA), Korea Information Strategy Development Institute (KISDI), Samsung SDS Co., Ltd., Microsoft Corporation and International Business Machines Corporation (IBM), in recognition that many governments in the Asian and Pacific region were in the process of introducing e-procurement. B.
Objectives of the Workshop
The objectives of the workshop were to review business models and strategies to make procurement more open, transparent and cost-effective; and provide specific recommendations on strategies for the development of e-procurement. E-procurement has the potential to improve efficiency in government administration and promote competition in the business sector. However, there are a multitude of challenges in introducing and implementing an e-procurement system. Infrastructures are underdeveloped and there is a lack of awareness among national and local government policymakers and businesses of the benefits that e-procurement can provide. Before an e-procurement system can achieve maximum potential, a strong infrastructure must be developed, ICT services expanded, innovative policies administered to establish a secure online environment, standards developed; and government administrators and private sector human resources must be trained. While the benefits of e-procurement are numerous, there remains a need for a better understanding of the impact and role of an ICT enabled procurement system. In view of the large amount of resources required in implementing e-procurement, the sharing of knowledge and experience could help developing countries in the region to reduce costs and time required to develop suitable e-procurement systems and content. In support of that goal, the specific objectives of the workshop were as follows:
•
To review diverse business models and trends in electronic procurement
•
To examine conducive policies, legal framework and technological infrastructure required for e-procurement
•
To draft project proposals to promote e-procurement in participating countries
3
Organization of the Workshop
C. Opening of the Workshop The conference was opened on 20 June 2005 in Seoul. Mr. Choi Kyung-Soo, Administrator of Public Procurement Service of the Republic of Korea, presented the opening remarks. The Public Procurement Service (PPS) of the Republic of Korea provides e-procurement services to public organizations so that public works can function efficiently. E-procurement provides the highest quality service at a low cost. Traditional paper-based procurement procedures are time consuming and vulnerable to corruption and irregularities. Elimination of corruption is imperative for developing countries to enhance government efficiency and economic development. Public procurement generally represents 10 to 50 per cent of a country’s gross domestic product (GDP) therefore e-procurement policies should be in line with government economic policies. In the Republic of Korea, 18 million businessmen are now participating in the bidding process through the Internet and the efficiency of public organizations has been dramatically increased in terms of human resources and document management. In closing, Mr. Choi said that the conference would serve as productive venue for in depth discussion and dialogue. In his opening remarks, Mr Kim Hak-Su, Under-Secretary-General, United Nations and Executive Secretary, ESCAP, said that one of the important e-government applications is e-procurement, the use of ICT by government organizations in their purchase of goods and services from the private sector. The public sector makes up 20 to 30 per cent of a national economy, thus public procurement can have a significant impact on the management of vast resources and overall efficiency of the economy and competitiveness of local enterprises. Benefits of e-procurement for public administrators include lower costs, improved quality of purchases and increased productivity. Further, eprocurement encourages full computerization of procurement procedures, facilitates transparent public decision making and is a deterrent to lack of compliance and corruption. In the business sector, e-procurement can provide easier access to the public sector market, reduction in market surveillance costs, time savings, more transparent evaluation of tenders, and reduction in market entry costs. By allowing fair and equitable access to government contracts for a wider range of companies, e-procurement contributes to reduction of monopolies or selection of favoured suppliers. While it is difficult to measure the benefits of competition and efficiency in quantitative terms, it is estimated that if online procurement is generalized, it can save the government up to five per cent of expenditures and 50 to 80 per cent on transaction costs for both buyers and suppliers.
4
The introduction of automation into the public sector does not automatically create better or more open governance unless it is based on open and citizen centric approaches. Therefore, the challenges faced by the
Organization of the Workshop
developing countries are to bring management, organizational and behavioural changes while building capacity. In closing, Executive Secretary of ESCAP said that ESCAP would continue to play its role in promoting regional cooperation for socio-economic development in the Asian and Pacific region including that related to ICT. In his opening remarks, Mr. Peter McCawley, Dean, ADBI reinstated the objectives of the workshop. He said that e-procurement offers a range of benefits. First and most importantly, e-procurement will enhance transparency of transactions. Second, e-procurement saves time and lowers costs; increases productivity; and standardizes, streamlines and integrates processes. Finally, e-procurement and ICT offer new prospects for development limited only by the speed of change and imagination. However, enacting and implementing e-procurement is extremely challenging. Eprocurement requires committed leadership, new legislation, government reorganization and infrastructure development. It is important to remember, however, that technology alone will not solve all the problems. Instead, experience shows that successful e-government systems involve governance; management; and organizational and behavioral changes. In closing, Mr. McCawley explained that ADBI is a think tank that conducts research, workshops, capacity building, and outreach activities. He asked the participants to produce good project proposals and learn from each other. Mr. Jeoung-Keun Lee, Senior Capacity Building Specialist, ADBI, introduced the workshop by outlining a timetable to accomplish the objectives that include: (i) to review diverse business models in e-procurement; (ii) to examine issues, policies and conducive environments for promoting eprocurement; and (iii) to draft project proposals to introduce e-procurement. In order to achieve these objectives the following schedule would be followed:
• • • • • •
Day Day Day Day Day Day
one: two: three: four: five: six:
how to draft project proposals country reports and best practices study tour (PPS and Samsung SDS) e-procurement in action conducive environment for e-procurement presentation of project proposals
Mr. Lee explained that each participant was allocated only five minutes to present the country report and an additional five minutes for questions. Each participant was also expected to produce a feasible project proposal according to the guidelines for drafting a project proposal provided by ADB. The expected outputs of the workshop were: project proposals to introduce e-procurement; proceedings CD-ROM; workshop report; lecture CD-ROMS; and networking with experts.
5
Organization of the Workshop
D.
Attendance
Participants from 17 countries in the region attended the conference. Resource persons for the conference included experts from academic institutions, development agencies, government ministries as well as the private sector including Samsung SDS, Microsoft and IBM. E. Election of officers The workshop elected the following persons to serve as officers: Chairperson: Vice-Chairperson:
Mr. Seerat Asghar (Pakistan) Ms. Rosa Maria Martinez Clemente (Philippines)
F. Adoption of the agenda The following agenda was adopted by the workshop: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.
6
18. 19. 20.
Opening of the workshop. Election of officers. Group photo session. Introduction to the workshop. Strategies and policies of electronic procurement and the multilateral development bank (MDB). Preparing project proposals for e-procurement. An overview of e-government in South-East Asian countries. Guideline for preparing a request for technical advisory service. E-government master plan consulting: Myanmar’s case. Japanese e-procurement in the construction sector. Public e-procurement: MDB best practices. Site visit of Samsung SDS in Kwacheon. Site visit of Public Procurement Service in Daejeon. Case study: innovation in procurement through government e-procurement system (GePS). Standardization of e-procurement. Electronic government procurement strategic planning. Procurement transformation: the role of open standards in eprocurement. Legal aspects of e-procurement. Buyer-supplier activation. Case study: e-procurement in India.
Strategies and policies of electronic procurement and the MDB
21. National e-procurement service experience. 22. E-catalogs and product information management. 23. Conducive environments for e-procurement: examples and best practices. 24. Protocols for government procurement of software assets. 25. Cubic model of selecting countries and areas for technical advisory sercices of e-government related systems 26. PKI-based secure e-procurement. 27. Introducing e-government in the Republic of Korea. 28. Overview of emerging threats in cyber world. III. A.
PROCEEDINGS OF THE WORKSHOP
Strategies and policies of electronic procurement and the MDB Mr. Robert Rothery, Principal Procurement Specialist, Project Coordination and Procurement Division (COPP), ADB
The presentation by Mr. Rothery provided an introductory overview of the multilateral development banks (MDB) working group on electronic government procurement (e-GP). The MDB working group defines e-GP as the use of ICT, especially the Internet, by governments in conducting their procurement relationships with suppliers for the acquisition of goods, works, and consultancy services. E-tendering relates to public tenders for the acquisition of specialized goods, works, and consulting services that are of high value and low volume. E-purchasing relates to the acquisition of lowvalue and high-volume standard goods and services. The MDB working group on e-GP is comprised of the Asian Development Bank; InterAmerican Development Bank, the World Bank, the African Development Bank; and the Nordic Development Fund. The objectives of the MDB working group are:
• • • • •
Promote common understanding of e-GP Jointly develop tools for policy making, assessment, and planning Share e-GP strategies and approaches Harmonize policy work Cooperate on workshops and seminars
The benefits of e-GP are efficiency, transparency, equity, fairness, and encouragement of local business. Efficiency is achieved because eprocurement increases competition and lowers prices; lowers transaction costs, minimizes time and errors in the bidding process; and streamlines decision-making. Transparency entails more timely information to more
7
Preparing project proposals for e-procurement
people; a procurement transaction paper trail; document management; disclosure and analysis of outcomes; and audit and sanctioning. Equality and fairness means that the procurement process is neutral to location and time. In e-procurement transparent rules and processes level the playing field, and simplified procedures reduce the gap in ICT skills and knowledge. Local businesses and small and medium enterprises (SMEs) are encouraged to participate because standard procedures simplify bidding; built in features target SMEs; and business networking, and subcontracting is promoted. The following factors contribute to the successful development and deployment of an e-procurement system:
• • • • •
Government leadership Policy and legal framework Institutional change Awareness and capacity building Technology
In conclusion Mr. Rothery referred participants to the website for the MDB working group on e-GP at www.mdb-egp.org. B.
Preparing project proposals for e-procurement Mr. Pil-Bae Song, Principal Energy Specialist, Energy Division (SAEN), ADB
The objective of the presentation by Mr. Pil-Bae Song was to assist the participants with preparation of a project proposal. Mr. Song specified the difference between operations and projects. Operations are ongoing and repetitive while projects are temporary, and unique to a particular situation. A project, therefore, can be defined as a temporary endeavor undertaken to create a unique product or service. The cycle of a (ADB) project consists of six stages, which are: 1. 2. 3. 4. 5. 6.
22 8
Identification Preparation Appraisal Loan negotiation and board approval Implementation Evaluation
Preparation of a project proposal requires early planning and analytical thinking. Analytical thinking is critical in order to define problems to be solved; understand causes and effects of the problems; enable the ensuing project to address the problems with clear objectives; and develop clear orientations. Preparation of a project proposal is divided into the following steps:
Preparing project proposals for e-procurement
Step 1: Step 2:
Assess sector performance and problems Identify sector constraints and issues
Step 3:
Analyze cause-effect relationships to identify factors influencing problems
Step 4:
Search for opportunities and solutions
Step 5:
Identify lessons learned
Step 6:
Establish an objective for the project
Step 7:
Design a project by tackling causal factors using a logical framework
Next, Mr. Song applied the step by step process for conceptualizing an e-procurement project. Step one, assessment of sector performance and problems: the sector may reveal poor governance including lack of transparency, fairness and accountability. Problems are inefficiencies in public procurement process such as lack of competition, and time consuming bidding process. Step two identifies an absence of a legal and policy framework in addition to the lack of constitutional capacity for adequate implementation of the public procurement process. Step three demonstrates that the factors influencing the problems are inadequate regulation of the procurement process, and difficulties for suppliers/businesses in accessing market and obtaining information. Step four indicates specific solutions: legislation and regulation to increase transparency; introduction of e-procurement; capacity building of public procurement agencies; and integration with private sector. The lessons learned in step five are: study onshore and offshore experiences, analyze relevance of experiences to local context. Step six of the project preparation process establishes the objective for the project: convert negative problem statements into a positive objective statement, in other words, an efficient public procurement system. The project framework is a critical component of the project proposal. The project framework should include the following:
• • • •
Impact or goals – Statement of desired medium-term impact (achievable around 3 years after completion) that is partly attributable to the project. Outputs – Describes the tangible goods or services produced by the project such as infrastructure system constructed, services operational, policies formulated, capacity built etc. Activities – Tasks carried out using project inputs in order to produce desired outputs. Inputs – Main resources (financial and human) required to carry out the project that need to be provided by funding agencies, government and others.
23 9
An overview of e-government in South-East Asian countries
•
• •
Performance targets/indicators – Indicators are measures to be used for determining level of achievement for a result. Target is the time-bound and desired level of achievement for a result and activities over a baseline level. These should be SMART: specific, measurable, attributable, relevant and time-bound. Monitoring mechanisms – Source of data for measurement of attainment for each indicator/target. Assumptions and risks – Assumptions are conditions, events or actions that project designers recognize as being necessary for the cause and effect logic to hold true, but that are collateral to the project scope. Risks are potential adverse events or actions that are outside the control of the direct management of the project, but if they occur would negatively influence the project.
Mr. Song presented an outline for the contents of a project proposal: 1. 2. 3.
Introduction Issues The Proposed Project a. Purpose and output b. Methodology and key activities c. Cost estimates and financing plan d. Implementation arrangement e. Benefits of the project
In closing, Mr. Song recommended the following guidelines for preparing a project proposal:
• • • •
Know the potential funding sources Focus on the right topics – align with developmental priorities of the funding agencies Justify the project in collaboration with stakeholders Prepare adequate implementation arrangements in order to implement the project on time and within cost limits
C. An overview of e-government in South-East Asian countries Mr. Won-Jun Lee, Professor of Management Information System, Sungkyunkwan University
10
The presentation by Mr. Won Jun Lee gave a comparative overview of e-government readiness in the South-East Asian region. Mr. Won-Jun Lee explained that the approach in this presentation was not case oriented, instead the presentation data was derived from public evaluation of egovernment and overall readiness. Evaluation was based on an e-govern-
An overview of e-government in South-East Asian countries
ment performance model and aimed to establish the differences and similarities among South-East Asian e-governments. First, it is necessary to determine the values to be expected from egovernment, which are efficiency, participation, and transparency. The values of e-government can be generated from the following factors:
• • •
Environment including technology infrastructure and economic, legal and social infrastructure E-government readiness including back-end operations, front-end interactivity and readiness of individuals and businesses E-government performance or delivery of e-government values to stakeholders
The e-government performance model was based on two types of eindices. The first type was e-economy with more emphasis on basic infrastructure and a nation’s readiness for business and growth. The second type is e-society which focuses more on the ability of the overall society to benefit from ICT. The specific indices used were the Economist Intelligence Unit (EIU), the United Nations Global E-government Readiness Survey, and the Network Readiness Index (NRI) published by the World Economic Forum. The EIU e-readiness rankings were based on six components: connectivity and technology infrastructure; business environment; consumer and business adoption; legal and policy environment; social and cultural environment; and supporting e-services. The United Nations e-government readiness is based on the state of e-readiness including websites and facilities; telecommunications infrastructure; and the extent of e-participation including availability of online information and tools for citizens. The World Economic Forum’s NRI included the following subcomponents: environment including market, political/regulatory, and infrastructure; readiness of individuals, businesses, and governments to utilize and benefit from ICT; and usage of ICT by individuals, businesses, and governments. Mr. Won-Jun Lee aggregated the sub-indices for each country. He calculated the z-scores for each index item to standardize the numbers and averaged the z-scores for each category available (figure 1). The countries included in the analysis were: Bangladesh, Indonesia, Malaysia, Pakistan, Philippines, Sri Lanka, Thailand, and Viet Nam. The categories were participation (PRT), transparency (TRP), technological infrastructure (TI), non-technological infrastructure (NTI), individual readiness (IR), business readiness (BR), and government readiness (GR). The readiness levels of the South-East Asian countries were compared with member countries of APEC and G7. In summary, the findings of the study indicated that South-East Asian countries are consistently low in all categories and thus must undertake
11
An overview of e-government in South-East Asian countries
Figure 1.
Descriptive statistics of e-readiness for South-East Asian countries
large efforts in order to improve e-government programmes and services. The study also reveals that South-East Asian countries share common problems, statistically they form a cluster distinct from advanced countries in APEC and G7 which means that developing Asian countries should learn from more advanced countries. When looking at all countries there is a high correlation among the seven categories; participation is highly correlated with individual readiness, business readiness, government readiness and technological infrastructure. The results of the analysis yield the following conclusions:
12
•
E-government status of South-East Asian countries can be significantly improved
•
The cluster and correlation analysis imply that South-East Asian countries exhibit patterns distinct from more advanced G7 and APEC countries
•
Improvement in technological infrastructure leads to e-government readiness
D. Guideline for preparing a request for technical advisory service Expert on ICT, ICT Applications Section, Information,
Guideline for preparing a request for technical advisory service
Communication and Space Technology Division, ESCAP The Expert on ICT specified that all participants invited by ESCAP are required to complete a request forTechnical Advisory Service (TAS). The objective is to build capacity of government officials in planning and implementing e-government. In order to achieve this objective a project entitled building national capacity for efficient delivery of ICT applications was developed by ESCAP. The activities involved in this project are desk study on e-government in South-East Asia; sub-regional workshop to share best practices; and technical advisory service at the national level. A TAS is an arrangement for an advisory service from experts. According to the ESCAP project, each year two South-East Asian countries will be selected based on needs study, needs assessment and TAS request for the services in specific fields of e-government. The TAS team will be composed of ESCAP staff, experts from the private sector, local experts and government officials in charge. At the final stage, it is expected a business plan or advisory report will be produced subject mainly to the request of the country and current development status. The Expert said that participants should prepare a three to four page proposal that includes the following components:
•
Introduction: Summary of overall current status of e-government development
•
Issues: Identify one specific field in which the country would like to receive TAS. Analyze issues and problems in the field mentioned
•
Information on the field (system): Describe development plan in the field in detail including goal, input, leading agencies, financial arrangement current stage and time schedule
•
TAS arrangement: Specific areas of expertise, expected TAS duration, and how to conduct the TAS. Contact information for focal points in government and local experts. Possible support for TAS team if the team is dispatched to country such as support for transportation and facilities
E.
E-government master plan consulting: Myanmar’s case Mr. Sam-Youl Lee, Research Fellow, KISDI
The presentation by Mr. Sam-Youl Lee presented a study on the status of e-government in Myanmar. On the e-government index Myanmar is ranked 123 among 191 countries in the world. This ranking can be partly explained by the
13
E-government master plan consulting: Myanmar’s case
underdeveloped telecommunications infrastructure. Currently, there are few websites and wide area networks (WAN); there are about 50 computers per 100 employees; most of the generic software is rarely used; and only 11 per cent of websites provide online public service. The major obstacles are lack of skilled personnel; poor infrastructure; and insufficient budget. According to the survey the most important issues for the government administration of Myanmar are: improving efficiency; information sharing; and time saving. The most important issues in improving interaction between citizens and government are: more public information, reduce time; and reduce procedures. The action plan to modernize Myanmar though e-government is based on a SWOT analysis including detailed analysis of existing strengths, opportunities, weaknesses, and threats. The plan is divided into three stages each of which spans four years. The most important task is to select a priority project among the many necessary projects. Additional critical task is the formation of an e-government steering committee which should act as an enabler of government change and reform; and be directly under the Prime Ministers office. In closing, Mr. Lee said that support and town government leadership will be extremely crucial to the development and success of e-government projects. He added that future plans to develop egovernment systems look to failure cases so as not to replicate the mistakes. In the plenary, the participant from Myanmar said that an egovernment steering committee was already in place. Mr. Lee agreed but said that the committee needs more direct power from government leadership. F. Japanese e-procurement in the construction sector Mr. Minoru Kamoto, Group Leader, Electronic Delivery Group, CALS/EC Department, Japan Construction Information Center Mr. Kamoto provided an overview of the e-bidding system for the public works sector in Japan. E-government and Continuous Acquisition Life-cycle Support/ Electronic Commerce (CALS/EC) in the field of public works The construction sector represents a large area of investment in Japan: it accounts for 10 per cent of Japan’s GDP and employs 10 per cent of the Japanese workforce. Therefore it is critical to establish work efficiency and quality in management of public works procedures. An egovernment strategy was set out to improve construction technology, streamline construction projects; and promote safe and effective methods. The e-government strategy developed by the central Government of 14
Japanese e-procurement in the construction sector
Figure 2. E-bidding system for Japan public works Japan entails reform of the legislative framework and technological innovation. Computerization in the public works sector focused on “CALS/EC”. In 1996, the Ministry of Land, Infrastructure and Transport began construction of the CALS/EC Center to apply information technology (IT) for exchanging information among related bodies involved in public works projects. In the first phase of development, from 1996 to 1998, standardization of documents and forms was completed; digitized photos utilized; and e-bidding introduced. In phase two, from 1999 to 2001, e-delivery and e-bidding were launched. Between 2002 and 2004 e-delivery and e-bidding were fully implemented. E-bidding core system The e-bidding system for Japan public works has enhanced transparency of procedures and improved work efficiency (figure 2). The e-bidding protocols prescribe that a contract is automatically awarded to the lowest bidder, but there are exceptions to this rule. An evaluation of the overall greatest value, a low bid price examination system, and lower limit price system may not result in awarding the contract to the lowest bidder. The core system provides a highly flexible e-bidding system that can be used by multiple public agencies. All functions necessary for biddingrelated work are implemented in this system. The basic concept of the core system is to allow “the core” of the systems to be shared and used by
15
Public e-procurement: MDB best practices
multiple public purchasers. The development cost of the core system is shared among all public agencies. One central e-bidding system divides the development cost of the core system among all public agencies, and eliminates the expenses accrued if each agency were to develop their own software. A variety of bidding methods are provided for construction, operation work and goods procurement. In addition, the “customizable area” that allows screen design changes and free modifications is provided for the individual procurers. The Application Program Interface (API), which facilitates coordination with related systems including qualification examination system and contract/financial system, enables the sharing of information related to bidding. Furthermore, multi-platform support is provided for compatibility with multiple operating systems (UNIX, Windows and Linux) and e-bidding system devices can be freely configured. For security purposes the core consortium has established a uniform profile standard to allow multiple private Certification Authorities (CAs) to provide certification services. These private CAs provide certification services based on the Electronic Signature Law (the law concerning electronic signatures and certification services). The Core System uses integrated circuit (IC) card as a medium to store an electronic certificate for identification. In June 2005, 64 domestic organizations (8 central government offices, 4 public corporations and 52 local government agencies) purchased the core system, 49 of which have already started operations. The number of organizations that use the system is expected to increase in the future. Since 21 April 2003, the Ministry of Land, Infrastructure and Transport has carried out procurement through the core system for all public works. The accumulated number of bid openings was approximately 36,000 in the fiscal year 2004. The public sector of Japan has striven for coordination of regulations in overseas construction markets. International standards concerning e-tendering have been examined by UN/CEFACT (United Nations Centre for Trade Facilitation and Electronic Business) based on the core system in Japan. G. Public e-procurement: MDB best practices Mr. Robert Rothery, Principal Procurement Specialist, Project Coordination and Procurement Division (COPP), ADB Mr. David McDermont, Managing Director, International Governance Solutions
16
The presentation introduced the guide for best practices and use of e-government procurement (e-GP) for multilateral banks (MDB). The MDB guide on e-procurement sets out the standards that electronic procurement systems must meet in order to be acceptable for use on projects financed
Public e-procurement: MDB best practices
by multilateral banks. The principles for MDB e-procurement systems are:
• • • • •
Economy, efficiency and transparency Nondiscrimination and equality of access Open competition Accountability Security of process
A procurement system consists of bidding and tendering of goods, works, services, and consulting. It is applicable to all bidding stages from advertising and publishing results, to issuance of documents and receipt of bids and evaluation. The MDB guide covers four areas: system characteristics; advertising and disseminating information; bidding procedures; and evaluation and contract award. The following system characteristics are recommended:
• • • • • • •
Open, unrestricted, public access Single enrollment and no fees Ensure interoperability through open standards Commonly used document software Reliable and secure Processes traceable and auditable Paper-based option
Advertisements should use websites that are publicly accessible and provide secure log in. The restrictions on participation or qualification should be clearly stated on the website. The communication procedures should include website posting with notification, proper documentation control, email clarification during bidding, and auditable records. Bidding documents should be auditable master documents based on standard MDB hard copy documents. The MDB procurement system does not charge a fee for submitting a bid. In the e-procurement business model, however, the MDB agreed that charges and fees be allowed. There is no payment for notification or advertisement, but a fee can be administered for the reading and downloading of documents. If a fee is administered, it should be payable online or payment time should be added to the bidding period; and a bidder account should be set up to accumulate transaction fees. Bid submission should have a secure system that ensures confidentiality and integrity. Bids should be submitted in an electronic bid box and documents encrypted with date and time stamps. The MDB guide discourages bid securities because it adds additional time and complications. The
17
Public e-procurement: MDB best practices
public bid opening should be posted on the website. The bids should be protected until a contract is awarded, prices should be kept confidential, and print proposals should be allowed. For internal operations, evaluation and award can be automated. On the issue of security it is important to note the difference between a digital signature and an electronic signature. An electronic signature can be any written name faxed or by e-mail. However a digital signature or certificate is a specifically assigned code which verifies that a document belongs to certain holder. Encryption technology based on public key infrastructure (PKI) is necessary to ensure the privacy and integrity of documents during transmission. The PKI depends on the issuance of keys to the parties who are exchanging information. MDB believes that certificates should be obtainable in advance and valid for a reasonable time such as 6 months. A bidder should not have to travel in order to obtain a certificate, instead, it should be provided online and authenticated in the bidder’s country. In response to a question on the body responsible for receiving the payments, Mr. Rothery replied that it is the procurement entity hosting the website that receives the payment or it is a service provided by a third party, but it is not the MDB itself. The issue of bid securities was raised. Mr. Rothery explained that bid securities is a difficult issue because although it provides financial security, it is preferable to use other mechanisms such as sanctions to ensure that bidders follow through with their bids. A participant asked why paper based documents should be continued along with electronic bidding. Mr. Rothery explained that e-procurement is in the initial stages of adoption, and thus MDB does not want to exclude any potential bidders. Another question was raised on whether a government agency should be required to act as a certificate authority. Mr. Rothery said that this may be required in some countries, but in the MDB procurement system, private companies can act as certificate authorities. The second part of the presentation provided by Mr. McDermont focused on the MDB e-GP Readiness Assessment. E-GP readiness assessment is a useful planning tool for governments because it reveals/demonstrates the current environment including the issues, hurdles and risks related to the development of an e-procurement system. The MDB e-GP Readiness Assessment was developed through research on the strategic components and subcomponents of e-GP strategies used in advanced countries; the realization that e-GP is much more than the application of technology; interviews with informed stakeholders; review international ereadiness surveys and applying and modifying the assessment in China, Fiji, Sri Lanka, Jamaica, Peru, and Ecuador. 18
Public e-procurement: MDB best practices
When conducting an assessment it is important to gather the views of all stakeholders involved in the long-term development of the e-GP system. The stakeholders may come from: many sectors of the public sector such as business policy, finance, procurement management, and IT planning, among others; and the private sector such as supplier associations in construction and health, and consumer groups, among others. The key components of the assessment are:
• • • • • • • • •
Government leadership Human resources management Planning and management Policy- intent of e-procurement approach Legislation and regulation Infrastructure and web services Standards Private sector integration E-procurement systems
The levels of readiness for components and subcomponents are: 1. 2. 3. 4.
No evidence that component is in place and no evidence that it is supported Little evidence that component is in place and little or no evidence that it is supported Some evidence that component is in place and some evidence that it is supported Adequate evidence that component is in place and adequate evidence that it is supported
Mr. McDermont outlined the steps for setting up an assessment, which were:
• • • • • • • • •
Identify who will sponsor the assessment? Use internal and/or external expertise to coordinate, comment and report? Identify the respondents in both the public and private sectors Will respondents to be identified/not identified? Allow group responses? Is a briefing session required? Ensure respondents can contact the assessment coordinator/ assessor? Use follow up interviews/discussions with the respondents What time allowed?
19
Case study: innovation in procurement through government e-procurement system (GePS)
• •
How will assessment be reported and to whom? What feedback will be given to respondents?
Conducting the assessment involves the following activities:
• • • • • • • • • •
Confirm sponsor Identify respondents, involve sponsor Provide respondents with assessment and instructions Conduct briefing session if required Conduct follow-up interviews/discussions Receive respondent’s assessments Analyze responses Write report on findings and recommendations Distribute draft report for comment Present final report/other feedback
In the plenary, Mr. McDermont said that this type of assessment has been conducted in Asia, South America and Eastern Europe, and the report of the assessment and recommendations for change was presented to the governments involved. H. Case study: innovation in procurement through government e-procurement system (GePS) Mr. Hyung-Jong Min, Director General, Public Procurement Serviceof Republic of Korea (PPS) On the third day of the conference the participants were given the opportunity to take a study tour of the PPS headquarters. Mr. Hyong-Jong Min, Director General provided a comprehensive overview of the procurement system in the Republic of Korea. The procurement system of the Republic of Korea is a combination of centralized and decentralized systems. The Public Procurement Service (PPS) was created in 1949 as a provider of supply-related services for government departments and agencies. As the central procuring agency, PPS is responsible for the procurement of products and construction projects over a certain threshold. The functimmons of PPS are:
• •
20
• • •
Purchase goods and services valued at more than US$ 70,000 Contracts for construction services valued at more than US$ 3 million Stockpiles raw materials such as aluminum and copper Manages government owned properties Operates GePS
Case study: innovation in procurement through government e-procurement system (GePS)
Traditionally, the contracting and procurement processes were based on paper-oriented procedures that resulted in an inefficient and laborintensive process. Changes such as advances in information technology, progress in business transparency, and the realization of best value for customers, shaped the direction of PPS. PPS established the following:
• • • • •
Electronic data interchange (EDI) with customers and suppliers in 1997 E-shopping mall for commercially available products in 1998 E-Tendering in 2000 E-payment in 2001 Government e-procurement system in October 2002 for use by all public organizations
The major functions of GePS are:
• • •
Provides an “end-to-end” electronic procurement service where all procurement processes are conducted on-line Serves as a “Single Window” for public procurement – integrates and announces all public institutions’ bid information and shares all suppliers’ information Linked with 53 other institutions’ systems
GePS provides more sophisticated services such as wireless ebidding, mobile information services and property management through radio frequency identification (RFID). Electronic customer relationship management (e-CRM) services include optimized services for each customer and consulting services via a web call centre. High value added services such as D/W services, cost analysis, evaluation of bidders and e-catalog based on ontology are also available. The most notable achievements of GePS include:
• • • • • •
Used by about 30,000 institutions and 150,000 businesses Exchanges approximately 100,000 documents online a day World’s largest cyber market with an annual transaction volume of US$ 43 billion in 2004 Saves US$ 3.2 billion worth of transaction costs annually Improves transparency in doing business with the government Leads the development of private sector e-commerce
The GePS of the Republic of Korea has been selected as the best e-procurement practice model. The United Nations bestowed PPS with the Public Service Award in June 2003 and identified PPS as the Best Practice Model for e-procurement in November 2004. The factors contributing to the success of GePS are:
21
Standardization of e-procurement
• • • •
Strong will of the government for reform World-class Internet infrastructure already in place Application of systematic business process reengineering (BPR)/Internet service provider (ISP) and new technologies such as e-signature, encryption, e-documents Employees’ professionalism and their aspiration for change
In the plenary session that followed, a participant asked if suppliers in the GePS have access to buyer’s profiles including which services and goods buyers are looking for. It was explained that suppliers can see a record of purchases made by buyers. In response to a question on the legal status of PPS, the Director General said that PPS is part of the government but acts like a company working in the intra-governmental market. A participant asked how to promote the establishment of a centralized eprocurement system at an institutional level. The Director General suggested that whether the system is centralized or decentralized is not of utmost importance because these can be combined, but rather it is more important to standardize procedures. Furthermore, in the case of the Republic of Korea, resistance to change was overcome through year long negotiations among government agencies that eventually gave up their self interest in order to have a successful efficient procurement system. I. Standardization of e-procurement Mr. Jae-Yong Lee, Director, Information Management Division, Public Procurement Service of Republic of Korea (PPS) The presentation by Mr. Jae-Yong Lee highlighted the significance of standardization for e-procurement. Why standards? Mr. Lee mentioned three reasons for the standardization of eprocurement. First, standards are needed to standardize the independent procurement processes in ministries and local governments. Standardization enables the creation of one Application Service Provider and reduces customizing costs. Second, every transaction should be processed by e-documents with digital signatures. Public procurement requires a signed document for producing the evidence because it is related to financial works. End-to-end security and document exchange are needed for documentary evidence.
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Third, is the need for a linkage service with external systems. Public procurement is a complicated process which must be linked with other systems, such as Internet banking for e-payment or data sharing with business licenses. Therefore, all linkage should be based on a common platform that ensures mutual compatibility between the different systems. Furthermore, server-to-server security is needed for documentary evidence.
Standardization of e-procurement
Current status of standardization Standards for e-business have undergone extensive development. Currently, there is only one globally developed open extensible markup language (XML)-based standard framework which is built on a rich heritage of electronic business experience. The electronic business using extensible markup language (ebXML) e-business framework consists of five layers: messaging, registry and repository, collaboration protocol, core components, business processes. A framework for standardization should consist of the following:
• • • • •
Global standard – creating the technical specifications with world’s best experts Modularity – each specification can be independent from each other to facilitate easy adoption Collaboration – other standards (e.g. RosettaNet, SWIFT) take part in ebXML Technical Committee Evolvement – evolve the current state of art instead of imposing a new infrastructure Reusable – use other specifications whenever available and appropriate
However, no global standard for e-procurement has officially been recognized. The closest to a global standard is the UN/CEFACT approved business process for e-tendering approved on March 2005. It was agreed that the main processes in order are: registration public invitation, opening of tenders, and publication of award. Countries participating in the UN/ CEFACT business process are Czech Republic, France, Germany, Japan, Republic of Korea, Sweden and the United Kingdom of Great Britain and Northern Ireland. It is expected that an official standard for e-procurement will be established in March 2006 by the International Trade and Business Processes Group 6 (TBG6). These standards will eventually be extended to e-contracting and e-payment in 2005. Standards in GePS and Public Procurement Service of Republic of Korea The achievements of GePS regarding standardization:
•
GePS is the single portal for all public procurement in the Republic of Korea. 30,000 public organizations jointly use GePS of PPS
•
GePS is the world largest system for processing ebXML documents. GePS of PPS have established about 300 kinds of ebXML documents
23
Electronic government procurement strategic planning
•
GePS provides a one-stop service for all works. GePS is linked to 56 outer systems for one-stop service including data sharing and process integration
Currently, 66 kinds of ebXML documents are registered as national standards for e-documents. Annually, there are 122,035 bids for goods, works and services. There are total of 18,102,859 bidders yielding a transaction volume of US$ 24.6 billion. A total of 243 e-documents were transacted in 2004. In closing, Mr. Lee set out the following guidelines for standardization: 1. 2.
Follow the global standard as much as you can, even though its application is limited Establish a system based on ebXML documents with digital signature
3. 4.
Consider common use of the system with all public organizations Listen to the request of users and catch up with current ICT
5.
Make sure to integrate and share information across related outer systems
J.
Electronic government procurement strategic planning Mr. David McDermont, Managing Director, International Governance Solutions
The presentation demonstrated how to put together an effective strategic plan for the successful implementation of electronic government procurement. Mr. McDermont stated that a good strategic plan is needed to:
• • • • •
Manage complexity and multiple stakeholder involvement Reduce risks of unsustainable or stalled approaches Link e-GP planning with other e-planning Phase in and integrate the components of the plan Link vision to the driving components
The key assumptions to consider include:
• • • 24
Planning for e-GP is a transition from current approaches to technology assisted approaches Many components other than the application of technology are involved Complexity and resource requirements mean a phased implementation is the most likely to succeed
Electronic government procurement strategic planning
The key steps for preparing a strategic plan are: 1. 2. 3. 4. 5. 6.
Set vision and goals Carry out assessment and scoping study Consider key components to be addressed and plan management Establish strategic planning framework Develop action plans and assignment of responsibilities Apply implementation and change strategy
A vision is the starting point for a good strategic plan. The vision will be driven by how well the key components or drivers below are implemented:
• • • • •
Institutional capacity – government leadership and management of human resources Governance components – policy planning and management, legislation and regulation Business functionality components – systems, standards Infrastructure and web services Private sector integration
Key issues to consider in implementation are:
• • • • • • •
Must know where you are going (e-GP readiness and strategic framework) Many different ways of implementing within this framework What scope of implementation can you resource? Who will champion e-GP? Combining management and technology What stakeholders/private sector involvement? Where to start?
Next, Mr. McDermont discussed phasing options. First, it is critical to address the existing situation including legislation, policy, management, regulation and education. Second, it is important to determine just how much infrastructure is necessary. While nation-wide Internet penetration might be low, the penetration rate might be high within the business sector so that small pilot implementations of systems can be achieved. There are a number of business models for acquiring a system. A system could be built from scratch using a public/private sector partnership or could be acquired by accessing a successful proven system from another country. Whatever the approach, piloting a system is a very effective means towards implementing a successful system in that it reduces the risk of failure and allows time for countries to evaluate all the components that have to be in place to support a sustainable and effective system.
25
Procurement transformation: the role of open standards in e-procurement
Lastly, strategic planning must include evaluation. Aspects to measure in the evaluation are:
• • • • •
Improved efficiency of government/suppliers More effective outcomes for community (value, purpose) Wider supplier participation in the government procurement market (impact and acceptance) Improved confidence in government management of procurement (transparency, consistency, integrity) International access to e-commerce
K.
Procurement transformation: the role of open standards in e-procurement Mr. Stephen Braim, Government Programs Executive, Asia Pacific IBM Korea The aim of the presentation by Mr. Braim of IBM was to highlight the role of open standards in e-procurement. The transformation to eprocurement for IBM, a corporation which operates in 130 countries worldwide, resulted in over US$ 6 billion in cost savings. The value of e-procurement derives from people, processes and technologies that secure goods and services in support of internal partners in the development and delivery of products and offerings. The resulting benefits from this activity include cost reduction; improved internal partner and customer satisfaction from improvements in supply continuity; quality and value of goods and services received; and optimized cash flow. An e-procurement plan needs to take into account numerous issues. First one is to decide whether to set up single agency procurement or multi-agency procurement and payment. For multi-agency procurement and interagency integration, interoperability must break down silos between agencies. A second issue or question worth considering is lowest cost procurement versus value procurement. Other common issues and important components to e-procurement are: fairness to suppliers; best of breed demonstration to private sector; increase procurement leverage; drive cost savings for industry and government; transparent procurement and corruption minimization; transformation; supplier relationship; transform strategic sourcing process; and best of breed procurement terms and conditions. Most importantly, e-procurement is about adapting to the needs of the market and the government.
26
Open standards enable the collaboration and integration needed to drive on-demand government and business. An on-demand government or business is an enterprise whose business processes are integrated across the company and with key partners, suppliers and customers and thus can
Procurement transformation: the role of open standards in e-procurement
respond with flexibility and speed to customer demand, market opportunity or external threat. Open standards are: published without restriction; freely available for adoption by the industry; controlled by an open industry organization; and implemented by offerings available in the market. Open standards and open sources enable open computing and interoperability. Open computing permits interoperability by using published specifications for API’s protocols, data and file formats. These specifications must be published without restrictions that limit implementations. The role and significance of open standards were recognized at the Asia Pacific Economic Cooperation (APEC) Ministerial meeting on communications and Information Industry in June 2005. However, open standards are not yet the norm in most governments. On the other hand, the private sector is adopting open standards that simplify rules and drive innovation. All government e-procurement systems will interact with various private sector systems, thus governments must adopt open standards if an effective e-procurement system is to be established. Open standards are based on open architecture, a service-oriented architecture (SOA) that underpins e-government programmes. SOA enables flexible connectivity of applications or resources by representing every application or resource as a service with a standard interface and enabling them to exchange structured information. Developing and instituting open standards most often begins with a need such as a lack of operability or need to provide a customer with a technical solution (figure 3). In response to this need, initiatives are undertaken by a core group which agrees to develop specific technical procedures to solve the initial need or problem. Once these specifications have been adopted and approved, and made available to the public, a standards body can review these specifications and standardize these solutions across multiple vendors. IBM has been working in the area of open standards since 1998. Based on this experience IBM has formulated specific recommendations to assist governments with open standardization, these are: 1. 2. 3. 4. 5. 6.
Insist on open standards as a matter of procurement policy- be pragmatic about it Focus on interoperable ICT systems Avoid procurement of proprietary, non-open standards based solutions for e-procurement Evaluate open source solutions on equal footing with commercial solutions Reject mandates or preferences based on development model Insist on open file formats
27
Legal aspects of e-procurement
Figure 3. 7. 8.
Evolution to open standards
Investigate SOA based open architectures Adopt open computing as an underlying philosophy
In the discussion session, Mr. Braim explained that IBM is involved in promoting open standardization at the Organisation for Economic Cooperation and Development (OECD) level and APEC level. A participant asked if the only option is to adopt an open system, or if it is still possible to use proprietary legacy systems. Mr. Braim suggested that governments prepare their system to adapt and interoperate in the future. L. Legal aspects of e-procurement Dr. Roland Amoussou-Guenou, Embassy of France in Thailand, Visiting Lecturer, Asian Institute of Technology, Thailand Mr. Amoussou-Guenou gave an overview of legal issues raised by eGP, examined legal sources of e-GP, and presented examples of e-GP best legal practices in Europe and Asia. Overview of legal issues and definitions raised by electronic government procurement
28
From a practical perspective, e-GP is simply a transformation from a paper-based buying process of public entities to an Internet based process. Thus, the essence or content of buying is not altered. However, from a
Legal aspects of e-procurement
legal perspective, the usage of an electronic means raises the issue of legal validity for all transactions related to e-procurement. The legal issues raised by e-procurement are quite complex and therefore require definition and clarification of certain key concepts. The working group on e-GP formed under the harmonization initiative of Multilateral Development Bank (MDB) and International Financial Institutions (IFI) defines e-GP as the use of information and communication technology (especially the Internet) by government in concluding their procurement relationships with suppliers for the acquisition of goods, works and consultancy services by the public sector. The United Nations Commission on International Trade Law (UNCITRAL) adopted the UNCITRAL Model Law on e-commerce in 1996. In the absence of a specific international legal instrument on eprocurement, understanding this concept under the UNCITRAL schemes requires a combination of the UNCITRAL Model Law on procurement and the UNCITRAL Model Law on e-commerce. According to the UNCITRAL Model Law on Procurement, procurement means the acquisition by any means, including by purchase, rental, lease or hire-purchase, of goods or of construction, including services incidental to the supply of the goods or to the construction if the value of those incidental services does not exceed that of the goods or construction themselves. Article 1 of the UNCITRAL Model Law (sphere of application) provides that the law applies to any kind of information in the form of a data message used in the context of commercial activities. The provisions of the Model Law on e-commerce should also apply to procurement, understood as “commercial”, in its “contractual” and “transactional” aspects conducted by a public entity, when using electronic means. International legal sources of electronic government procurement The first step for a legal framework of e-GP is the adoption of provisions recognizing the legal validity and effect of data message in various circumstances. Chapter II of the UNCITRAL Model law sets forth the legal recognition of data messages and admissibility and evidential weight of data messages. After the legal validity of data messages, the communication of these data messages in various transactional circumstances should be recognized. Chapter III of the UNCITRAL Model law covers the communication issues: attribution of data messages; recognition by parties of data messages; time and place of dispatch and receipt; and acknowledgement of receipt. Online dispute resolution must also be legally recognized. Most countries of the Asian Pacific region do not have an online dispute resolution mechanism. Presently only the Philippines has enacted an alternative dispute resolution Act.
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Legal aspects of e-procurement
The UNCITRAL Model Law covers “electronic commerce in specific areas” such as “carriage of goods” and “transport documents” (Part Two – Sections 16 and 17), however, e-GP is not specifically considered. In order to identify e-GP legal issues that take into account the specificity of “procurement”, it is necessary to recall the governing principles on government procurement, before breaking down the standard procedures for public bidding. The governing principles on government procurement are: transparency, competitiveness, streamlined procurement process; system of accountability; and public monitoring. A specific legal framework must cover and specify each step of the procedures for public bidding. Selected examples of e-GP best legal practices At the regional level, the European Union adopted in 2004 an action plan for the implementation of a new legal framework for e-GP. This plan is part of the European Union legislative packages applicable to e-procurement, which are:
30
•
Directive 2004/18/EC of 31 March 2004 on the coordination of public procurement proceedings for the purchase of works, and supply of services
•
Directive 2004/18/EC of 31 March 2004 on coordination of public procurement proceedings for the purchase of works and supply of services in the sectors of water, energy, transportation and postal services
•
Directive 1999/93/EC of 13 December 1999 on electronic signature
•
“e-Commerce Directive”, Directive 2000/31/EC of 8 June 2000
At the national level, France has taken significant steps towards formulation and enactment of legislation on e-procurement. The French eGP system is very recent. It was launched in November 2004 and effective in January 2005. The platform is an optional, public-private solution that allows public entities to publish call for tenders online and receive electronic bids. The domestic legal infrastructure for e-GP in France is composed of three legal layers. One is related to e-government procurement, the second one refers to electronic signature, and the third one is put in “other rules and regulation” category. The dematerialization of public procurement proceedings in France was introduced by Article 56 of the Code of Public Procurement (Code des Marchés Publiques – CMP) annexed to Decree n 2004-15 of 7 January 2004 on Public Procurement. According to this law, the publication of a call for bids is mandatory for all goods and service contracts above EUR 150,000 for central governments bodies and EUR
Legal aspects of e-procurement
230,000 for local authorities, and for all public works and construction contracts which value exceeds EUR 230,000. In spite of an already very complex legal environment, law and policy makers in France including different stakeholders believe that available laws are not enough to guarantee security and confidentiality of e-GP. Thus many other laws and regulations are to be adopted, including a “Law on Simplification of the Law”. Contrary to its European counterpart, the Asian region has not yet adopted a specific e-procurement regional policy or legal framework. Nevertheless, elements for legal validity of e-procurement can already be found in the “e-ASEAN Reference Framework for Electronic Commerce Legal Infrastructure”. However this instrument is not compulsory, but serves only as a guideline. At the national level, many Asian countries such as China, Malaysia, Philippines and the Republic of Korea, have undertaken massive reform of their public procurement legal environment as part of their national e-government action plan. In conclusion, Mr. Amoussou-Guenou listed five major factors for implementing e-GP, which are:
• •
Strong leadership
• • •
Pre-requisite of a minimum level of ICT infrastructure
Sustainability of e-GP as part of nation-wide e-government reforms Comprehensive process reengineering before computerization Transformation of rigid and inefficient bureaucracies into more efficient and responsive organizations
In the plenary, a participant asked whether an electronic courtroom/ online dispute resolution would be used for arbitration or mediation and which entity would oversee it. Mr. Amoussou-Guenou explained that in an electronic courtroom/online dispute resolution, a third party acts as a mediator or conciliator, but the outcome of the proceeding is not compulsory, instead it is an agreement or contractual solution. If it is arbitration, however, it is different than mediation because the outcome of the proceeding must be enforced and arbitration awards must be recognized. He added that the service provider is the entity in charge of overseeing the online despite resolution/virtual courtroom, not the government. In response to a question on internationally recognized legislation, Mr. Amoussou-Guenou said that the MDBs are pursuing the formation of a legal framework, however, only the United Nations can enforce an e-procurement or e-commerce law. He added that currently, e-government procurement is a national jurisdiction issue that becomes complex and confusing when foreign goods and services
31
Buyer-supplier activation
are being procured. M. Buyer-supplier activation Mr. David McDermont, Managing Director, International Governance Solutions The presentation indicated that suppliers as well as buyers must be encouraged to actively participate in the e-procurement system. A strategy to activate the role of buyers and suppliers should cover three areas: orientation, key implementation issues, and ongoing support. Orientation means understanding the challenges to be faced, the realities of what the potential systems can deliver, and how many suppliers and buyers are involved. Resistance from businesses and institutions is likely to be encountered. Governments must ensure that they can establish an electronic procurement market that is viable and accessible. Possible challenges and hurdles in promoting the e-GP system are:
• • • • • • • • • •
Government requirements not understood Perceived threat to job security Thousands of suppliers and buyers Selling the benefits to skeptical suppliers Different systems, different approaches Need to form a viable market Government leadership will be provided and will carry through Perceived competitive threat to small and remote business Low awareness and skills with technology Limited resources in government and business
The benefits of engaging in the e-procurement marketplace must be made immediately apparent to buyers and suppliers. It is important to demonstrate that the system will be better, cheaper and fairer. There are a variety of mediums to communicate the benefits such as trial usage/dummy systems; business press, information desks; or business and community forums. The benefits that must be highlighted and clearly communicated to the suppliers are:
32
• • • • • • •
One system/one portal Automated, faster, cheaper, and more transparent processing Targeted information/bid tracking Automated online payments Elimination of expensive paper catalogues Reduced error rates Better market information/better decision making
Case study: e-procurement in India
• • • •
Wider/easier access to market and information Consistent, accessible, fair process Improved audit provisions Less opportunity for corruption
The first key implementation issue to be addressed is the perceptions of people. People will be concerned with access to information and to the system; government procurement policies; supplier selection criteria; buyer job and career structure; and the change management strategy to be applied. General systems issues such as access to marketing information and documents standardization, among others, will also need to be addressed. E-purchasing systems in particular, will also present many issues such as questions about online requisition because it will be a new experience for people. Catalog development should involve consistent language, item descriptions, and updating mechanisms and be compatible with government system standards. A leading business issue will be how to maintain and encourage the participation of SMEs. Pricing discounts, subcontracting, guaranteeing of some contracts might be used as measures to ensure the participation of SMEs. Additional issues for business include the establishment of business support services such as Electronic Trading Associations (TAs) to develop catalogues and acceptable supplier charging policies if they are used. Suppliers with low access to systems need to be provided with a range of public access points and have access to parallel technologies and processes that improve transmission speeds and capacity. The Government needs to make the benefits of taking part in the electronic market evident and take measures to grow the market using strategies such as matching government demand and supplier capacity; analyzing and resolving bottlenecks and problems in the market; providing comprehensive market information; and improving the clarity and consistency of bid documents, among others. In conclusion, Mr. McDermont briefly summarized the importance of ongoing support for buyer and supplier development. This included developing government capacity to manage procurement and training of government buyers and suppliers. N. Case study: e-procurement in India Mr. Ramanathan Somasundaram, Project Manager, e-Procurement, National Institute for Smart Government The presentation by Mr. Somasundaram provided a case study of the experience of Andra Pradesh in e-procurement. The state of Andra Pradesh launched the e-procurement initiative in 2001 at a time when the 33
Case study: e-procurement in India
infrastructure was severely limited and very few computers existed in the government offices. Thus, Andra Pradesh serves as a valuable model for developing regions because it demonstrates that it is possible to establish an e-procurement system in spite of limited financial resources and IT infrastructure. The procurement system implemented in Andra Pradesh was based on a public private partnership. At the time of the initiative, the state of Andra Pradesh was headed by a chief minister who firmly believed in modernization through adoption and development of ICT, and was enthusiastic about launching an e-procurement system in partnership with private enterprises. The paper-based procurement system was inefficient and severe challenges had to be overcome such as physical obstruction and intimidation of suppliers at the bidding site or corruption and destruction of bids. Commerce One India (C1 India) was selected as it agreed to profit a low rate of 0.04 per cent for each transaction fee paid by vendors for using the system. The agreement was that the private partner, C1 India, provided software, hardware, licenses and financial support while the state was not to spend any funding on the development of the system. C1 India acted as the application service provider and was responsible for administration, operation, and maintenance of the complete e-procurement marketplace. The new electronic system was successfully developed and implemented due to the active support of the government, and the hardworking efforts of Commerce One India. As of March 2005, the volume of transaction was US$ 8.0 billion. E-bidding has streamlined decision making procedures, increased work efficiency, and significantly reduced the time required for transfer of files. Recently, the system was PKI-enabled to provide digital certificates. In addition to strong leadership, a key success factor was the training conducted by C1 India for government officers and suppliers in the use of ICT and e-procurement. Now, the leading issue for the Government of Andra Pradesh is how to exit the private partnership even though the private partner is working very successfully. An additional issue is the need for standardization to eliminate variations in procurement procedures between different government departments. The third issue is the need to integrate the system with certification authorities. There is only one certification authority at the moment and it can issue certifications solely in the state of Andra Pradesh. The fourth issue which needs to be addressed is the lack of legislation governing e-procurement activities. The next steps include organizing the structure of the e-procurement agency and centralizing supplier registration. 34
National e-procurement service experience
In the discussion session, a participant asked if the organizational structure for implementation and the supplier registration would be separate entities. Mr. Somasundaram replied that the issuance of digital certificates and supplier registration should be one organization. The issue of multiple certificate authorities and ways to centralize the procurement system was also discussed. Mr. Somasundaram was asked how a successful and trusting relationship was created between suppliers and buyers despite lack of legislation. Mr. Somasundaram said that the trust between domestic suppliers and the government was formed because the suppliers were involved very early on at the conception of the project, and that representatives from suppliers associations attended meetings and training sessions. In addition, the charisma and enthusiastic efforts of government leaders and the private sector made the project a success. O. National e-procurement service experience Mr. Seong-jun Won, Principal Consultant, Samsung SDS The presentation by Mr. Seong-jun Won introduced the system architecture, contents and implementation methods of the GePS for the Public Procurement Service of the Republic of Korea. The Korean government built a government e-procurement system in order to handle all public procurement online for all public organizations. GePS is an Internet-based procurement system where all documents and procedures are processed electronically so that suppliers do not need to visit a public organization to participate in bidding. The system was built in only 8 months. Currently, 30,000 public organizations and 80,000 companies use this system. System Architecture The system architecture of GePS can be divided into three parts (figure 4). First, the e-procurement application service provider (ASP) handles e-procurement activities between public organizations and suppliers. Second, the connection with relevant organizations; and third the product catalog information to support e-procurement. On the left hand side of figure 4 are the public organizations and suppliers which are the principal users of GePS. On the bottom right hand side of the figure are relevant organizations which provide procurement information online. For example, insurance companies provide XML-formatted bond electronically. Contents of GePS GePS is linked to 53 external systems through the Internet. As an extensive system, it can share information necessary for procurement with government organizations, relevant groups and associations. Users of GePS enjoy one-stop services handling all their needs. Via the interface with six authorized certification agencies, certified electronic signatures can be used
35
National e-procurement service experience
National e-Procurement Service Experience
e-Procurement Portal
Supplier Unit
Use
Public Organizations (Buyers)
ASP
supporting contract
service
system
User registration
E-Guarantee
Supplier’s Performance
E-Payment
Integrated notice
Goods classification system
system
e-Procurement
PPS Operation
2. System Architecture of GePs
Contracted products catalogue
Certification Related agencies Linkage
Commercial products catalogue
Documents distribution and outside linkage
Private Business (Suppliers)
Linkage
Surety insurance
Ministry of Finance and Economy
Construction CALS
Ministry of Government Administration and Home affairs Construction related Associations Korea Financial Telecommunications & Clearings Institute
Figure 4. System architecture of GePS to secure safe online transactions. In addition, the Government for Citizen System called G4C allows businesses to submit business licenses and receipts of municipal and national taxes. GepS is linked to 6 construction related organizations and share various information on suppliers such as their management status and performance. A total of 11 guarantee agencies process guarantee certificates regarding prepayment, bidding, contract signing and warranty. A connection to 17 major commercial banks means that GePS can process real-time electronic payments. GepS has combined information protection technology and a new ecommerce programme. GepS uses electronic documents which are created on the World Wide Web Consortium-recommend XML schema and the core components of ebXML. For message exchanges, GePS complies with international standards such as Simple Object Access Protocol (SOAP) and ebXML Message Service, ebXML transmission standard from a broad perspective (EBMS). In order to maintain tight security, GePS is applied with the latest PKI and digital authentication technology by authorized certification agencies. When electronic documents are exchanged between suppliers and consumers, digital electronic signature is used. In addition, GePS provides the time-stamp service and individual identity document (ID) confirmation service. As of December 2002, 92 per cent of domestic biddings were conducted online. 36
The GePS shopping mall is divided into two parts: the contract commodity mall and the market place shopping mall. On the contract
National e-procurement service experience
National e-Procurement Service Experience
5. Implementation Method (2/8)
5.1 3-tier Architecture
Web Server
Web Server iPlanet Web Server
Web Server iPlanet Web Server
Sun V880
Sun V880
G2B Portal * 2
Application Server
Web Server iPlanet Web Server
S
Servers are grouped into three layers, including web server, application server and DB server.
S
Each layer has multiple nodes.
S
Layers are separated from each other, so performance of a layer doesn’t affect that of other layers. Because of this structure, when errors occur, their impact is limited to the concerned layer only.
Sun E6500
Portal APP
e-Procurement * 3 e-Procurement Handling APP
e-Bidding APP
WebLogic WAS
WebLogic WAS
WebLogic WAS
HP RP8400
HP RP8400
HP RP8400
e-Bidding * 2
DB Server Procurement DB
G2B DB e-Bidding DB
Figure 5. 3-tier architecture of GePS commodity mall you can purchase goods at the unit prices which are determined by contracts signed with the PPS. On the market place shopping mall, all suppliers are free to register their products for sale. Information on 420,000 standardized commodities and 80,000 suppliers is available on the website, and all information is safely managed using electronic signatures and the nationally certified encryption system. GePS is based on a 3-tier architecture (figure 5). Web servers are installed at the front end, and separated from application and DB servers by firewall so that the key systems such as application and servers can be protected from external attacks. Main servers are multiplexed so that they are inoculated from individual server errors. The structure of the system ensures fault-free stability, smooth operation efficient infra-utilization, and tight security. When errors strike one layer they are only locked within that layer preventing them from spreading to other layers. Another method adopted to optimize the system performance is load distribution. The system has two layer 4 (L4) switches to distribute workloads and brace for potential system errors. Such hardware-level load distribution ensures more system stability and higher performance compared with software-level load distribution. Several methods are used to maintain stability. First, the L4 switch was connected with multiple web servers and application servers. When one of the web servers develops an error it does not impact service delivery. Second, a fault-tolerance system was created
37
E-catalogs and product information management
by adding one more server to the existing DB server and forming a cluster. Third, multiple backbone switches were utilized including L4 switches, layer 2 (L2) switches and firewalls. The fourth and final component used to secure the system stability was data backup. Online back up uses the shadow image software and physical backup in the form of magnetic tapes. In order to assure the security of the network, the internal network was separated from the external network. The Intrusion Detection System was installed to detect security threats in real time and a firewall prevents illegal intrusions into the system. Samsung’s SDS unique project management methodology called einnovator enabled to the GePS project to be completed within 8 months. The system was built in four stages including analysis, design, development and implementation. Samsung’s SDS quality control experts stayed at the project site providing full support at every step. In plenary, Mr. Seong-jun Won confirmed that the infrastructure for GePS was located at PPS. He said the cost of developing the system was approximately US$ 60 million. In response to a question on the data administration, he said that PPS is in charge of data administration, not Samsung SDS. He explained that commercial software rather than open source was used in the system architecture to ensure stability and performance. P. E-catalogs and product information management Mr. Sang-Goo Lee, Director, Center for e-Business Technology, Seoul National University The presentation by Mr. Sang-Goo Lee focused on the need to classify product information. View of product information management The product is a basic and essential component of a business transaction. Managing contents and product information is a difficult task. Recently, the industry has recognized that product information management (PIM) control the flow and distribution of product information in a consolidated and synchronized manner (figure 6). In the PIM lifecycle, suppliers load their product information from multiple sources and in various formats. It requires difficult and laborious work in order to cleanse this data, reclassify the product information and publish it into the database.
38
Various standards are related to product information including classification standards and identification standards. Classification is a taxonomy of product class groups. Classification taxonomies are used in data modeling; statistical analysis; alignment and synchronization; and support other specific operations of the enterprise. A leading challenge for classification is that each
E-catalogs and product information management
PIM Lifecycle Search: keyword
Taxonomy multiple sources & formats
Import
(Re-) Classify
Cleanse
Augment
Multiple Participants and players
Search: taxonomy
Publish
Search: combined Discard info. on outdated products
Figure 6. Product information management
classification is just one single view of the product and there is no single classification scheme. The other challenge is that there are too many catalog standards without an agreed sound model for product information. Product ontology Ontology is a specification of concepts and relationship between concepts. Ontology is important in computing because IT information sharing and finding is currently based on keywords because computers do not understand concepts in the web document. Therefore the leading problem is the lack of semantics. By giving the computer better access to the semantics of information, we can improve information sharing. Ontology is the first step in this process. For product information, much of the efforts in e-catalog construction must be aimed at building a model of product information, which means deciding which attributes must be represented for each product group. Currently, two large projects in the Republic of Korea, are undertaking this task. In the business-to-business (B2B) pilot project of the Republic of Korea, 40 industry sectors are trying to standardize and consolidate contents globally. The PPS needs to build ontology and comprehensive glossary to enable sharable reference on product information. Mr. Sang-Goo Lee presented the current framework for content consolidation and standardization in the Republic of Korea. The objectives are to construct new catalog databases; enable synchronization and autoclassifications; and standardize the product information. Currently, there are 500,000 product items in the PPS database and the ontology search system enables navigation of approximately 10 million links. Thus the ontology search has proved to be useful. There is a three year plan to develop the
39
Conducive environments for e-procurement: examples and best practices
ontology system including an auto-classification engine; product information portal; and full integration with the current government-to-business (G2B) system. In conclusion, Mr. Sang-Goo Lee said that we need a better way to deal with taxonomy, that is, we need a more organized and structured model for classification standards including more semantics. In the discussion session, Mr. Sang-Goo Lee was asked which agency took on the responsibility of product information issues. Mr. Sang-Goo Lee said the Ministry of Commerce and PPS were together occupied with these issues and PPS funded the first project to deal with product information classification. In response to a question on future directions, Mr. Sang-Goo Lee said that they are promoting better United Nations Standard Products and Services Code (UNPSC) standards that include more detailed attribute information for each product class. Q.
Conducive environments for e-procurement: examples and best practices Mr. Jonathan Kushner, Global Strategic Accounts Executive, Public Sector, Asia Pacific, Multilaterals and Bilaterals, Microsoft Operations Pte. Ltd. The presentation by Mr. Kushner aimed to provide a background on e-procurement policies around the world. The approach to e-procurement legislation in the European Union has been a formal directive mandating the Council and Parliament to carry out significant parts of public procurement electronically. In line with the European Union’s directive, national governments in Europe have set their eprocurement priorities in motion. APEC, on the other hand, has not issued a formal directive, but instead has focused on capacity building and sharing best practices. In August 2003, a report set out goals for e-procurement implementation strategies with practical recommendations. The report highlights the need to provide an SME platform for competitiveness and growth. In the United States of America, e-procurement has been recognized as an integral part of e-government. The e-procurement initiatives aim to create a secure business environment to facilitate and support cost-effective acquisition of goods and services. The most recent and successful programmes implemented are:
• • 40
•
FedBizOpps – mandatory single entry point for solicitations and contract awards over US$ 25,000 Federal Procurement Data System – captures over 25 data points on contractors and contract activity Central Contractor Registration – required electronic database
Conducive environments for e-procurement: examples and best practices
• • • • •
for payment Excluded Parties Listing System – government-wide listing of suspended and debarred contractors Online Representations and Certifications Application – electronic forms for socio-economic compliance Electronic Subcontracting Reporting System – reports data on use of small business concerns Wage Determinations Online – provides easy access to federal wage rates Federal Technical Data Solution – online availability of contract technical specifications and data
Across the globe, the key drivers of e-procurement are:
• • •
Cost reduction: reduces price of items and reduces transaction costs Transparency and accountability: bidding processes on an open web platform reduces corruption and bribery and increases accountability of public officials Improving market access: by eliminating geographical distance, eprocurement is expected to enable companies to participate and encourage the participation of SMEs
There are also a number of constraining factors limiting the adoption of e-procurement such as: lack of IT skills; financial constraints; competing priorities within government; security and bid privacy; lack of standards and interoperability with back office systems. Government procurement can be broken down into several discrete processes including:
• • • •
Material planning: refers to activities related to analysis of future needs in terms of quantity and type of items Sourcing: entails sub-processes related to auctioning, negotiating and selecting suppliers Purchasing: refers to selection and ordering of specific goods and services Contract management: aimed at monitoring the executions of contract clauses set during the negotiation sub-process
Electronic procurement systems are really e-commerce solutions that are involved in the actual ordering of products. Therefore, the e-procurement system must include:
• •
Electronic catalogues or marketplaces that encompass functionalities aimed at streamlining purchasing sub-processes, such as online ordering and payment. Electronic tendering solutions that entail functionalities mainly aimed
41
Conducive environments for e-procurement: examples and best practices
at facilitating sourcing sub-processes: publication of call for tender online; online downloadable tender and related administrative forms; online bidding; and online communication of the award. Mr. Kushner presented a case study of ChileCompra. Chile wanted a transparent and non-discriminatory means of business contact between the government and private enterprises. The resulting e-procurement system provides information on purchases and hirings of the public sector, and conducts electronic transactions with businesses. The public purchases correspond to all the contracts that the Government suscribes for the acquisition of goods, services and public works, from the most complex (such as those for the road construction) to simple contracts (purchase of pencils and other office items). Currently, in Chile, the public procurement market is equal to 10 per cent of the GNP and US$ 1.20 million in purchases were reported through the platform in the year 2003. ChileCompra also enables “digital education” because ChileCompra uses local language (Mapuche) thus local suppliers can engage in bidding for local public works and enhance their IT skills in the process. In Belgium, the Belgian Federal Office for ICT (FedICT) was established in 2001 to coordinate e-government modernization of the Belgian Federal Government. The Joint Electronic Public Procurement initiative (JEPP) aimed to create a network of portals for federal tendering. The common portal and the first departmental portal for the Ministry of Defense was launched in November 2002. XML technology ensures ease of integration among different platforms and legacy systems. The second stage is to include automation of workflow and the full digitization of the tendering process, with online bid submission and negotiation In Andhra Pradesh, the largest state in India, the Government needed to replace the paper-based procurement system for handling bids. The state opted to implement a web-based e-procurement solution to cut procurement time and increase competition by facilitating vendor participation. The benefits of this system were: decreased procurement time by 75 per cent and increased in the average number of bidders per procurement; generated savings of US$ 50 million in its first year; automated bid evaluation; and centralized vendor data. The fourth example of a successful e-procurement project is the FedBizOpps of the US government. On 1 January 2002, FedBizOpps became the single, web-enabled government-wide point of entry for federal procurement actions over US$ 25,000. This system supports 22,900 buyers in 101 federal agencies and 500,000 registered vendors by providing services 24 hours, 7 days week, 365 days a year. At no cost to the user, the system allows individual searches and customized e-mails of new listings and retrievals of solicitation documents. 42
In the discussion session, the issue of monitoring savings achieved
Protocols for government procurement of software assets
through price negotiations was discussed. A participant asked how central contract registration was used for payment purposes and linked to a bank facility in the United States of America. Mr. Kushner said they probably used web services from existing inter bank payment services. Mr. Kushner was asked to recommend measures to establish a conducive legal framework. Mr. Kushner recommended that an appropriate policy framework be established through a formal directive or generated consensus within the government. R.
Protocols for government procurement of software assets Mr. Robert D. Kramer,Vice President of Public Policy, Computing Technology Industry Association (CompTIA)
The presentation by Mr. Kramer presented five protocols for government procurement of software. The Initiative for Software Choice (ISC), a global coalition of more than 300 large and small ICT companies, and 15 national ICT trade associations, sought to develop a set of protocols for procurement of software. The ISC, which is managed by the Computing Technology Industry Association (CompTIA), is organized around four core principles:
• • • •
Procure IT on its merits, not through categorical preferences Promote the broad availability of government funded research and development Promote interoperability through platform-neutral standards Maintain a choice of strong intellectual property protections
The members of this initiative believe that governments should not express preference for certain software or for open source verse proprietary software. Instead, governments should provide information about different software options so that the development of e-government programmes is more efficient. CompTIA asked a private consulting firm, Nathan and Associates, to study and investigate three issues: best practices in e-procurement; policies that comply with trade agreement; and how procurement impacts intellectual property. Secondly, CompTIA asked the consulting firm to determine the most economical procurement process. The result of the study yielded a list of five protocols: 1. 2. 3. 4.
Choice is paramount for sound software investment decisions Choice among competing software assets should be based on economic considerations Governments must ensure full transparency in the procurement of their software assets Government procurement must be consistent with international trade norms
43
Protocols for government procurement of software assets
5.
Government procurement must respect international norms governing intellectual property
Choice is paramount because effective competition is a prerequisite for an effective and diversified software market. Competition drives producers to be efficient, innovate and provide what consumers want and are willing to pay for. Increasing competition in the software sector directly benefits government contract bidding. Therefore, the optimal government procurement policy should move the public sector to emulate the private sector market by maximizing choice. Policies that create preferences for a specific licensing or development model will impose undue hardship on small and medium sized IT businesses. A policy that excludes commercial software assets from consideration will, in effect exclude 85 per cent of IT channel business activity. It is recommended to choose software based on economic consideration and systematic decision-making process such as cost-benefit analysis. Governments should invest in software assets that offer the highest value irrespective of technology. In order to yield maximum benefits, procurement must be fully transparent. International transparency rules reflect increasing convergence among governments in requiring predictability and accountability in procurement. Requirements and rules must be very clear and bidders must be fully apprised of the functionality and cost benchmarks for technology tenders. Transparency rewards the “best value” bidder over the “least cost” bidder, and helps avoid renegotiations and unforeseen costs. Procurement must be consistent with international trade norms. International trade rules (World Trade Organization (WTO), Federation of Tax Administrators (FTAs), APEC best practices) cover 77 per cent of world trade. The Agreement on Government Procurement procedures and other bilateral agreements discourage technology transfers (including source code) as a condition for consideration of government tenders. Most importantly, non-discrimination is a major tenet of trade rules. Procurement must respect intellectual property rights. Intellectual property regimes facilitate foreign direct investment and promote technological development through technology transfer. Operations support systems (OSS) and commercial software models depend upon intellectual property rights, thus it is critical that these rights be guaranteed. In conclusion, Mr. Kramer said that ICT procurement policies that limit the available market for ICT solutions subvert sound internationally recognized economic, trade and interlectual property rights (IPR) principles. The protocols developed and advocated by CompTIA guide governments to choose ICT solutions based on merit, value, transparency, non-discrimination 44
Cubic model of selecting countries and areas for technical advisory services of e-government related systems
II. A Cubic Model
e-Government Readiness Level
1. Model Concept
High Low
Low High Low Needs
Expected
Results
High Assessment (Level)
Figure 7. Cubic model and respect for intellectual property. Merit based policies best serve local citizens and stimulate growth of local economies. In the discussion session, open standards and open source were discussed. S. Cubic model of selecting countries and areas for technical advisory services of e-government related systems Mr. Suke Kyu Lee, Assistant Professor of Marketing, Sung Kyun Kwan University In his introduction, Mr. Suke Kyu Lee said that the main issues for successful e-procurement are: IT policy, technical level, and communication/ public relations of e-procurement performances. Each country of interest, international organizations (usually multilateral banks) and donor countries are all involved in the development of e-procurement projects, thus it might be challenging to meet the needs and demands of each party involved. Cubic model: concept and components A cubic model is used to represent the e-government readiness level, needs assessment, and expected results (figure 7). As a value oriented model, the cubic model represents the fund providers’ concerns with two components: the e-government readiness of a country in South-East Asia; and level of transparency and corruption. In addition, each country may not be happy even if her country is supported by financial and technology services from international organizations because of difference in the field of interest and low level of capability of planning and implementation of egovernment activities. Therefore the cubic model tries to determine which country and which area would be selected for supports from donors. 45
PKI-based secure e-procurement
Needs survey: survey and findings The objective of the needs assessment is to identify the current situation and the needs for technical advisory service. Needs assessment is conducted in three steps: Step 1:
Measuring e-government readiness
Step 2:
Defining key issues of e-government
Step 3:
Recommending guidelines for e-government
A needs assessment identifies the current situation and the degree of service required in each of the following areas: government leadership; human resource management; planning and management; policy legislation and regulation; standards; private sector integration; and systems. The fields of interest for consultation services are: 1.
GePS: Government e-Procurement System
2.
NAFIS: National Finance Information System
3.
TIS: Tax Integrated System
4.
Informatization in Local Governments (Cites and Districts)
5. 6. 7. 8. 9. 10. 11.
NEIS: National Education Information System Computerization of Customs Administration GIS: Geographic Information System EDIS: Electronic Document Interchange System Resident Registration Management System Patent Administration System ICJIS: Integrated Criminal Justice and Information System
In conclusion, Mr. Suke Kyu Lee said that selecting countries and areas for technical advisory services based on needs assessment aims to achieve the following:
• • • •
Setup criteria based on end-customer value Suggest practical ways of capabilities in e-government Help each country figure out a roadmap to e-government Increase understanding and partnership T. PKI-based secure e-procurement Mr. Chris Min Jang, Team Leader of Business, Korea Information Certificate Agency
46
The presentation by Mr. Chris Min Jang described e-commerce in the Republic of Korea, digital signatures, and secure e-procurement using PKI.
PKI-based secure e-procurement
PKI Solution to Hacking attempts Is serious Hacking Attempts? Problem Difficult
to
verify
identity
Easy to make forgery or modification on contents Repudiate Breach
transactions information
Figure 8.
Matched Security method
Protection Technology
Authentication of identity
Digital Signature Technology (User authentication)
Guarantee Integrity
Digital Signature Technology (Message authentication)
Non-repudiation
Digital Signature Technology (Message authentication)
Confidentiality
Encryption Technology (Message authentication)
PKI solution to hacking attempts
In the Republic of Korea 76 per cent of households are broadband users; 75 per cent of the total population are mobile users; and 20 per cent have licensed CA’s certificates. Approximately 20 million people use online banking, and online stock trading accounts for 70 per cent of all transactions. The size of the e-market in the Republic of Korea is rapidly increasing. In 2003 the e-market accounted for 16.8 per cent of the total trading volume. Despite the benefits, e-commerce also poses complex security issues. One leading problem encountered by users of e-commerce is the lack of face-to-face contact, which makes it difficult to verify the person who issues transactions. A second issue is that it is difficult to secure transmitted contents and easy to make forge documents. A third problem is cyber stealing. In order to manage and minimize security breaches, public key infrastructure (PKI) technology is employed. The secure PKI system employs a firewall as the first line of defense; intrusion detection system as the second line of defense; application server protection as the third defense; and data protection as the fourth defense. In a PKI system, each possible problem or hacking attempt is prevented with a corresponding security method. Each security method relies on a specific PKI solution (figure 8). PKI uses an asymmetric system or public key system to identify the user’s digital signature which is more secure than the symmetric key system. A digital signature is a unique digital data applied to a document keeping the information of the signer private. A licensed certificate authority guarantees a public key’s safety. The CA provides a service to distribute certificates and verify certificates securely. A digital signature makes it possible to verify the authenticity of the document and can detect whether modifications were made. The functions of a digital signature are:
47
Introducing e-government in the Republic of Korea
• • • •
Entity authentication-proved with a certificate issued from CA Integrity-compares the value of the original and decoded digital signature Non-repudiation-client cannot repudiate because he signed the document with his private key Confidentiality-keeps it secure on the network since it uses encryption
E-procurement poses another set of issues and questions:
• • • • • • •
What kind of network should be used for procurement? Is the PKI system a fully automatic process? What is an access method (tool) for the service? How can we confirm that the applicant company is a valid company? How can we enforce deadlines for online bidding? Where should the checkpoint be applied? What access level should they use internally?
In answer to these issues:
• • • • • •
The network for procurement activities should be the Internet because it is easily accessible by the public The PKI process should be fully automatic, from the procurement side it should be an integrated system without human labor, and for the applicant it should be an accessible computerized environment The access method should be an easy to use web based tool In order to confirm that the applicant company is valid, an online certificate should be issued by a trusted third party The deadline for the bidding should be maintained with a time stamping function The checkpoint is at the log in point and the internal user access level should be a personal certificate for each staff
U. Introducing e-government in the Republic of Korea Mr. Seok-Koo Ji, Vice President, Software Business Promotion Group, Korea IT Industry Promotion Agency (KIPA) Mr. Seok-Koo Ji provided an overview of the Republic of Korea’s e-government. 48
Vision and objectives
Introducing e-government in the Republic of Korea
The development of e-government in the Republic of Korea was carried out in three waves. In the first wave, a national basic information system project set out the first ICT plan and 10 year project for the country. In accordance with the first ICT plan, basic IT systems were built in 5 key areas: residence management; real estate management; automobile management; customs clearance; employment management; and economic statistics management. In the second wave of development, a comprehensive plan for the Republic of Korea information infrastructure was formulated. The plan mapped out a strategy to build an information superhighway, and provide broadband services to government and public institutions. The third wave of development, from 1999 to 2002 is known as Cyber Korea. During this period, focus was placed upon the growth of the Internet and related businesses, and the decision was made to use ICT as a strategic tool to overcome economic crisis. In the early stages of development, the Republic of Korea selected three areas for the direction of e-government. The first was government internal process reform which promoted e-documents and service-floworiented procedures. The second was public service reform that aimed to set up online procedures and electronic participation. The third area was information resource management reform which encouraged governmentwide management and common standards for convergence. Through these reforms, the Korean Government aimed to improve transparency, efficiency and participation. The Government believed that such efforts would lead to participatory democracy, balanced social growth, and an improvement in the Republic of Korea’s economic status in North-East Asia. The main driving force of e-government in the Republic of Korea is the Presidential Government Reform Committee. This committee controls and evaluates the overall deployment of e-government with the support of the Ministry of Government and Home Affairs, the Ministry of Information and Communication, and the Ministry of Planning and Budget. KIPA and National Computerization Agency support the committee in policy-making, and technical project developments. KIPA has a number of functions, from facilitating international cooperation to planning and implementation of the Republic of Korea’s ICT policies. KIPA works closely with other organizations as the gateway for international cooperation in the area of informatization. Strategic direction The strategy for the e-government of the Republic of Korea is divided into 4 phases and 5 levels (figure 9). Currently the e-government system is in phase 1. In phase 1, the strategy is to consolidate administrative internal processes and reform public services. In phase 2, it is to advance administrative processes and expand integrated public services by
49
Introducing e-government in the Republic of Korea
2. e-Government Strategy Phase 2 [Service Advancement]
Phase 1 [Foundation] & &
Consolidation of administrative internal process Selective public service reform
& &
Advancement of administrative internal process through information Expansion of integrated public service
Phase 2 (2007) Phase 1 (2005)
Level 4 Transaction
Level 1 Initiation & Provision of limited information
Figure 9.
& Online processing Level 3 Interoperation of civil service Level 2 Development & e-mail & e-payment of taxes & Periodic update and fees & Electronic forms of information
Level 5 Integrated Administration & Interdepartmental and cross-agency Online service & Converged public/ civil service
E-government strategy in the Republic of Korea
using the information gathered from phase 1. By 2007, the Republic of Korea is expected to achieve level 5: integrated administration offering interdepartmental and cross-agency online service and converged civil services. The e-government programme has four areas: Government Internal Process Reform (government-to-government (G2G)); Public Service Reform (G2G); Information Resource Management Reform (common platform); and Legal System Reform. The agenda for each area is as follows:
•
Government Internal Process Reform (G2G) – – –
•
Government Internal Process Reform (G2G) – – –
•
Integration/standardization of information resource Strengthening of information protection system Specialization of the IT manpower and organization
Legal System Reform –
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Enhancement of citizen service Enhancement of business service Expansion of electronic participation
Information Resource Management Reform – – –
•
Establishing electronic procedures Expanding common use of public information Service-oriented Business Processing Re-engineering (BPR)
Consolidation of e-government related legal system
The Republic of Korea has already achieved its goal of being in the
Overview of emerging threats in cyber world
top five on the United Nations’s e-Government Index. In 2004, the Republic of Korea ranked number 5 among 191 United Nations member states, a significant improvement in its global ranking from 13th in 2003. This success can be largely attributed to the following factors:
• • •
Strong Government initiatives such as Cyber Korea 21, e-Korea Vision 2006 and Broadband IT Korea Vision 2007 World class IT infrastructure with world’s highest broadband penetration High investment in research and development
In the plenary session, Mr. Seok-Koo Ji was asked what kind of collaboration is necessary among different sectors such as the construction sector. Mr. Seok-Koo Ji replied that system integration might depend on the political or administrative system of the country. In Japan, for example, where towns are administratively independent from the central government, it is difficult to establish one integrated e-government. In response to a question on the major obstacles to achieve transparency, Mr. Seok-Koo Ji said that transparency is related to culture. A change in culture and thinking requires long periods of time and gradual adaptation. V. Overview of emerging threats in cyber world Mr. Joel Scambray, Senior Director of Security, Microsoft Corporation Mr. Scott A. Warren, Senior Attorney, Internet Safety and Anti-Counterfeiting, Far East Region, Law and Corporate Affairs, Microsoft Co., Ltd. Mr. Scott A. Warren, attorney for Microsoft introduced the presentation by Mr. Scambray on security threats. Mr. Joel Scambray said that it is difficult to acquire information and measurements on cyber crimes. Trends and cyber threats have different consequences for different businesses and customers. Mr. Scambray outlined the current trends in cyber crime, which are:
•
Technology vulnerabilities – – – –
•
Buffer overflow-code to software to take over the system Weak or default configuration Web application hacking such as cross-site scripting, structured query language (SQL) injection New technologies such as voice-over-Internet protocol (VoIP), mobile OS/apps
Distributed attacks – –
Botnets/zombies Distributed Denial of Service (DdoS)-bring down service
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Overview of emerging threats in cyber world
– –
•
of a company Spam Click fraud-advertising
Target the end user – – – – – –
– – –
Bypasses most IT controls via common Internet protocols E-mail attachments/content/links Worms/Viruses Blending, targeting getting worse Spyware uses a computer without authorization Phishing-use of social trickery to convince user to give up personal identification information. US$ 1.8 million victims, US$1.2 billion fraud (Gartner, 2004) Pharming Instant Messaging (IM) Peer to Peer (P2P)
• •
Rootkits-software maliciously installed to control the system.
•
Physical theft or loss of customer data
Insider threats-most surveys list this as the major source of electronic crime/fraud.
Countermeasures undertaken by Microsoft to overcome these cyber threats are: technology, services guidance on safe Internet use, security in the development lifecycle of the machine, IT operational security through prevention detection and response, and public-private partnerships. In the time allotted for questions Mr. Warren explained that the legal aspects of cyber crime are extremely complex and difficult to determine because of the lack of physical evidence. A participant asked if there was any upcoming technology that can help to alleviate cyber crimes. Mr. Scambray replied that the technology is not the issue because security breaches will always be a problem. Some technologies do provide more secure solutions, however, the most important security prevention measure is good risk management.
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PART TWO Summary of Country Reports
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SUMMARY OF COUNTRY REPORTS A.
BANGLADESH
The Government of Bangladesh is actively pursuing the development of ICT and recognizes the benefits of e-government. The national ICT task force headed by the Honorable Prime Minister has placed emphasis on identifying challenges in the implementation of a nation-wide e-governance and initiating pilot projects in various sectors of the government through a project called the Support ICT Task Force (SICT). SICT will be implemented under the Ministry of Planning. In addition, the Government of Bangladesh is receiving substantial foreign financing and technical collaboration for the realization of e-governance. The Government has launched the following e-government programmes: National Trade portal by the Ministry of Commerce; online tendering by the Implementation Monitoring and Evaluation Division (IMED); customized software for budget planning, impact analysis and administrative tasks; electronic budget procedures for the National Board of Revenue (NBR). The Ministry of Communication has organized an online database of information on contractors, tenders and current infrastructure projects. The Bangladesh Planning Commission has most of its information available in a digital library, and communicates using video conferencing and electronic notice board. In the private sector, both Dhakk and the Chittaging stock exchange are highly computerized. In the early 1990's, corporate industries and large businesses introduced local area network (LAN). Currently, some businesses and financial institutions conduct online transactions through a wide area network (WAN). However, Bangladesh's ICT infrastructure is still underdeveloped. The leading challenges to enhancing ICT capabilities and establishing an e-procurement system are: lack of adequate legal framework; limited human resource capacity; preparedness of local software companies; limited supplies of electricity; high-cost and unreliable Internet access. In the future, the Government of Bangladesh is planning to expand capabilities and upgrade technology in office automation systems, statistical analytical systems and public participation systems. The agenda is to build and enhance IT infrastructure nation-wide, and establish a backbone connection among all ministries. Pilot projects for utility services and land management will be carried out. In addition, the Government wants to focus efforts on training programmes for government officials and awareness programmes to educate the public about the benefits and use of e-government.
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Summary of Country Reports
B.
BHUTAN
The Kingdom of the Bhutan is nestled in the eastern Himalayas, and cradled between China to the North and India to the South, East, and West. The Kingdom has a rugged and mountainous terrain, and a land area of about 38,394 square kilometers. Due to its physical setting, the total population of approximately 734,340 is largely rural, and dispersed along the valleys. The majority of the population lives a few hours walk from roads, and some communities are even as distant as a five-day walk. The use of e-procurement for business is very limited and has not yet been implemented within public procurement. However, given the topographical settings of Bhutan, e-procurement has great potential in Bhutan because transportation and communication is difficult due to the vast and rough terrain of the country. The policy and regulatory framework in the field of ICT are carried out by the Ministry of Information and Communication. The Regulatory Authority known as Bhutan Telecommunications Authority (now Bhutan Communication Authority) was established in 2000 pursuant to the Bhutan Telecommunications Act of 1999 and the National Radio Regulations of 1999. It regulates the telecom services, wireless services, radio communications and cable television services in Bhutan. As of now, there is no law on the Internet, e-transaction, ecommerce or for any other cyber issues. The Ministry of Information and Communications has drafted a comprehensive law, entitled "Bhutan Information, Communication and Media Act" to be passed in the next session of the National Assembly. It envisages the legal recognition of e-commerce, esignatures, online privacy, and information security. With the enactment of this Act, it is hoped that many institutions and private firms will engage in e-commerce/business related fields. The Royal Government has prioritized ICT with the establishment of a full- fledged Ministry of Information and Communication and concerted efforts are underway for the clear policy and strategy in the ICT realm. It is also recognized that ICT provides an opportunity to landlocked countries to minimize inherent disadvantages and place such nations at a level playing field with the rest of the world. Therefore, all efforts will be made to create the necessary enabling environment to use ICT as a major tool for business.
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Since e-commerce/business is relatively a new concept in Bhutan, resources and institutional capacity building are essential to fully harmonize the benefits of e-procurement. Bhutan with a stable government and dispute free environment has great potential for development of e-commerce/ business. With the finalization of Bhutan ICT Policy, which provides the guidelines for ICT in Bhutan, a sound ground will be set for e-commerce.
Summary of Country Reports
C.
CAMBODIA
The Royal Government of Cambodia (RGC) has recognized the fundamental importance of long-term development through the adoption of the free market economic structure which was reflected in a series of policy documents such as the 1994 National Programme to Reconstruct and Develop Cambodia (NPRD); the 1995 Implementation of the National Programme to Rehabilitate and Develop Cambodia (INPRD); the Socio Economic Development Plans (SEDPS); and the National Poverty Reduction Strategy (NPRS). Due to limited resources, the initial stages of development in Cambodia placed great emphasis on agriculture, basic education, health care, and basic infrastructure and paid little or no attention to ICT. In 2001, the ratio of telephone lines and mobile phone subscribers per 100 inhabitants was 0.27 or 31,000 wired phones, and 2.00 or 250,000 mobile phones, respectively. The Internet was introduced to Cambodia in the mid 1990's and today there are seven operating Internet service providers (Camnet, Big Pond, Mobitel, Camintel, Camshin, City Link and Open Forum) and more than 20,000 Internet subscribers. The use of ICT in e-commerce and e-government is limited to basic functions such as e-mails. The slow growth in the use of Internet is attributed to the lack of telecommunications infrastructure, technical capacity, resources, IT policy and cyber law, online cash transaction system; and a low IT literacy rate. In order to accelerate the integration of Cambodia into the computer age, the Government is introducing an e-government system with the assistance of the Government of the Republic of Korea. The objectives are: to promote efficient and cost-effective government; to facilitate government services; to allow greater public access to information; and to make government more accountable to citizens. In October 2004, the Government introduced the Government Administration Information System (GAIS) consisting of an Electronic Approval System (EAS) vehicle registration, resident registration and real estate registration. An e-commerce law has been drafted and currently under review by the Ministry of Posts and Telecommunications (MPTC). In the area of procurement, Cambodia is still using paper-based purchasing processes and has no single standardized procurement and financial management manuals for projects financed by international financing institutions and the Government. To improve the efficiency of procurement Cambodia drafted legislations, rules and guidelines under technical assistance of the ADB. Under the 1995 sub-decree, the Department of Public Procurement (DPP) was established as the supervisory and monitoring body for all public procurement. 57
Summary of Country Reports
In late 1996, however, the Ministry of Economy and Finance (MEF) transferred responsibility for monitoring procurement that was financed by international financing institutions (IFI) from DPP to its Department of Investment and Cooperation (DIC), which then created three separate units to handle projects financed by ADB, World Bank and bilateral donors. As procurement has been handled by several agencies and there is growing cooperation between the Government and its development partners, there is a need for overall monitoring of public procurement to ensure consistent standards. In this respect, the Government, together with ADB and World Bank supports the "Rome Declaration on Harmonization" of February 2003 and is committed to the preparation of a manual of Standard Operating Procedures (SOPs) that will include manuals covering both procurement management and financial management. D.
CHINA
China established a government procurement system in 1996. Government procurement increased rapidly, from about 3.1 billion in 1998 to 213.57 billion in 2004, an average annual increase of 88.78 per cent. In 2004, the amount of open bidding was 127.18 billion which was approximately 57.8 per cent of total bidding for the country. The Government procurement system regulates procurement activities, improves the efficiency of financial expenditures, and safeguards the interests of the country and the public. Government procurement is regarded as a measure to limit corruption and encourage efficient administrative operations. After promulgating in April 1999, the National People's Congress reviewed and passed the Government Procurement Law of China in June 2002, which was put into practice formally on 1 January 2003. The enactment of the government procurement law is a milestone indicating the establishment of Chinese government's procurement legal system. The Ministry of Finance is currently in the process of formulating regulations for government procurement. These include: Regulations for Bidding and Tender of Goods and Service, Regulations for Controlling the Information Published, and Regulations on Disposal of the Suppliers' Appeal. These regulations aim to standardize procedures for publishing and release of information.
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The Ministry of Finance has launched several e-government initiatives. A unified website for China Government Procurement (www.ccgp.gov.cn) has been put into place. The website serves primarily as a source of information on policies and regulations; and provides information on tendering, bidding, suppliers and commodities. Bidders can download documents required to place bids. In some regions of China, a more efficient government procurement network management system has been built, providing functions such as information management, project management, data management, and even online bidding.
Summary of Country Reports
Despite these significant advancements, China is not ready for an overall adoption of e-procurement. Leading constraints on the rapid development of an e-procurement system are: lack of awareness on benefits of eprocurement, limited operational integrity of the system, and lack of skilled personnel and expertise. In addition, the legal framework does not prescribe the necessary regulations and policies on e-procurement components. The Government procurement law, the contract law and the bidding law need to be modified. China cannot guarantee the privacy of customers, security of payments and protection of commercial information. Although the infrastructure of China's information technology has developed rapidly, it is not yet able to support a paperless electronic procurement system. The fundamental vision for e-procurement in China is to strengthen research and planning of e-procurement, to build an interactive mechanism between the government procurement reform and e-procurement construction; and to expand e-government procurement step by step. E. INDIA To attain the vision of being a developed nation by the year 2020, the Government of India has initiated reforms in several areas. One of the reform activities undertaken by the Government is a project entitled National E-governance Plan (NEGP) 2003-2007. The implementation of NEGP is estimated to cost about US$ 3 billion. For the NEGP project, the World Bank has offered to contribute a sum of US$ 500 million. In the NEGP, the Government has prioritized the implementation of 25 projects by terming them as mission mode. The mission mode projects are classified under three types, which are: Central Government (8 initiatives); State Government (10 initiatives); and Integrated Services (7 initiatives). E-procurement is identified as one of the seven Integrated Services projects. Since the year 2000, a few State Governmental Organizations and Public Sector Enterprises have self-initiated and implemented e-procurement. The Government of Andhra Pradesh under the leadership of Mr. Chandra Babu Naidu pioneered the implementation of a single, unitary e-procurement system at the State level. The State governments that have implemented eprocurement have partnered with software vendors on a private-publicpartnership (PPP) mode. Northern Railways is another governmental organization that has made progress in implementing e-procurement. Apart from the two, a few Electricity Boards and some Public Works Departments have implemented e-procurement. So far, there is not a coordinated effort to implement e-procurement at the national level. The country has not had an agency to develop and implement policies on public procurement. The Central Vigilance Commission (CVC), an organization promulgated to monitor transparency in the functioning of government, clarified the lack of
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Summary of Country Reports
uniform policy regarding the implementation of e-procurement/e-auction through a circular entitled "Office Order no. 46/9/03". The office order states that "departments/organizations may themselves decide on e-procurement/reverse auction for purchases or sales" provided transparency in the process is ensured. The legislative support for e-procurement is obtained from the IT Act passed in the year 2000. The IT Act aims to provide legal recognition to transactions that are electronically carried out, which are commonly referred to as e-commerce. As well, the rules in the Act specify the manner in which information has to be authenticated by means of digital signatures, the creation and verification of digital signature, licensing of certification authorities and the terms of the proposed licenses to issue digital signatures. The key objectives of implementing e-procurement in governmental organizations are: reduced tender processing time; enabling vendors to bid from far-away distances; allowing vendors to bid anonymously; safely storing and transporting bid documents; enhanced transparency in tender processing; demand aggregation; and reduced inventory costs. To catalyze the implementation of e-government in India, the Central and State Governments in India have partnered with NASSCOM (National Association of Software and Service Companies) to constitute the National Institute for Smart Government (NISG). NISG, a not-for-profit company, is being shaped as an institution of excellence in the area of e-governance with focus on developing appropriate architectures and standards, providing high-level consultancy services and capacity building at the national level. The objective is to develop a hub-like infrastructure at the national level, which can be utilized by State governments on a plug-in/plug-out basis. The hub will have details on standardized user interfaces, standardized procurement procedures, standardized sets of forms, management information system (MIS) capabilities and inter-operability standards. The development of such an infrastructure at the national level will make it simpler for governmental agencies to implement e-procurement. F.
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INDONESIA
In 2001, the Government of Indonesia established three main agendas of procurement reform, which included an initiative to develop electronic government procurement (e-GP) and to implement it in the near future. In 2003 development of the e-GP system was launched. In the initial stages of development, the lack of a legal framework, limited technology infrastructure, and lack of IT knowledge hampered rapid development of the system.
Summary of Country Reports
The government ministries have been discussing the formulation of egovernment and e-commerce laws for some time. In addition, digital signature law, digital notarization law, and civil procedure law (to modify and accept electronic evidence instead of written evidence in court) being placed on the list of priority regulations. Further complicated legal issues which should also be tackled in the near future include e-contracting (validity and enforceability of e-contract), jurisdiction of law particularly for transnational transactions and cross border taxation regimes. In 2003, the Internet penetration was only 3.77 per cent. By comparison, within the same period, Internet penetration of average Asian countries was about 6.74 per cent. It is important to note that more than 86 per cent of the existing ICT infrastructure is located in the western part of Indonesia. The remaining 14 per cent is in the eastern part. Thus, lack of ICT infrastructure in some regions potentially becomes a significant impediment for the implementation of an e-GP system. Under such constraints, the Government showed a clear commitment to ICT development and promulgated Presidential Decree No. 80 Year 2003 concerning the Guidance of Government Procurement, and Presidential Instruction No. 5 Year of 2004 concerning the acceleration to eradicate Corruption. A directive from the president enabled the development of the e-GP system through pilot projects to be utilized in the future by government institutions both at the national and regional levels collectively. The first pilot e-government procurement will be implemented in July 2005. The e-GP system aims to: (i) enhance the transparency in government procurement (each year, government procurement deals with a large proportion of government expenditure involving thousands of projects, acquisitions and transactions); (ii) raising competitiveness for government supply; and (iii) increase the effectiveness and efficiency of government procurement administration. According to the National e-GP's Plan (short term plan), the e-GP system is being targeted to five line ministries which are: the Ministry of Public Works, the Ministry of Finance, the Ministry of Energy, the Ministry of Communication and Information as well as the Ministry of National Development Planning (Bappenas). Each of those ministries must implement e-GP for a number of projects specifically those financed by a foreign loan or grant. Currently, the system is focusing on government procurement through electronic tendering (e-tendering). The main reason is that electronic tendering is relatively easy to start for both government and suppliers, and low cost to implement and maintain while producing significant benefits to businesses and government savings. More importantly, more than 85 per cent of government procurement expenditure is for tendering. In the next few years, the system will be further enhanced based on the use of on-line prices quotes (e-purchasing) which will include online catalogues and reverse auction.
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Summary of Country Reports
As of now, the e-tendering service is primarily used for the procurement of goods. The scope of this system is still restricted or semielectronic, which only includes uploading tender notices (announcement), document upload and download, and disclosure of the result of prequalification and the result of successful tender (the winner). Other documents such as authorization certificates and bank statements are submitted manually. The successful implementation of e-GP not only demands a reliable system and procedures but requires a dependable organization. G.
LAO PEOPLE'S DEMOCRATIC REPUBLIC
The Lao People’s Democratic Republic (PDR) is one of the least developed countries in the South-East Asia region, with an estimated per capital income of US$ 310. More than three quarters of the population lives on less than US$ 2 a day. About 85 per cent of the total population resides in rural areas. Lao PDR is in the initial stages of developing ICT industry and infrastructure. Currently, broadband network and wireless or wire-line high speed Internet are being expanded to all districts and rural areas. The central long-distance telephone system in Vientiane has recently been completed and the number of desk telephones has expanded to 7,680. The country has 65 central telephone services. The number of Internet shops in urban areas has increased rapidly. Today, all provinces and some districts have access to the Internet through a dial up system. All government offices, corporations and large private firms have computer facilities. However, these computers and Internet services are mainly used for basic functions such as e-mails, chat, and Internet telephone. Firms and businesses do not conduct e-commerce. The lack of ICT services and computer usage in Lao PDR may be attributed to limited technical capacity, lack of resources, and low level of IT literacy.
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In January 2004, the Government of Lao PDR passed the Decree of Prime Minister on Procurement of Goods, Works, Maintenance and Services No. 03/PM, and in March of 2004, the Rules and Regulations on Government Procurement of Goods, Works, Maintenance and Services. The Procurement Monitoring Office (PrMO) was established within the Ministry of Finance (MOF) to: (i) play a pivotal role in procurement reform; (ii) provide monitoring of countrywide procurement activities; (iii) support delivery of training programmes; (iv) form standards for bidding documents; and (v) develop procurement policies. Several of the line government ministries and agencies are making efforts to develop IT applications and computerized administration. In recognition of this, the Ministry of Commerce is now drafting an e-commerce law. Subject to availability of funds, the MOF and
Summary of Country Reports
the PrMO will launch several e-government programmes and services. These are: a PrMO Website for public procurement information; an on-line procurement information bulletin; and a procurement database including a list of registered suppliers, contractors and consultants. Severe constraints and challenges make the development of egovernment applications such as e-procurement difficult to attain. Policies and regulations have not been formulated, reform programmes are inefficiently managed, and the current administrative process is rigid. In addition, there is an assumption that e-GP is primarily about technology and therefore requires only technology and hardware. There is a lack of awareness and understanding on the benefits and functions of ICT enabled services. Leading challenges are inadequate access and connectivity to communications infrastructure, and poor pre-existing procurement practice, legislation and regulation. H.
MONGOLIA
The Government of Mongolia has set out an aggressive ICT sector strategy under the “E-Mongolia” National Program. The programme focuses on developing ICT into a pillar of the socio-economy, with sub-programmes such as “e-government”, “e-education”, “e-health”, “e-commerce”. At present, there are 150,000 fixed telephone lines, 420,000 cellular subscribers, and 50,000 Internet subscribers in Mongolia. The Mongolia Telecom Co. Ltd and Railway Authority provide fixed telephone service. The Mongolia Telecom Co. Ltd and Mobicom Co. Ltd have enabled wireless service. Skytel Co. Ltd and Mobicom Co. Ltd offer cellular service. The first electronic mail service was introduced by Datacom company in 1994, and currently there are eight Internet Service Providers (ISPs). All Mongolian ISPs are connected to foreign carriers via space satellite and fiber optic cable of railway. The vision of the Government of Mongolia is to establish state policy and regulatory regime that provides a favorable environment for the development of legislation, economy, business, and society based on ICT. The Standing Committee on ICT development was established in 2005. The Government Agency, Information and Communications Technology Authority (ICTA) under the Prime Minister of Mongolia, is responsible for all ICT policies, coordination and implementation. The National ICT Committee (NICT) is an ad-hoc body aimed at assisting the Government in the implementation of action plans derived from ICT vision 2010 of Mongolia. The National ICT Committee is equally represented by government, business, education, scientific and NGO representatives. The Communication Regulatory Commission (CRC) aims to set up fair and effective competitive conditions in the IT market for enterprises. The National Information
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Summary of Country Reports
Technology Park (NITP), a non-profit government organization established in 2002 as a result of the joint effort of the Government of Mongolia and the Government of the Republic of Korea, aims to: centralize national IT capacity and create a favorable environment for IT business; provide incubation services for IT start-up companies; promote IT outsourcing; attract foreign investment into IT sector; and contribute to the implementation of the Government ICT policy. The Government of Mongolia is pursuing the development of eprocurement in Mongolia within the framework of the e-Mongolia National Program. In order to further develop this programme, Mongolia is carrying out the following activities: create a legal environment for e-procurement; establish structures of information security, e-contracts, e-signatures, and credit history of citizens and legal persons; build products to delivery networks promoting e-procurement; improve postal delivery service at all levels; create a database and an information management system; participate in international e-procurement activities; develop human resources; generate an e-procurement information structures; and learn from other countries implementing e-procurement. I.
MYANMAR
As a member country of ASEAN and in preparation for the implementation of the e-ASEAN Framework Agreement, the e-National Task Force for the Union of Myanmar was formed in order to carry out a countrywide implementation of ICT. The e-procurement Project (eP) is one of the egovernment initiatives of the e-Application Committee under the guidance of the e-National Task Force that aims to establish a national electronic procurement system. The underlying reasons for adopting electronic procurement are to manage the procurement processes more efficiently, costeffectively, and to increase productivity level. E-government procurement (eGP) will allow the underlying procurement processes to function in a seamless, timely and accurate manner, and will allow greater transparency and accountability by providing a comprehensive transaction history, audit trails, and status information for management decision makers. Furthermore, e-GP aims to develop a framework that will support the creation of a conducive environment for e-commerce to flourish in the country.
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Led by Myanmar ICT Development Corporation (MICTDC) and the e-GP Coordinating Group, the e-GP Steering Committee has been formed by a team of 16 local companies. The e-GP project was implemented as a self-financing model where all member companies are required to contribute to each investment requirement of the project. All required hardware, software applications, network and network equipments are outsourced to respective member companies. Training and implementation are also outsourced to a total of 11 member companies.
Summary of Country Reports
The Myanmar Electronic Transaction Act is now currently under the stage of finalization and will govern all electronic activities and will strengthen the establishment of a secure e-procurement system. Three security check points including digital certificates; usage of SSL (Secure Socket Layer) service to secure the connection line between the user and the server; and lastly all transactions made will be encrypted to secure the data. A total of 49 enterprises and government departments under the 9 Government Ministries are actively involved in the pilot stage of e-GP. The list of registered suppliers has reached a total of 81 companies. User training will be carried out for both suppliers and Government officials during the setting up phase. Project staffs from 11 implementation companies are required to visit respective government offices to verify whether systems requirements are in place and government officials are proficient in the use of software. Results are already apparent as several goods and services have been effectively purchased online using the tendering module. However, limited availability and high cost of Internet connection is a major issue for both the government and suppliers. An electronic payment and fund transfer system has not been set up. In addition, the electronic procedures and a digitalized e-procurement process are new concepts that have yet to be fully accepted and understood by Government officials and the population of Myanmar. J. NEPAL The promotion and development of the ICT sector can play a vital role in accelerating the development process of the country. Currently in Nepal, there are 11 ISPs and more than 100,000 Internet users. Remote and rural areas lack adequate ICT facilities, thus ICT business is mostly centred in urban areas. In complement to government initiatives, most of the large businesses and hotels have their own website and conduct businesses online. The Government of Nepal and the private sector are making continuous efforts for the development and adoption of modern information technology. The Ministry of Science and Technology of Nepal was established in 1996 with the responsibility of creating a conducive environment for the adequate development of science and technology and making necessary arrangements for its effective application in national development activities. The Ministry prepared the Information and Technology Policy 2000 with the vision of placing Nepal on the global map of information technology within the next five years. A new Science and Technology Policy was set out in 2005. For the implementation of the vision, the High Level Commission for Information Technology (HLCIT) is entrusted with
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Summary of Country Reports
the responsibility of promoting the IT sector by providing support to the Government in formulation, implementation, monitoring and evaluation of IT policy and strategies. As a result, the Electronic Transaction Ordinance 2004, Electronic Transaction (Certification) Regulation 2005 and Information Technology (Tribunal) Regulation 2005 have been enacted. The Procurement Act is in the process of finalization. With financial assistance from the World Bank, an e-procurement system will be introduced after enactment of the Procurement Act. The public procurement system of Nepal is manually operated. The Government allocates a fixed amount of budget to all government offices for public procurement at the central and local levels. Despite the Financial Procedure Act and Financial Administration Rules, lack of transparency and accountability are major issues. His Majesty's Government of Nepal is one of the largest buyers of goods, works and services in the country. The decision making process is purely paper-based and involves numerous bodies from local government departments to central government ministries. These bodies lack coordination and information which creates ambiguities, and often leads to briberies. Sound procurement management is a prerequisite for ensuring transparency in the government. A leading constraint in the development of an e-procurement system is the lack of awareness among political leaders and bureaucrats. Another main issue is the instability of the political leadership which affects political commitment and continuity in government policy. K.
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PAKISTAN
The history of ICT in Pakistan, apart from traditional telephony, is relatively short. The Pakistan Computer Bureau (PCB) was established in 1971 as an attached department of the Cabinet Division. In 2000, the Ministry of Information Technology (MoIT) was established and attached to the PCB. The Ministry of Information Technology is the national focal Ministry and enabling arm of the Government of Pakistan for planning, coordinating, and directing efforts to initiate and launch ICT programmes and projects aimed at economic development of the country. In October 2002, the Electronic Government Directorate (EGD) was established in pursuance to a decision of the Federal Cabinet. Converting the former Information Technology Commission, the Government formed the EGD as a cell within the Ministry of Information Technology. The main goal of EGD is to implement e-government in the Federal Government of Pakistan. Recognizing e-government as an important enabler for the Government of Pakistan in the 21st Century, the Prime Minister of Pakistan has convened the National Electronic Government Council (NEGC) as the chairperson to ensure top leadership to the cause. NEGC meets on a quarterly basis to review and facilitate the progress on e-government.
Summary of Country Reports
Procurement management in Pakistan is largely based on the expenditure management system. The public procurement system is largely manually operated. The Government is facing a great challenge to make the public procurement system efficient, economical and effective. Pakistan Procurement Regulatory Authority has standardized the procurement practice and process for the entire government. Even though the current procurement practices stipulate a single procurement process for all Federal Government Agencies, it is difficult to oversee and enforce. There is a lack of a common understanding on the procurement process across all agencies, which leads to differing procurement standards depending on the individual and agency's interpretation of the process. The main shortcomings are: lack of awareness of where the Government is spending its procurement budget; lack of common understanding among government agencies on the procurement process; lack of central negotiations and limited resources such as office materials, and furniture; and lack of transparency and accountability. The main objectives of introducing e-procurement in the Federal Government of Pakistan are: streamline and enforce a single procurement process throughout all the agencies of the Federal Government of Pakistan; ensure a fast, economical and intuitive process for all agencies of the Federal Government of Pakistan, leaving the procurement at the agency level and the underpinning system to be run centrally for all Federal Agencies; reduce costs of all individual advertising in newspapers; ensure system supported transparency for suppliers through the central dissemination of information to all registered suppliers and accountability in decisionmaking for agencies; and introduce a shopping mall for low value items with centrally negotiated prices for all agencies, e.g., business cards, toners, furniture, etc. In February 2005, the Government of Pakistan signed an MOU with the Republic of Korea in order to secure Korean expertise in introducing a world-class e-procurement system in Pakistan. In May 2005, a six-member delegation from Korean IT Promotion Agency (KIPA) and Public Procurement Service (PPS) visited Pakistan to conduct a feasibility study of eprocurement. The completed feasibility study, which will be available by the end of August 2005, will include a plan for an e-procurement system and IT infrastructure; legislative and legal framework; a high level e-procurement project plan; and high level resource and budget requirements. L. PAPUA NEW GUINEA Since independence in 1975, the focus of the Government of Papua New Guinea has been on the infrastructural development around the country. The rapid technological advance in the late 1980s and 1990s caused the Government to recognize the importance of this sector as an
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Summary of Country Reports
important tool to foster development. In 1994, the Government passed a Policy on Information and Communication, coinciding with the introduction of the Internet. Today, Internet is accessible throughout major centres in the country through leased-lines and dial up systems, facilitated by four (4) ISPs. Almost all Government departments and offices and business firms use computers, with e-mail correspondence increasingly gaining widespread use. The use of ICT in the business sector has grown rapidly over the last decade. From the simple use of surfing the Internet to e-mails to EFPOS (Electronic Funds Transfer Point of Sale) and now the recently introduced e-banking, the use of ICT is drastically changing the business environment in the country. Over 70 per cent of businesses in major commercial centres now accept online cash transaction. The Government's Medium Term Development Strategy (MTDS) 2005-2010 has given priority to ICT. It is envisioned that an improved telecommunications network will promote economic development and social development and bridge the digital divide. The Papua New Guinea Radiocommunications and Telecommunications Technical Authority (PANGTEL) is the technical regulator of the Telecommunications and Radiocommunications industry, including television and broadcasting services in Papua New Guinea. PANGTEL was established by virtue of the Telecommunications Act 1996. The objectives of the PANGTEL include developing policies for technical and performance standards, interacting with accredited international telecommunications bodies, approve and certifying telecommunications equipment, and oversee the management of telecommunications resources and license. The Department of State Enterprises, Information and Communication (DSE&IC) was established in December 2003 by an Act of Parliament to, among other things, help ensure that all citizens benefit from an improved information and telecommunications system. Currently, there is no law that governs online transactions, Internet and or other cyber issues, however the DSE&IC has acknowledged that just like other investment sectors of the economy, ICT will require a sound policy, regulatory and institutional framework. The DSE&IC has constituted a Committee of Government Agencies, NGOs, the private sector and other stakeholders to guide and support the Department in the formulation of relevant ICT policies.
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The Government has recognized that with the increasing use of modern technology today, it must adopt and make swift changes. Unfortunately, most of the government agencies, apart from the Internet and e-mail connections, have no online network through which information can be shared between departments and made accessible to the general public. It is envisaged that the IGIS will achieve this objective. The human resource
Summary of Country Reports
in the IT industry is growing steadily as the public and private institutions produce new IT graduates into the workforce. There is an urgent need to conduct research into the ICT sector in the country to clearly determine its impact on the public and the private sectors, the individuals and the economy as a whole. The physical terrain of the country has been one of the major hindrances to the establishment of telecommunication infrastructure. This has impacted greatly on rural centres missing out on online services. E-commerce/business is therefore more prominent in major commercial centres than in the rural areas where the bulk of the population resides. M.
PHILIPPINES
At the turn of the century, the Philippine government has made some notable strides to catch up with the rest of the world in the pursuit of egovernance. In the year 1999, the Government of the Philippines through the Department of Budget and Management's Procurement Service (PSDBM) began an initiative to modernize and reform its procurement practices and systems. Perhaps the most notable milestone relative to information technology in the country is the enactment of the e-Commerce Law or Republic Act 8792 (RA 8792), passed in June 2000 during the term of then President Estrada. The e-Commerce Law gave electronic documents the same legal protection as paper-based documents. Furthermore, the Act mandated that all government offices are to be Internet-enabled within two years. In November 2000, the PS-DBM through the assistance of the Policy, Training and Technical Assistance Facility (PTTAF) of the Canadian International Development Authority (CIDA) introduced an Internet-based, government-wide Pilot Electronic Procurement System (EPS), which became operational on 1 Deccember 2000. The goal of the Pilot EPS is to provide a single window for registration of suppliers and posting of bid opportunities by government agencies for access by suppliers through the Internet. The objectives of the EPS are the following: to establish an open, transparent, efficient and competitive marketplace for government procurement; to get better prices; to build the framework to continually improve the procurement processes; and to be sustainable over the long term. The EPS is composed of an electronic bulletin board, electronic catalogue, and a supplier registry. To support the implementation of the pilot EPS, the PSDBM set up a customer service area and created the EPS Division to assist and answer queries regarding electronic procurement. The Division was also tasked to conduct training for government agencies and suppliers on how to use the system.
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Summary of Country Reports
President, Gloria Macapagal-Arroyo issued Executive Order 40 (EO 40), which recognized the EPS as the central portal for government procurement and held the national government responsible for its management and operation. The EPS has been managed by PS-DBM under the supervision of the Government Procurement Policy Board (GPPB), an interagency body tasked to protect national interest in all matters affecting public procurement. In January 2003, EO 40 was formalized into a law through the enactment of the Government Procurement Reform Act also known as Republic Act 9184 (RA 9184). This law sets forth the rules and regulations for government procurement transactions as guided by the principles of transparency, competitiveness, streamlined procurement processes, accountability, and public monitoring. It requires all government transactions pertaining to procurement of materials and services to be centrally posted through an Internet infrastructure which will be called the Government Electronic Procurement System (GEPS), formerly the EPS. As of 30 May 2005, a total of 3,395 government agencies and 12,208 suppliers have been registered into the system. In the year 2002, a 5-year plan for the e-procurement system was formulated. Subsequently, the bidding for the development of the Government Electronic Procurement System to include enhancement and the development of the features such as the Virtual Store, e-payment and e-bid submission was conducted. Roll-out of the GEPS to the local government units down to the barangay level is targeted for the year 2006. The setup of information kiosks for each of the cities/municipalities and eventually the barangays is being pushed to address the possible system acceptability issues at these local units. N. SRI LANKA Sri Lanka is a developing country with a per capita income above US$ 1,000. The volume of annual procurement in the public sector is about US$ 0.1 billion which is a very significant amount of its national budget. The public procurement functions are mostly decentralized. The line ministries and provincial councils are responsible for procurement within their organizations, however, tender awards beyond a certain value have to be referred to the Cabinet for decision. The most serious shortfalls in public contract award and implementation are due to delays in contract awards resulting from delays in carrying out procurement actions according to the tender guidelines and donor guidelines.
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In order to streamline the public procurement system, the National Procurement Agency (NPA) was established under the President Secretariat. Amongst other things, the NPA is directly responsible to the Government to speed up procurement by securing transparency, integrity, and equal
Summary of Country Reports
opportunity for all potential competitors in the public procurement activities. The existing procurement system is largely manually driven with limited use of technology. However, the NPA has initiated the construction of an NPA website which would publish information pertaining to standard bidding documents and standard requests for proposals, and standard functional specifications for certain goods. The NPA is additionally developing an Interactive Web-based Monitoring System to monitor procurement activities through the NPA Website. ICT infrastructure in Sri Lanka is limited, but developing. A voice and data network is in place that can service both city and regional users. At the moment, all government agencies are using Computerized Integrated Government Accounting System (CIGAS) for public accounting and financial reporting. In addition, activities are being carried out to provide ICT at the village levels under the E-Governance Project. Information and advice on procurement policy, regulation and process is freely available. Feedback on unsuccessful bids (debriefing) is available with independent appeal boards to challenge for awards. Training and education on procurement is readily available to the industry. Some private industry sectors have already moved to an e-procurement process. Clear policies that translate into regulations, guidelines and procedures are easily available to buyers and suppliers. Procurement planning to assess feasibility and risk of proposals is carried out. Standardized bidding documents are available in the procurement process. Some level of technology has been successfully applied to the procurement process. Management control of compliance and performance is in place. O.
THAILAND
The Government of Thailand is aware of the necessity to modernize provision of services to its citizens. In 2001, the Thai Government launched the e-Government Project which identified four types of government services to be further developed into e-services: the Online Information Service, the Simple Transaction Service, the Payment Gateway, and eprocurement. The Cabinet mandated that all government purchases made after 1 January 2005 follow the e-Government Procurement (e-GP) procedure developed by the Department of Controller General of the Ministry of Finance. The aim of e-GP is to make the purchasing process more transparent, efficient, and open to a wider range of suppliers. The Department of Controller General categorized the Government procurement systems in Thailand into the e-tendering system, and the epurchasing system including e-shopping and e-auction. The Cabinet, at a meeting held on 1 October 2002, reached a resolution which requires all government agencies to purchase supplies through reverse e-auction
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method. Ministries and departments were directed to establish their own websites in support of the reverse e-auction process and were further required to conduct at least one reverse e-auction transaction before the end of December 2002. At a subsequent meeting held on 5 October 2004, the cabinet introduced the following basic guidelines for government agencies to follow: the first guideline required that all government acquisition (excluding local government) must be published on http://gprocurement.go.th; the second guideline was that any purchase over 2 million baht (US$ 50,000) should use the reverse e-auction procedure; the third guideline directed central government offices in Bangkok to use the e-shopping procedure when purchasing the following five items: televisions, fax machines, digital projectors, laser printers, and laptop computers. The changes have been gradual because most government agencies are still not fully aware of or feel uncomfortable with the new purchasing procedure. It is expected to take more time to fully implement e-GP nation-wide. In addition, the Department of Comptroller General has the duty to both pre-qualify and provide a list of officially approved e-marketplace service providers to all government agencies for their use. The e-marketplace service providers are companies who specialize in organizing electronic procurement events, providing necessary equipment and technical staff, and preparing interested bidders for e-GP. Another important factor which contributes to the success of e-GP is the standardization of the Government Product and Service Code (GPSC) which established an agreement on what items or services are being acquired or delivered. P.
TIMOR-LESTE
The Government of the Republica Democratica Timor-Leste has a leading role in developing and implementing ICT sustainable national strategies.The Government aims to involve the private sector and civil society in the formulation of a national ICT plan. Currently, there are three government data centres located in the capital, Dili. A Fiber loop network interlinks over 85 per cent of the Government and over 21 Radio wireless clients within the Government network. The only commercial ISP is Timor Telecom.
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Timor Leste has yet to develop a national e-strategy plan, including the necessary human capacity building and the basic infrastructure at the grass root level. The Government is providing and improving ICT connectivity for the main governmental buildings, schools, universities, post offices, and health institutions. Training the workforce with IT and management skills is seen as a national ICT priority from the public sectors' viewpoint. It is additionally necessary to ensure that ICT is fully integrated at all levels, including in curriculum development, teacher training, institutional
Summary of Country Reports
administration and management. The use of ICT could contribute to more efficiency and better quality in education services. This requires e-literacy at all levels of school to meet the challenges of the Information Society. However, training of teachers and sufficient resources for schools to integrate ICT in the educational programmes must first be provided. The Government plans and needs to develop affordable solutions in terms of hardware and software that meet the needs of all educational levels and are suited to local conditions. Although an ICT infrastructure is largely underdeveloped, it is clearly understood within the Ministry of Planning and Finance that introducing eprocurement is dependent upon a strong infrastructure. The Government has recognized that the infrastructure of the country requires the following components: a legal and regulatory framework under which businesses can operate; a banking system to facilitate transactions through e-banking; a reliable and accessible telecommunication system; efficient and effective internal procurement system; and a vibrant business environment to provide the necessary goods and services. Since e-procurement would affect the private and public sectors, the Government Procurement Division is working on the following areas to create an effective procurement system in the country: introduction of a Procurement Decree law; use of standard bidding procedures and documents; developing standard specifications for goods to facilitate cataloguing; pre-qualifying of vendors/suppliers; and training of procurement personnel and vendors. At this stage, technical assistance is paramount to assist the Government of Timor-Leste in designing and implementing a sound eprocurement system and addressing the challenges to infrastructural development. Q. VIET NAM Viet Nam is in the initial stages of modernizing its infrastructure to meet the rapid expansion of ICT. The Internet was first introduced in 1997. Currently there are about 17,500 business websites, more than 2 million Internet subscribers, 35 thousand broadband contacts, and 53.9 per cent of private firms and corporations are using aysmmetic digital subscriber line (ADSL) or high-speed leased line. In 2005, all the districts in Viet Nam have Internet access-point through ADSL line. In urban areas, cable TV with Internet access is available, and mobile telephones are becoming affordable. Viet Nam has more than 170,000 enterprises of which there are about 2,000 central state-owned enterprises (SOEs). The percentages of central SOEs having LAN, Internet, website, and e-mail transactions are 53 per cent, 78.4 per cent, 22 per cent, and 22 per cent respectively. The percentages of non-state-owned enterprises having LAN, Internet, website,
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and e-mail transactions are 16.3 per cent, 33.6 per cent, 4.5 per cent, and 6 per cent respectively. The percentages of joint ventures having LAN, Internet, website, and e-mail transactions are 49.9 per cent, 100 per cent, 26.9 per cent, and 17 per cent, respectively. However, most enterprises use the Internet for simple purposes such as e-mail, and providing overview information about the enterprises and their products. The use of ICT for e-procurement or e-government is still very limited and in initial stages of implementation. Several ministries, branches and corporations have their websites for bidding such as the Department of Planning and Investment of Danang City with the Petroleum Corporation, and the Electric Power Corporation of Vietnam. However, these websites provide very basic services such as bidding announcements, and information on bidding packages. At present, The Ministry of Planning and Investment is entering into a contract with a domestic supplier to develop a centralized website for procurement. It is estimated that the website will come into operation by the end of 2005. With the operation of this website, Viet Nam will lay the foundations to establish and develop an e-procurement system. In May 2005 a draft of the Law on E-transactions was tabled to the National Assembly for comments. If the law is passed by the National Assembly, it will be the first legal document of Viet Nam to officially recognize the legal status of e-messages, e-data, e-signature and e-transactions as traditional written documents, signatures and contracts. The Government of Viet Nam's roadmap for developing telecommunications emphasized the importance of establishing institutions and specializing authorities of e-transactions (background for e-procurement) at the central level (National Assembly, Government, specialized Ministries) and at the local level (working groups), that have adequate power to monitor and promote electronic transactions. In order to successfully augment the usage of ICT and lay the foundation for an e-procurement system, Viet Nam needs to accelerate efforts to establish a legal framework; expand the scope of the procurement bulletin; establish the website on procurement: strengthen the technical competence of the government officers; and most importantly develop the technical infrastructure for e-procurement.
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ANNEXES
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Annex I: Workshop Agenda
ANNEX I WORKSHOP AGENDA Monday, 20 June 2005 13:00 – 14:00
Registration
14:00 – 14:40
Opening Ceremony Welcome Remarks by: Mr. Kyung-Soo Choi, General Administrator, Public Procurement Service (PPS) Mr. Hak-Su Kim, Executive Secretary, UNESCAP Opening Remarks by:
Mr. Peter McCawley, Dean, ADBI
Election of Officers Group Photo Session 14:40 – 15:00
Coffee break
15:00 – 15:40
Conference Overview and Introduction of Participants and Resource Speakers by Jeoung-Keun Lee, Senior Capacity Building Specialist, ADBI
15:40 – 16:40
Strategies and Policies of Electronic Procurement and the MDB by Robert L. Rothery, Principal Procurement Specialist, Asian Development Bank
16:40 – 17:40
Preparing Project Proposals for E-procurement by Pil-Bae Song, Principal Project Specialist, Asian Development Bank
17:40 – 20:00
Welcome Dinner
Tuesday, 21 June 2005 08:30 – 10:00
Country Reports of Bangladesh, Cambodia, China, Indonesia, Lao People's Democratic Republic, Myanmar, Nepal and Sri Lanka (Chairperson)
10:00 – 10:30
Coffee break
10:30 – 12:00
Country Reports of Bhutan, India, Mongolia, Pakistan, Papua New Guinea, Philippines, Thailand, Timor-Leste and Viet Nam (Chairperson)
12:00 – 13:00
Lunch
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Annex I: Workshop Agenda
13:00 – 13:45
An Overview of E-government in South-East Asian Countries, Wonjun Lee, Professor of MIS, SungKyunKwan University
13:45 – 14:00
Guideline for Preparing a Request for Technical Advisory Service, by Young-jin Choi, ICT Expert, ICT Applications Section, UNESCAP
14:00 – 14:30
E-government Master Plan Consulting: Myanmar's Case by Sam-Youl Lee, Research Fellow, KISDI
14:30 – 15:00
Coffee break
15:00 – 15:45
Japanese E-procurement in the Construction Sector by Minoru Kamoto, Japan Construction Information Center
15:45 – 17:00
Public E-procurement: MDB Best Practices by Robert Rothery, ADB and David McDermont, International Governance Solutions, Australia
Wednesday, 22 June 2005 09:00 – 10:00
Study Tour (Leave the Hotel for Samsung SDS)
10:00 – 11:30
Tour of Samsung SDS in Kwacheon
11:30 – 13:00
Lunch
13:00 – 15:00
Leave for the Public Procurement Service in Daejeon
15:00 – 15:30
Coffee break
15:30 – 16:30
Case Study: Innovation in Procurement through Government E-procurement System (GePS) by Hyung-Jong Min, Director General, Property and Information Bureau, PPS
16:30 – 16:50
Tour of facilities and call-centre
16:50 – 17:30
Presentation for execution of e-bidding
17:30 – 20:00
Leave Daejeon to Seoul
Thursday, 23 June 2005
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08:30 – 9:15
Standardization of E-procurement by Jae Yong Lee, Director, Information Management Division, PPS
9:15 – 10:00
Electronic Government Procurement Strategic Planning by David McDermont, Managing Director, International Governance Solutions, Australia
10:00 – 10:30
Coffee break
Annex I: Workshop Agenda
10:30 – 11:15
Procurement Transformation: the Role of Open Standards in E-procurement by Stephen W. Braim, Government Programs Executive, IBM Korea/Asia Pacific
11:15 – 12:00
Legal Aspects of E-procurement by Roland Amoussou-Guenou, Regional Expert on Legal Cooperation in the ASEAN, The Embassy of France in Thailand
12:00 – 13:00
Lunch
13:00 – 14:00
Buyer-Supplier Activation by David McDermont, International Governance Solutions, Australia
14:00 – 14:30
Case Study: E-procurement in India by Mr. Ramanathan Somasundaram, National Institute for Smart Government
14:30 – 15:00
Coffee break
15:00 – 15:45
National E-procurement Service Experience by Seong-jun Won, Principal Consultant, Samsung SDS
15:45 – 17:30
Preparation of Project Proposals
Friday, 24 June 2005 08:30 – 09:15
E-catalogs and Product Information Management by Sang-Goo Lee, Director, Center for E-business Technology of Seoul National University
09:15 – 10:00
Conducive Environments for E-procurement: Examples and Best Practices by Jonathan Kushner, Global Strategic Accounts, Microsoft
10:00 – 10:30
Coffee break
10:30 – 11:15
Protocols for Government Procurement of Software Assets by Robert Kramer, Vice President of Public Policy, Asia-Pacific, CompTIA
11:15 – 12:00
Cubic Model of Selecting Countries and Areas for Technical Advisory Services of E-government Related Systems, Suke Kyu Lee, Assistant Professor of Marketing, SungKyunKwan University
12:00 – 13:00
Lunch
13:00 – 13:45
PKI-based Secure E-procurement by Chris Min Jang, Team Leader of Business Development, Korea Information Certificate Authority 79
Annex I: Workshop Agenda
13:45 – 14:30
Introducing E-government in the Republic of Korea by Seok-Koo Ji, Vice President, KIPA
14:30 – 15:00
Coffee break
15:00 – 16:00
Overview of Emerging Treats in Cyber World by Joel Scambray, Senior Director, Microsoft Corporation and Scott A. Warren, Senior Attorney, Internet Safety and Anti-Counterfeiting, Far East Region, Law and Corporate Affairs, Microsoft Co., Ltd.
16:00 – 17:30
Preparation of Project Proposals
Saturday, 25 June 2005 08:30 – 10:00
Presentation of Project Proposals (Chairperson)
10:00 – 10:20
Coffee break
10:20 – 11:00
Presentation of Project Proposals (Chairperson)
11:00 – 11:30
Presentation of Technical Requests (Ja-Kyung Yoo)
11:30 – 12:00
Finalization of Project Proposals and Evaluation of the Conference (Jeoung-Keun Lee)
12:00 – 12:30
Closing Ceremony
Advisory
Service
Closing Remarks by Hyung-Jong Min, PPS Closing Remarks by Ja-Kyung Yoo, UNESCAP Closing Remarks by Jeoung-Keun Lee, ADBI Handing Out Certificates Vote of Thanks by Participants **********
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Annex II: List of Participants
ANNEX II LIST OF PARTICIPANTS BANGLADESH Mr. Mustafa Kamal Haider, Joint Secretary, Cabinet Division, Room #19, Building 1, Bangladesh Secretariat, Dhaka (Tel.: +880-2-716-4456; Fax: +880-2-716-0656) BHUTAN Mr. Sonam Chhophel, Procurement Officer, Drugs Vaccines & Equipment Division, Ministry of Health, Thimphu (Tel.: +975-232-5955/5956; Fax: +975232-3809; E-mail:
[email protected]) CAMBODIA Mr. Ly Narith, Deputy Director, International Telecommunication Department, Ministry of Posts and Telecommunications, St. 13-102 Sangkat Watt Phnom, Khan Doun Penh, Phnom Penh (Tel.: +855-23-430-572/+855-12812-996; Fax: +855-23-430-273; E-mail:
[email protected]) Mr. Yi Sokthearith, Deputy Chief, Department of Investment and Cooperation, Ministry of Economy and Finance, St. 92 Sangkat Wat Phnom, Khan Daun Penh, Phnom Penh (Tel.: +855-23-428-424; Fax: +855-23-428-424; Email:
[email protected];
[email protected]) Mr. Huot Vathna, Deputy Director, Department of Public Procurement, Ministry of Economy and Finance, Section D, CDC, Government Palace, Sangkat, Wat Phnom, Khan Daun Penh, Phnom Penh (Tel.: +855-23-427046; Fax: +855-23-427-046; E-mail:
[email protected]) CHINA Ms. Tang Beibei, Senior Staff Member, Treasury Department, Ministry of Finance, #3 Nam San Xiong, San Li He, West District, Beijing (Tel.: +8610-6855-2368; Fax: +86-10-6855-2366; E-mail:
[email protected]) Mr. Zhang Hang, Senior Staff Member, Treasury Department, Ministry of Finance, #3 Nam San Xiong, San Li He, West District, Beijing (Tel.: +86-10-6855-2272; Fax: +86-10-6855-2231; E-mail: zhanghang@ ccgp.gov.cn) INDIA Mr. Ramanathan Somasundaram, Project Manager, e-Procurement, National Institute for Smart Government, Block B, IIIT Campus, Gachi Bowli, Hyderabad 500019, India (Tel.: +91-93462-29108; Fax: +91-40-2300-6685; E-mail:
[email protected])
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Annex II: List of Participants
INDONESIA Mr. Bonifasius Wahyu Pudjianto, Head, Sub-Division for E-government Application Development, Ministry of Communication and Information Technology, Jl. Medan Merdeka Barat no 9, Jakarta (Tel.: +62-21-384-9366; Fax: +62-21-384-9366; E-mail:
[email protected]) Ms. Sarah Sadiqa, Head, Public & Private Partnership in Infrastructure Division, National Development Planning Agency (BAPPENAS), JL. Taman Surapati No. 2, Jakarta 10310, (Tel.: +62-21-310-1924; Fax: +62-21-3101924; E-mail:
[email protected]) LAO PEOPLE'S DEMOCRATIC REPUBLIC Ms. Sifong Oumavong, Deputy Director, International Financial Cooperation Division, External Financial Relations Department, Ministry of Finance, That Luang Road, P.O. Box 46, Vientiane (Tel.: +856-21-911-370; Fax: +856-21412-142; E-mail
[email protected]) Mr. Thone Phonephachanh, Director, Procurement Monitoring Office, Ministry of Finance, That Luang Road, Vientiane (Tel.: +856-21-263-357; Fax: +856-21-262-325; E-mail:
[email protected]) MONGOLIA Mr. Lamjav Gundalai, Member of the Parliament, Chairman, Subcommittee on Ethics, Parliament of Mongolia, State Great Khural, State Building, Ulaanbaatar 12 (Tel.: +976-11-321986/-262727; Fax?+976-11-322866; E-mail:
[email protected]) Mr. Sainbuyan Otgonbayar, Member of the Parliament, Chairman, Standing Committee on Information, Communication and Technological Development, Parliament of Mongolia, State Great Khural, State Building 111, Ulaanbaatar 12 (Tel.: +976-11-327202; Fax: +976-11-322866; E-mail:
[email protected]) MYANMAR Ms. Shwe Zin Ko, Staff Officer, Directorate of Trade, Ministry of Commerce, 228-240 Strand Road, Pabedan Township, Yangon (Tel.: +95-1371217/-291490; Fax: +95-1-253028; E-mail:
[email protected];
[email protected]) Ms. Su Su Win, Assistant Manager, Myanmar Agricultural Produce Trading, Ministry of Commerce, 302/304 Pansoden Street, Kyauktada Township, Yangon (Tel.: +95-1-385-324; Fax: +95-1-371-725/734; E-mail: mapt.hr@ mptmail.net.mm) 82
Annex II: List of Participants
NEPAL Mr. Bhaba Krishna Bhattarai, Deputy Financial Comptroller General, Financial Controller General Office, Ministry of Finance, Anamnagar, Kathmandu (Tel.: +977-1-4414-325; Fax: +977-1-4414-651; E-mail:
[email protected]) PAKISTAN Mr. Seerat Asghar, Program Coordinator, Electronic Government Directorate, Ministry of Information Technology, 10-D West, Taimoor Chambers, Blue Area, Islamabad (Tel.: +92-51-920-5889/5992; Fax: E-mail:
[email protected]) Mr. Muhammad Khalid Javed, Managing Director, Public Procurement Regulatory Authority, Federal Bank for Cooperatives Building, Sector G-5/2, Islamabad (Tel.: +92-51-922-4824; Fax: +92-51-922-4823; E-mail:
[email protected]) Mr. Adnan Khan, Director General, Electronic Government Directorate, Ministry of Information Technology, 10-D West, Taimoor Chambers, Blue Area, Islamabad (Tel.: +92-300-985-9100; Fax: +92-51-920-5981; E-mail:
[email protected]) PAPUA NEW GUINEA Mr. Philip Stagg, Executive Chairman, Central Supply & Tenders Board (CSTB), P.O. Box 6457, Boroko, Port Moresby NCD (Tel.: +675-311-3777; Fax: +675-311-7778; E-mail:
[email protected]) PHILIPPINES Ms. Vina Liza Ruth C. Cabrera, Director, Management Information Service, Department of Trade and Industry, 5th Fl., Trade and Industry Bldg., 361 Sen. Gil Puyat Ave, Makati, Manila 1200 (Tel.: +632-751-3137; Fax: +632751-3138; E-mail:
[email protected]) Ms. Rosa Maria Martinez Clemente, G-EPS Project Manager, G-EPS Group, Procurement Service, Department of Budget and Management, Unit 2504 Raffles Corporate Center, F. Ortigas Jr. Road (Emerald Avenue), Ortigas Center, Pasig City, Philippines (Tel.: +632-900-5231; Fax: +632-9005239; E-mail:
[email protected]) Ms. Teresita Baltazar Roberto, Director, Information Technology Consulting Service Office (ITCSO), Commission on Information and Communication Technology (CICT), National Computer Center, C.P. Garcia Ave., U.P., Diliman, Queson City, Philippines (Tel.: +632-920-7411/632-920-01-01 (loc. 140); Fax: +632-920-7411; E-mail:
[email protected])
83
Annex II: List of Participants
SRI LANKA Mr. Sarath Muthugala, Director, Monitoring, National Procurement Agency, 22-01 West Tower, World Trade Centre, Colombo 1 (Tel: +94-11-234-6381/6382-9; Fax: +94-11-234-6383/6384; E-mail:
[email protected]) THAILAND Mr. Thongchai Sangsiri, Computer Technical Officer, Ministry of Information and Communication Technology, 89/2 Building #9, TOT Corp., Chaengwattana Rd., Laksi, Bangkok 10210 (Tel.: +662-505-7192; Fax: +662-505-7395; E-mail:
[email protected]) TIMOR-LESTE Mr. Flavio Cardoso Neves, Director of Information Technology, Department of Information Technology, Ministry of Transport, Communications & Public Works, Avenida Bispo Medeiros, Dili (Tel.: +670-723-0189; Fax: +670-3339350; E-mail:
[email protected]) VIET NAM Mr. Tran Dang Quang, Expert, Department of Public Procurement, Ministry of Planning and Investment, 2 Hoang Van Thu Str., Hanoi (Tel.: +84-8043069; Fax: +84-4-823-0452: E-mail:
[email protected]) Mr. Nguyen Nhu Trung, IT Specialist, Information Division, ICT Centre, Ministry of Foreign Affairs, 1 Ton That Dam, Ba Dinh District, Hanoi (Tel.: +844-199-2204; Fax: +844-199-2682; E-mail:
[email protected]) -------------------RESOURCE PERSONS Ms. Anna Park, Manager, International Marketing Division, Software Business Promotion Group, Korea IT Industry Promotion Agency (KIPA), 15F KIPA Bldg., 79-2 Garakbon-dong, Songpa-gu, Seoul 138-711, Republic of Korea (Tel.: +82-2141-5515; Fax: +82-2141-5539; E-mail: hjpark@ software.or.kr) Mr. Chris Min Jang, Team Leader of Business, Korea Information Certificate Agency, 9th Fl., Hankyung Bldg., 441Joongrim-dong, Joong-gu, Seoul, Republic of Korea (Tel.: +82-2-360-3087; Fax: +82-2-380-3209; E-mail:
[email protected])
84
Mr. David McDermont, International Governance Solutions, 135 Gloster St, Subiaco Western Australia 6008, Australia (Tel.: +61-8-9381-8957; Fax: +618-9381-8569; E-mail:
[email protected])
Annex II: List of Participants
Mr. Dean Hyounseung Jang, Research Fellow, Construction Management Division, Construction & Economy Research Institute of Korea (CERIK), 11th Fl., Construction Bldg 71-2 Nonhyun Dong, Kangnam-gu, Seoul 135701, Republic of Korea (Tel.: +82-2-3441-0860; Fax: +82-2-3441-0890; Email:
[email protected]) Mr. Jin-Hui Lee, Korea IT Industry Promotion Agency (KIPA), 15F KIPA Bldg., 79-2 Garakbon-dong, Songpa-gu, Seoul 138-711, Republic of Korea Mr. Joel Scambray, Senior Director of Security, Microsoft Corporation, One Microsoft Way, Redmond, WA 98052-6399, U.S.A. (Tel.: +1-425-705-4953; Fax: +1-425-936-7329; E-mail:
[email protected]) Mr. Jonathan Kushner, Global Strategic Accounts Executive, Public Sector, Asia Pacific, Multilaterals and Bilaterals, Microsoft Operations Pte. Ltd., 22-01 One Marina Boulevard, Singapore 018989 (Tel.: +65-6882-8923; Fax: +65-9128-9102; E-mail:
[email protected]) Mr. Minoru Kamoto, Group Leader, Electronic Delivery Group, CALS/EC Department, Japan Construction Information Center, 5F Akasaka Seventh Ave. Bldg., 7-10-20 Akasaka, Minato-ku, Tokyo 107-8416, Japan (Tel.: +813-3505-0436; Fax: +81-3-3505-8983; E-mail:
[email protected]) Mr. Pil-Bae Song, Head, PAU/Principal Energy Specialist, Energy Division (SAEN), Asian Development Bank, 6 ADB Avenue, Mandaluyong City, Manila 1550, Philippines (Tel.: +632-632-6947; Fax: +632-636-2338; E-mail:
[email protected]) Mr. Robert D. Kramer, Vice President of Public Policy, CompTIA, 4350 N. Fairfax Drive, Suite 440, Arlington VA 22203-1624, U.S.A. (Tel.: +1-703812-1333 (ext. 207); Fax: +1-703-812-1337; E-mail:
[email protected]) Mr. Robert Rothery, Principal Procurement Specialist, Project Coordination and Procurement Division (COPP), Asian Development Bank, 6 ADB Avenue Mandaluyong City, Manila 1550, Philippines (Tel.: +632-632-5598; Fax: +632-636-2475; E-mail:
[email protected]) Mr. Roland Amoussou-Guenou, Embassy of France in Thailand,Visiting Lecturer, Asian Institute of Technology – AIT, Thailand, PO Box 4, Klong Luang, Pathumthani 12120, Thailand (E-mail:
[email protected]) Mr. Sam-Youl Lee, Research Fellow, Korea Information Strategy Development Institute (KISDI), 1-1 Juam-dong, Kwachun, Kyunggi-do, Republic of Korea (Tel.:+82-2-570-4380; Fax: +82-2-570-4249; E-mail: samyoul@ kisdi.re.kr) Mr. Sang-Goo Lee, Director, Center for e-Business Technology, Seoul National University, Sillim-dong, Kwanak-gu, Seoul, Republic of Korea (Tel.: +82-2-880-5357; Fax: +82-2-873-5516; E-mail:
[email protected])
85
Annex II: List of Participants
Mr. Scott A. Warren, Senior Attorney, Internet Safety and Anti-Counterfeiting, Far East Region, Law and Corporate Affairs, Microsoft Co., Ltd., Odakyu Southern Tower, 2-2-1 Yoyogi, Shibuya-ku, Tokyo 151-8583, Japan (Tel.: +81-3-4413-8203/8210; Fax: +81-3-4413-8070; E-mail: scwarren@ microsoft.com) Mr. Seok-Koo Ji, Vice President, Software Business Promotion Group, Korea IT Industry Promotion Agency (KIPA), 15F KIPA Bldg., 79-2 Garakbon-dong, Songpa-gu, Seoul 138-711, Republic of Korea (Tel.: +82-22141-5500; Fax: +82-2-2141-5569; E-mail:
[email protected]) Mr. Seong-Jun Won, Principal Consultant, Samsung SDS, 9th Fl., Ilok Bldg., 707-19 Yeoksam-2-dong, Kangnam-gu, Seoul, Republic of Korea (Tel.: +822-3429-3733; Fax: +82-2-3429-3470; E-mail: swon@ samsung.com) Mr. Stephen W. Braim, Government Programs Executive, Asia Pacific IBM Korea, The MMAA B/D, 467-12 Dogok-dong, Gangnam-gu, Seoul, Republic of Korea (Tel.: +822-3781-8652; Fax: +822-3781-7560; E-mail:
[email protected]) Mr. Suk-Kyu Lee, Assistant Professor of Marketing, School of Business/ Marketing, Sungkyunkwan University, 53 Myeongnyun-dong 3-ga, Jongno-gu, Seoul 110-745, Republic of Korea (Tel.: +82-2-760-0629; Fax: +82-2-7600629; E-mail:
[email protected]) Mr. Won-Jun Lee, Professor of Management Information System, Sungkyunkwan University, 53 Myeongnyun-dong 3-ga, Jongno-gu, Seoul 110745, Republic of Korea (Tel.: +82-2-760-0459; Fax: +82-2-745-4566; E-mail:
[email protected]) ------------------ESCAP SECRETARIAT Mr. Hak-Su Kim
Executive Secretary -------------------
Ms Ja-Kyung Yoo
Chief, ICT Applications Section, Information, Communication and Space Technology Division
Mr Youngjin Choi
NRL Expert, ICT Applications Section Information, Communication and Space Technology Division -------------------
86
Annex II: List of Participants
ADBI SECRETARIAT Mr. Jeoung-Keun Lee
Senior Capacity Building Specialist, Capacity Building & Training, Asian Development Bank Institute, 8F. Kasumigaseki Bldg., 3-2-5 Kasumigaseki, Chiyoda-ku, Tokyo 100-6008 (Tel: +81-3-3593-5512; Fax: +81-3-3593-5587; E-mail:
[email protected])
Ms. Tomoko Doi
Program Assistant, Asian Development Bank Institute, 8F. Kasumigaseki Bldg., 3-2-5 Kasumigaseki, Chiyoda-ku, Tokyo 100-6008
Ms. Clemence Mayali
Editor and Rapporteur, Asian Development Bank Institute, 8F. Kasumigaseki Bldg., 3-2-5 Kasumigaseki, Chiyoda-ku, Tokyo 100-6008 (E-mail:
[email protected]) -------------------
PUBLIC PROCUREMENT SERVICE Mr. Hyung-Jong Min
Director General, Property and Information Bureau, Public Procurement Service (PPS), Government Complex-Daejeon, 920 Dunsan-Dong, Seo-Gu, Daejeon 302-701, Republic of Korea (Tel.: +82-42-481-7002; Fax: +82-1544-1313; E-mail:
[email protected])
Mr. Jae-Yong Lee
Director, Information Management Division, Public Procurement Service (PPS), Government Complex-Daejeon, 920 Dunsan-Dong, Seo-Gu, Daejeon 302-701, Republic of Korea (Tel.: +82-42-481-7539; Fax: +82-1544-1313; E-mail:
[email protected])
87
Annex II: List of Participants
Mr. Jong-Won Lim
R&D Director, Information Management Division, Public Procurement Service (PPS), Government Complex-Daejeon, 920 Dunsan-Dong, Seo-Gu, Daejeon 302-701, Republic of Korea (Tel.: +82-42-481-7532; Fax: +82-42-472-2299; E-mail:
[email protected])
Mr. Seung-Heon Kim
Deputy Director, Information & Management Division, Public Procurement Service (PPS), Government Complex-Daejeon, 920 Dunsan-Dong, Seo-Gu, Daejeon 302-701, Republic of Korea (Tel.: +82-42-481-7503; Fax: +82-42-472-2281; E-mail:
[email protected])
Mr. Kyung-Soo Choi
Administrator, Public Procurement Service (PPS), Government Complex-Daejeon, 920 Dunsan-Dong, Seo-Gu, Daejeon 302-701, Republic of Korea ***************
88
Annex III: Project Proposals
ANNEX III PROJECT PROPOSALS Country
Project Title
Proposer
Bangladesh
Introducing e-procurement process in the cabinet division
Mustafa Kamal Haider
Cambodia
E-procurement in Cambodia
Ly Narith
Cambodia
E-procurement readiness in Cambodia
Huot Vathna
Cambodia
Enabling e-procurement environment in Cambodia
Yi Sokthearith
China
Developing e-GP strategy in China
Tang Beibei
China
Developing e-GP strategy in China
Zhang Hang
India
Standardization of e-procurement at the national level
Ramanathan Somasundaram
Indonesia
Development of electronic government procurement
Bonifasius Wahyu Pudjianto
Indonesia
Technical assistance for strengthening national capacity for the implementation of electronic government procurement (e-GP)
Sarah Sadiqa
Lao People’s Financial integrated Democratic Republic
Sifong Oumavong
Lao People’s Implementing monitoring system and Democratic Republic development strategy plan for moving towards e-GP
Thone Phonephachanh
Myanmar
Multi systems gateway project
Shwe Zin Ko
Nepal
Pilot project for e-procurement
Bhaba Krishna Bhattarai
Pakistan
Federal e-procurement service project proposal Adnan Khan
Pakistan
Monitoring of public procurement and capacity building of stakeholders
Muhammad Khalid Javed
Papua New Guinea
E-procurement
Phillip Stagg
Philippines
Development and implementation of the Philippine businesses registry as a linkage component to the PhilGEPS
Vina Liza Ruth C. Cabrera
Philippines
Jumpstarting e-procurement in the LGUs
Teresita B. Roberto
Philippines
Security plan for the GEPS and other Government systems
Rosa Maria M. Clemente
Sri Lanka
Proposal for implementation of e-procurement Sarath Muthugala in Sri Lanka
Thailand
Re-assessment of the ICT infrastructure for e-procurement implementation
Thongchai Sangsiri
Timor-Leste
Regional information hubs development in Timor-Leste (I-Hubs)
Flavio Cardoso Neves
Viet Nam
Computerization of government operations and activities
Nguyen Nhu Trung
Viet Nam
E-infrastructure
Tran Dang Quang
89
Bangladesh
Title: sion
Introducing e-procurement process in the cabinet divi-
Proposer:
Mr. Mustafa Kamal Haider, Joint Secretary, Cabinet Division, Bangladesh Secretariat
Country:
Bangladesh
Date:
June 2005
I.
INTRODUCTION
In Bangladesh, public procurement is conducted primarily by attached departments, directorates, corporations and autonomous agencies under different ministries/divisions. To ensure efficiency in procurement, the Government of Bangladesh has formally delegated power of contract approval to various levels of government, public bodies, and corporations. The procurement agencies through technical and tender evaluation committees screen and evaluate bid offers and prepare procurement proposals. The recommended proposals are approved at various levels depending on the value and amount of the project. Project directors, Director Generals, and Ministries have delegated their power for award of contracts. The Cabinet Committee on Government Purchase headed by the Ministry of Finance and Planning is responsible for assessing contract proposals for goods, services, and consultancy services worth more than 250 million taka. The Cabinet Division provides secretarial services to the Cabinet Committee. II.
ISSUES
The absence of standardized guidelines is the leading weakness of the current government procurement system. The existing rules and regulations are not adequate to meet the complexities of modern procurement process. However, the Government has taken steps to overcome the deficiencies. The Public Procurement Regulation of 2003 sets forth guidelines for tendering evaluation and approval, delegation of power, appeal procedures, auditing, and training of officials. III.
PROPOSED PROJECT
A
Purpose and output
In order to improve financial procedures and transparency in e-procurement the objectives of this project are:
90
• • • •
Ensure efficiency in procurement Promote competition among bidders Provide equitable treatment of bidders Promote fairness in bidding offers
Bangladesh
• B.
Introduce transparent regulation of universal application
Methodology and key activities
In order to facilitate bidding evaluation, two-stage bidding procedures may be adopted. Apart from price, other factors such as quality of equipment, operating cost, and completion of delivery time are taken into consideration in the evaluation of bids. The contract is awarded to the Project framework Design summary
Performance indicators and reporting mechanisms
Assumptions and risks
Working papers containing procurement proposal prepared by ministries are scrutinized by Cabinet Division
Sponsoring ministry/division is required to testify to the effect that the bid of the recommended bidder is consistent with criteria and procedures set for bidding
Political environment to implement the process through e-procurement
A procuring entity may regard a tender as responsive even if it contains minor variation that do materially alter from the terms and conditions set for tender documents
Any such deviation shall be quantified to the extent possible and taken account of in the evaluation and comparison of tenders
Pressure of interested groups
The successful bidder shall be the bidder with lowest evaluated tender cost
No negotiation shall be held with the lowest bidder or any other bidder
Successful bidder shall not be selected through a lottery
The tender evaluation committee shall submit the tender evaluation report for award of contract
Prior to the expiration of Limited time the period of tender validity a procuring entity shall notify the successful bidder If the successful tender fails to sign the contract or perform, the procuring entity shall select a bidder from the remaining bidders
C.
Cost estimates and financing plan COST ESTIMATES (Lakh Taka) Item
1. Consultants a. International consultants b. Domestic consultants
Government 30.00 50.00
Donors 0.00 0.00
Total cost 30.00 50.00
91
Bangladesh
Item
Government
2. Equipment and software a. Equipment b. Software
Donors
Total cost
101.19 100.00
0.00 0.00
101.19 100.00
3. Buildings and furniture a. Building b. Furniture
20.00 10.00
0.00 0.00
20.00 10.00
4. Training, seminars and conferences
30.00
0.00
30.00
5. Research, development and surveys
15.00
0.00
15.00
6. Miscellaneous administration and support costs
10.00
0.00
10.00
7. Contingencies
10.00
0.00
10.00
376.19
0.00
376.19
Total
bidder whose bid is technically responsive and offers the lowest price. D.
Implementation arrangements
The Cabinet Division will implement the project. The Government of Bangladesh will bear the cost of the project. Unless the Government decides otherwise, bidders shall not be excluded from participation in public procurement on the basis of nationality, race or any other criterion. IV.
BENEFITS OF THE PROJECT
The Government will achieve efficiency and economic growth in procuring goods and services through fair and open competition. The project will then be replicated by other ministries, divisions and departments.
92
Cambodia
Title:
E-procurement in Cambodia
Proposer:
Mr. Ly Narith, Deputy Director, International Telecommunication Department, Ministry of Posts and Telecommunications
Country:
Cambodia
Date:
June 2005
I.
INTRODUCTION
To facilitate fast paced growth of ICT industry in the country, Cambodia set up the National Information Development Authority in August 2000 under the chairmanship of the Prime Minister. The Government has introduced e-government aimed at: promoting efficient and cost effective government; facilitating more convenient government services; allowing more public access to information; and making the government more accountable to citizens. E-government programmes have been installed in 24 ministries, 6 districts, and 76 communes in Phnom Penh city. The Government has drafted an e-commerce law which embraces regional electronic payment arrangements, taxation and other cross-border jurisdiction issues. II.
ISSUES
Three decades of armed conflict destroyed the majority of the information and communication infrastructure including loss of skilled personnel, especially educated mid-level professionals and technicians. Presently, ICT services are available only in populated urban areas. Major constraints on the development of ICT are limited infrastructure, low IT literacy rate and lack of financial resources. ICT is at a low level both in the public and private sectors due to inadequate ICT policies and regulations. The number and frequency of Internet usage among the government is low and Internet access throughout the country is limited. III.
PROPOSED PROJECT
A.
Purpose and output
Two different types of procurement procedures are employed which creates a degree of uncertainty among government agencies and bidders. Therefore, there is a need to establish one comprehensive national eprocurement strategy that will replace the paper based procurement system. The objective of the proposed project is to develop a comprehensive national strategic plan for e-procurement that can be used as a basis for the transition period to e-procurement and provide clear functions for each involved agency. Moreover, the project will attempt to coordinate the efforts of all stakeholders and minimize duplication through more efficient planning and communication.
93
Cambodia
B.
Methodology and key activities The project will consist of four components: (i)
Draft e-procurement legislations;
(ii)
Adopt a national e-procurement strategy;
(iii)
Capacity building on e-procurement; and
(iv) Public awareness on e-procurement C.
Cost estimates and financing plan COST ESTIMATES (US$ thousands) Item
Donors
Government
Total cost
1. Consultants a. International consultants b. Domestic consultants c. International and local travel
540.0 90.0 40.0
0.00 0.00 0.00
540.0 90.0 40.0
2. Equipment and software a. Equipment b. Software
70.0 60.00
0.00 0.00
70.0 60.0
3. Buildings and furniture a. Building b. Furniture
150.0 35.0
15.0 3.5
165.0 38.5
4. Training, seminars and conferences
80.0
0.00
80.0
5. Research, development and surveys
120.0
0.00
120.0
6. Miscellaneous administration and support costs
300.0
30.0
330.0
7. Contingencies
154.0
0.00
154.0
8. Reports and communications
15.0
5.00
20.0
9. Renumeration of counterpart staff
20.0
20.0
40.0
10. Administrative support services Total
D.
45.0
4.0
49.0
1,719.0
77.5
1,796.5
Implementation arrangements
At the national level, a steering committee will be composed of the Ministry of Economic and Finance, Ministry of Posts and Telecommunications and all line ministries. The project steering committee will be coordinated by selected ICT advisors. The Project Implementation Unit (PIU) will be established to manage and implement the project. The PIU will be responsible for: (i) 94
Project planning and coordination at the central level and coordination of activities being carried out by participating provinces;
Cambodia
(ii)
The production and updating of the project optional manual and technical guidelines; (iii) All project-wide aspects of procurement and disbursement, and the implementation of monitoring and evaluation activities; (iv) Preparation of the implementation reports and annual/semiannual work plans; and (v) Design of training programmes for the staff and stakeholders. E.
Benefits of the project The project will produce the following substantial benefits: (i)
Backbone for this sector to grow: Well-written procurement policies and strategies will provide a clear guideline for developing the area and reducing overlapping activities to improve efficiency in the government; (ii) Capacity building: Staff will be able to move from paper-based process to digital tools; (iii) Awareness: People will be well informed about e-procurement policies and strategy; (iv) Share important information with people and organizations in Cambodia and the world; (v) Joint mailing list for sharing views and information on important development topics; and (vi) Promote knowledge. Project framework Design summary
Performance targets/indicators
Data sources/ reporting mechanism
Assumptions and risks
Goal Use as basis to trans-form present system to eprocurement and to sequence and coordinate the efforts of policy makers and all stakeholders
Degree of implementation adopted e-procurement policies and comprehensive national e-procurement
Progress reports Review of draft models by government and TA team
Strong government ownership of the strategy
Purpose Adopted and nation-wide recog-nized e-procurement policies and a comprehensive
Conducive e-procurement policies for e-procurement to grow
Review project completion reports Review progress
Government approves e-procurement policies and a comprehensive national strategy
95
Cambodia
Design summary
Performance targets/indicators
Data sources/ reporting mechanism
e-procurement strategy Improved staff capacity and informed public on e-procurement Outputs Accepted best practice e-procurement policies Well guided comprehensive e-procurement strategy E-procurement training of about 120 people from departments of the Ministry of Economy and Finance and other line ministries Awareness on e-procurement
Assumptions and risks
All executing agencies understand e-procurement
Draft e-procurement policies
First draft comprehensive national e-procurement strategy Schedule of the training courses and the availability of curriculum
Level of awareness on e-procurement
Consultation workshops and review of e-procurement policies and comprehensive national e-procurement strategy
The government is willing to change the present system to e-procurement system
Consultation workshops with stakeholders and government
The government is willing to adopt and accept and implement the training plan
List of participants approved by the government
The government will be able to retain the trained staff
Activities with milestones E-procurement policies are adopted – Study existing legal framework of procurement and current e-procurement policies in countries with similar situation to Cambodia – Discuss policies drawn from other countries – Draft appropriate policies for e-procurement for growth E-procurement strategy is adopted – Draft e-procurement development stages to be proposed – Draft e-procurement strategy Capacity building – Prepare training materials to train staff – Enhance the skills on e-procurement to be ready for transforming the present system to e-procurement with emphasis on training of trainers Public awareness on e-procurement – Conduct a seminar on e-procurement – Public campaign on e-procurement Inputs Consultation with:
96
Government, ADB, World Bank, beneficiaries and the private sector
Cambodia
Title:
E-procurement readiness in Cambodia
Proposer:
Mr. Huot Vathna, Deputy Director, Department of Public Procurement, Ministry of Economy and Finance
Country:
Cambodia
Date:
June 2005
I.
INTRODUCTION
Cambodia employs a traditional paper-based procurement system and has not transformed it into an advanced system such as e-procurement. An e-procurement system that meets the development needs of the country and reduces opportunities for corruption is urgently needed. To facilitate fast paced growth of ICT industry in the country, Cambodia set up a National Information Technology Development Authority (NiDA) in August 2000 under the Chairmanship of the Prime Minister. After establishing NiDA, the government has introduced e-government system aimed at (i) promoting efficient and cost-effective government; (ii) facilitating more convenient government services; (iii) allowing greater public access to information; and (iv) making government more accountable to citizens. Recently, e-government is being carried out in Cambodia. A payroll system, land registration, vehicle registration, real estate registration, and an electronic approval system have been put into effect. Meanwhile, the private sector and civil society have been equipped with information technology for their own activities. II.
ISSUES
E-procurement in Cambodia is in the initial stages of development and currently there are two different procurement procedures being used for projects financed by International Financial Institutions (IFI) and the government. This creates a degree of uncertainty not only in the government agencies, but also for bidders of government contracts. Recently, the Government has implemented the Public Financial Management (PFM) reform programme, amended the sub-decree on public procurement and harmonized standard operating procedures to be in line with international standards. In the near future, a standardized procurement law and a backbone for implementing e-government procurement (e-GP) will be put into place. III.
PROPOSED PROJECT
A.
Purpose and output
The main objective of the project is to make a transition to eprocurement in a suitable manner. It will assist a jurisdiction to determine the degree to which the components and their subcomponents, which underlay e-GP, are in place. Readiness is classified into four levels that will
97
Cambodia
be used for the assessment. B.
Methodology and key activities The readiness is classified into four levels: (i)
None: there is no evidence that components are being addressed and supported;
(ii)
Small degree: there is little evidence that components are being addressed and supported;
(iii)
Some degree: there is some evidence that components are being addressed and supported; and
(iv) Adequate degree: there is adequate evidence that components are being addressed and supported. Each level of readiness is expressed in two parts. The first part examines the degree to which the subsistence of the subcomponents is in place and the second part looks at subcomponents assigned within each component may range. C.
Cost estimates and financing plan
The total cost of e-procurement readiness is estimated at US$ 715,000, of which US$ 415,000 is the foreign exchange cost and US$ 300,000 is the local currency cost. The Government requests ADB to finance US$ 515,000 and the Government will finance US$ 200,000 in local COST ESTIMATES (US$ thousands) Item
Foreign exchange
Local currency
Total cost
330.00 0.00 20.00
0.00 90.00 3.00
330.00 90.00 23.00
10.00 0.00
0.00 0.00
10.00 0.00
3. Training, seminars and conferences
0.00
52.00
52.00
4. Research, development and surveys
40.00
0.00
40.00
5. Miscellaneous administration and support costs
0.00
10.00
10.00
6. Reports and communications
5.00
15.00
20.00
40.50
14.50
55.00
445.50
184.50
630.00
A. Donor financing 1. Consultants a. Remuneration and per diem – International consultants – Domestic consultants b. International and local travel 2. Equipment and software a. Equipment b. Software
7. Contingencies
98
Sub-total (A)
Cambodia
Item
Foreign exchange
Local currency
Total cost
B. Government financing 1. Buildings and furniture a. Buildings b. Furniture
0.00 0.00
45.00 7.00
45.00 7.00
2. Remuneration and per diem of counterpart staff
0.00
40.00
40.00
3. Administrative support services
0.00
30.00
30.00
Sub-total (B) Total
0.00
122.00
122.00
445.50
306.50
752.00
currency. D.
Implementation arrangements
The Executing Agency will be the Ministry of Economy and Finance (MEF) and all activities will be implemented through the MEF, the Department of International Cooperation (DIC) and the Department of Public Procurement (DPP). A technical advisory (TA) steering committee will be established. Under the steering committee, a working group will coordinate with consultants during the implementation of TA activities. The members of the steering committee and the working group will comprise of officials from DIC, DPP, Project framework Design summary Goal Understand readiness capacity level for carrying out e-procurement
Purpose Identify current situation and needs for TA Services and to figure out expectation from the related system development Define strong and weak point of infrastructures
Performance targets/indicators
Data sources/ reporting mechanism
Assumptions and risks
Infrastructure of: Conduct survey IT development; legal framework; and leadership policy
Level of cooperation from government and stakeholders Availability of data and data quality
Conduct survey
Level of cooperation from government and stakeholders Level of commitment from government
Measure e-procurement readiness Define key issues Recommend guidelines for e-procurement readiness Leadership Infrastructures Government commitment
99
Cambodia
Design summary Outputs Set up criteria base on e-procurement Suggest practical ways of capabilities in e-procurement Figure out a roadmap to e-procurement Increase understanding and partnership Formulate questionnaire on: IT infrastructure and legislation
Performance targets/indicators Draft of questionnaire of readiness of e-procurement framework Draft of level of awareness on e-procurement Schedule of survey
Data sources/ reporting mechanism Consultation with stakeholders and government
Assumptions and risks Level of cooperation from stakeholders and government Availability of data and data quality
Activities with milestones E-procurement policies are adopted – Study existing legal framework of procurement and current e-procurement policies in countries with similar situation to Cambodia – Discuss policies drawn from other countries – Draft appropriate policies for e-procurement E-procurement strategy is adopted – Draft e-procurement development stages to be proposed – Draft e-procurement strategy Capacity building – Prepare training materials to train staff – Enhance IT skills with an emphasis on training of trainers Public awareness on e-procurement – Conduct a seminar on e-procurement – Public campaign on e-procurement Inputs Consultation with: Government, ADB, World Bank, beneficiaries and the private sector
and the Ministry of Post and Telecommunication (MPTC). IV.
BENEFITS OF THE PROJECT
The project will produce substantial benefits: backbone for establishing e-procurement legislation, policies and strategies; economic competition; and transparent governance free from corruption.
100
Cambodia
Title:
Enabling e-procurement environment in Cambodia
Proposer:
Mr. Yi Sokthearith, Deputy Chief, Department of Investment and Cooperation, Ministry of Economy and Finance
Country:
Cambodia
Date:
June 2005
I.
INTRODUCTION
The Government of Cambodia has become increasingly aware of the strategic importance of ICT and is trying its best to bridge the digital divide by taking a major step to formally commit itself to the e-ASEAN Framework Agreement of 1999. To facilitate fast paced growth of ICT industry in the country, Cambodia set up a National Information Technology Development Authority (NiDA) in August 2000 under the Chairmanship of the Prime Minister. After establishing NiDA, the Government has introduced an e-government system aimed at (i) promoting efficient and cost-effective government; (ii) facilitating more convenient government services; (iii) allowing greater public access to information; and (iv) making government more accountable to citizens. Cambodia has not yet adopted an advanced electronic procurement system. However, e-procurement can be successfully implemented in the near future once legislation, regulations infrastructure and institutional capacity building have been established. II.
ISSUES
Although ICT was introduced many years ago in Cambodia, the Internet penetration rate remains low and progress towards e-government has been constrained by numerous factors, which include: lack of proper ICT policies; underdeveloped telecommunication infrastructure; and lack of IT skills and personnel. The change to a modern procurement system is largely dependent upon replacing the paper-based procedures and modifying existing legislation, policies, strategies, regulations, and processes. E-procurement can be implemented in the near future if there is strong commitment from the Government and a comprehensive national plan for this area to grow. There is also a need to adopt conducive e-procurement policies; draft e-procurement legislation; build capacity of line ministries; and educate the public and private sector on the use of e-procurement. III.
PROPOSED PROJECT
A.
Purpose and output
The main objective of the project is to build a conducive environment for an e-procurement system to be developed and sustained in the long
101
Cambodia
term. A conducive environment requires legislation on procurement and IT; and capacity building of government officials and civil society. B.
Methodology and key activities
The project will have four components: (i) formulate e-procurement policies (ii) comprehensive national e-procurement planning; (iii) standardize procedures in line with UNCITRAL; (iv) capacity building for the Department of Public Procurement and the Department of Investment and Cooperation on e-procurement; and (v) public education on e-procurement. Project framework Design summary Goal Used as backbone to transform present system to e-procurement and to give a clear aspect on e-procurement
Purpose Rationalized e-procurement policies and standardized e-procurement law in line with internationally accepted laws Improved staff capacity in understanding e-procurement policies, planning, law and IT skills needed for carrying out e-procurement Public education on e-procurement
102
Performance targets/indicators
Data sources/ reporting mechanism
Assumptions and risks
Fast pace of adopting e-procurement policies, comprehensive national e-procurement planning and e-procurement, and law
Progress reports Review of draft models by Government and the team
Strong Government ownership of the strategy
Clear stages of e-procurement implementation, conducive policies and a well written law in line with internationally accepted standard Government officials and private sector staff are ready to transform the present system to an e-procurement system
Review project completion reports Progress review Interview report
Government approves e-procurement policies, comprehensive e-procurement planning and law
Level of understanding of the public on e-procurement policies and law
All line ministries and stakeholders have a consensus on e-procurement policies, law and comprehensive planning
Cambodia
Design summary
Performance targets/indicators
Data sources/ reporting mechanism
Assumptions and risks
Outputs Accepted best The government is Draft e-procurement Consultation practice willing to change workshops, review policies e-procurement the present system of e-procurement policies to e-procurement policies and system Draft comprehensive comprehensive Well guided national national comprehensive The government e-procurement e-procurement e-procurement is willing to adopt, strategy planning and law planning accept and implement the Consultation Schedule of the Models for training plan training courses and workshops with e-procurement stakeholders and the availability of The government E-procurement government curriculum will be able to training of about retain the trained List of participants 120 people from staff approved by the departments of the government Ministry of Economy and Finance and other line ministries Level of awareness on e-procurement Awareness on e-procurement Activities with milestones E-procurement policies are adopted – Study existing legal framework and e-procurement policies in countries with similar situation to Cambodia – Discuss policies drawn from other countries – Draft appropriate policies for e-procurement Comprehensive e-procurement planning and law are adopted – Discuss draft e-procurement development stages to be proposed – Draft e-procurement strategy Capacity building for Department of Public Procurement and Department of Investment and Cooperation – Prepare training materials to train staff – Enhance IT skills with an emphasis on training of trainers Public awareness on e-procurement – Conduct a seminar on e-procurement – Public campaign on e-procurement Inputs Donors: • Two international consultants (US$ 580,000) • Four domestic consultants (US$ 188,000) • Training, seminar, and public awareness (US$ 100,000) • Equipment (US$ 15,000) Government: • Counterpart staff (US$ 60,000) • Office accommodation (US$ 60,000) • Administrative support (US$ 30,000)
103
Cambodia
C.
Financing plan
The total cost of the project is estimated at US$ 1,178,000, of which US$ 717,200 is the foreign exchange cost and US$ 461,300 is the local currency cost. The government requests donors to finance US$ 1,028,500 and the government will finance the balance of local currency equivalent to US$150,000. COST ESTIMATES (US$ thousands) Item
Foreign exchange
Local currency
Total cost
540.00 0.00 40.00
0.00 144.00 4.00
540.00 144.00 44.00
15.00 0.00
0.00 0.00
15.00 0.00
3. Training, seminars and conferences, public awareness
0.00
100.00
100.00
4. Research, development and surveys
50.00
0.00
50.00
5. Miscellaneous administration and support costs
0.00
15.00
15.00
6. Reports and communications
7.00
20.00
27.00
65.20
28.30
93.50
717.20
311.30
1,028.50
0.00 0.00
50.00 10.00
50.00 10.00
2. Remuneration and per diem of counterpart staff
0.00
60.00
60.00
3. Administrative support services
0.00
30.00
30.00
Sub-total (B)
0.00
150.00
150.00
717.20
461.30
1,178.50
A. Donor financing 1. Consultants a. Remuneration and per diem – International consultants – Domestic consultants b. International and local travel 2. Equipment and software a. Equipment b. Software
7. Contingencies Sub-total (A) B. Government financing 1. Buildings and furniture a. Buildings b. Furniture
Total
D.
104
Implementation arrangements
The Ministry of Economy and Finance will be the Executing Agency. All the activities of the project will be implemented through the Department of International Cooperation (DIC) and the Department of Public Procure-
Cambodia
ment (DPP). Thee director of DIC will supervise day-to-day activities of the project. A project steering committee will be established for overall supervision and coordination of the project. Under the steering committee, there will be a working group that will coordinate with consultants in implementing the project activities. The members of the steering committee and the working group will comprise of officials from DIC, DPP, and the Ministry of Post and Telecommunication (MPTC). IV.
BENEFITS OF THE PROJECT The project will produce substantial benefits: (i)
Backbone for this sector to grow – well written procurement policies, comprehensive e-procurement planning, and e-procurement law will provide clear guidelines for developing the area and reduce the overlapping activities to improve efficiency in the government;
(ii)
Capacity building – staff will be able to move from paperbased process to digital tools;
(iii)
Legal framework will provide a conducive environment for eprocurement to be sustained in the long term; and
(iv) Awareness – people will be well informed about e-procurement policies and strategy.
105
China
Title:
Developing e-GP strategy in China
Proposer:
Ms. Tang Beibei, Senior Staff Member, Treasury Department, Ministry of Finance
Country:
China
Date:
June 2005
I.
INTRODUCTION
China established the government procurement system in 1996 and the Government Procurement Law (GPL) was issued in June 2002. With the enforcement of the GPL, the scope of government procurement has extended and the amount of government procurement has rapidly augmented. In order to improve the efficiency and transparency of government procurement activities and strengthen the administration, the Ministry of Finance (MOF) decided to establish a nation-wide e-GP system, and has conducted trial uses of the system. II.
ISSUES
• • • • • • • •
Lack of awareness on the benefits of government procurement Limited operational integrity of system Lack of expertise Absence of regulatory and legal framework Security and privacy is not ensured Lack of standards Underdeveloped infrastructure Paper-based procurement system
III.
PROPOSED PROJECT
A.
Purpose and output
An overall assessment of the e-GP status in China will be carried out to identify the current status of legal, regulatory, and technical aspects. After such assessment, a draft e-GP strategy including a master action plan will be formulated based on nation-wide consultation and relevant international experience. B.
106
Implementation arrangements and key activities
The Ministry of Finance will oversee implementation of the project. The project is based on relevant international experience and the best practices in worldwide e-GP development. The objective is to formulate a strategy and regulatory framework for national e-GP development. A technical advisory service including seminars, training, and consulting will be needed and appreciated. The duration of the technical advisory service is
China
approximately one or two weeks. The expected outputs are: (i) formulation of a national strategy of e-GP development; (ii) improvement of legal and regulatory framework for e-GP development; and (iii) formulation of national technical guidelines for e-GP development. Project framework Design summary Impact To strengthen the research and planning of e-GP, to build an interactive mechanism between the GP and e-GP development Outcome To further improve the formulation of a national strategy for e-GP development
Performance indicators/targets
Monitoring mechanisms
Assumptions and risks
Formulation of a national strategy for e-GP development
Conducive Make the schedule of e-GP development environment for e-GP
National Survey Assessment on the current status
Timely reports
Policy and laws framework
Draft e-GP strategy
Outputs Instructive experience Increased coordination of GP system between government Consummate institutions legitimacy for e-GP
Leadership
Social and cultural Technology Consultative meetings
Leadership
Timely reports
Technology
Policy and laws
Surveys
Strengthen IT infrastructure Activities Strengthen GP system Assess the status in China
Cooperation from all sections
Timely reports Step-by-step process from beginning to completion
Research best practices in e-GP development Research efficient GP network management Reform and modify current laws Formulate laws for customer recognition, transaction payments, security and privacy
107
China
Design summary
Performance indicators/targets
Monitoring mechanisms
Assumptions and risks
Develop IT infrastructure Develop related electric safety technology Inputs Government leadership and financing ADB assistance in form of technical advisory service Co-financing Support and publicity from beneficiaries Private sector participation
IV.
BENEFITS OF THE PROJECT
The project is expected to yield numerous benefits: (i) formulation of a national strategy for e-GP development; (ii) improve legal and regulatory framework for e-GP development; (iii) enable the installment a nation-wide e-GP platform; and (iv) enhance public awareness of government procurement.
108
China
Title:
Developing e-GP strategy in China
Proposer:
Mr. Zhang Hang, Senior Staff Member, Treasury Department, Ministry of Finance
Country:
China
Date:
June 2005
I.
INTRODUCTION
China established the government procurement system in 1996 and the Government Procurement Law (GPL) was issued in June 2002. China acknowledges the effect and potential benefits of ICT for reforming government administration and services. In order to improve the efficiency and transparency of government procurement activities and strengthen the administration, the Ministry of Finance (MOF) has agreed to begin developing an e-GP system. II.
ISSUES
The government procurement law has been in place for only two years, thus China is in the initial stages of development. Further progress is needed so that e-procurement can serve as a means to prevent corruption and stimulate economic growth and savings. However, several issues need to be addressed including:
• • • • •
Modify existing contract law Formulate new laws to establish a secure online environment Lack of management standards Underdeveloped infrastructure Paper-based procurement system
In addition to these critical issues, there is a lack of awareness and understanding about e-GP among the public and political leaders. The media has been active in releasing information about the significance and benefits of e-procurement. The traditional operating environment of government procurement is based on a complicated management framework. Online procurement system will enhance transparency, efficiency and encourage participation of local enterprise. III.
PROPOSED PROJECT
A.
Purpose and output
The country lacks a well-defined national strategy to guide nationwide efforts in e-GP development. Under this component, an overall assessment of the e-GP status in China will be carried out to identify major weaknesses in legal, regulatory, monitoring, and technical aspects. After
109
China
such an assessment, a draft e-GP strategy including a master action plan will be formulated based on nation-wide consultation and relevant international experience. The draft strategy will define the requirements for integration between the national e-GP platform and selected provinces. Realizing the absence of a legal enabling environment for e-procurement, the Government of China has initiated reforms. The Law of esignature has been approved by the National People’s Congress and will become effective on 1 April 2005. In order to legally enable e-GP activities, MOF will propose a draft amendment to the Government Procurement Law for endorsement by the State Council and final approval by the National People’s Congress. In addition, MOF has identified the need to formulate regulations for administering and monitoring nation-wide e-GP activities. E-GP websites have been developed without a set of nationally unified technical standards and guidelines resulting in technical hurdles in forming a nationally integrated e-GP platform. National standards are also required to ensure confidentiality, security, transparency and fairness of online business transactions. Under this component, MOF will draft technical guidelines for e-GP development based on a nation-wide survey and consultation, taking into account the latest internationally available technologies. The draft guidelines, once approved, will form a solid basis for development of national technical standards. Following the outcomes achieved in the above components, the public and business communities will be well informed of the objectives and the access to legal and regulatory procedures of e-GP activities. Training will be provided to staff of government procurement entities and procurement agents. B.
Implementation arrangements
The Ministry of Finance is responsible for developing policies and guidelines for e- procurement. The project requires consultant inputs, especially for the development of strategy and standards. The development of the strategy will take approximately six months, including local and international experience learning, legal advice and development of standards. IV.
BENEFITS OF THE PROJECT
• • • • 110
Legal framework for procurement system established ICT infrastructure upgraded Standards for e-procurement achieved Transparency, efficiency and economic competitiveness improved
China
Project framework Design summary Impact Promote e-government procurement
Outcome Enhance the efficiency, economy and transparency of procurement system Improve the legal and regulatory framework of government procurement through e-GP development Outputs Formulate national e-GP development strategies and regulatory framework for e-GP in phases from piloting in selected provinces scaling-up to nation-wide, as well as implementation framework including institutional arrangements
Performance indicators/targets
Monitoring mechanisms
Assumptions and risks
Successful e-procurement system including e-purchasing and e-tendering
Review by domestic and international organizations
Integration with other systems
A system that can collect and provide data efficiently and accurately
System evaluation by other department
Efficient feedback from public and private sectors
A consummated legal system
Survey Establishment of legal consultant group
A strategy to Consultative meeting integrate nation-wide Timely reports system/standards of Survey the core system
Coordination among government agencies Confidence of both private and public sectors Resistance by other departments or agencies System obsolescence
Develop an e-GP platform in line with the latest technology available internationally, initially by establishing the Government Procurement web portal Build e-GP capacity at both provincial and national levels
111
China
Design summary Activities Assess current status of e-GP in China Draft the national strategy of e-GP development Draft legal framework and propose to the People’s Congress Training at both provincial and national levels Enhance public awareness Inputs Consultants, equipment hardware, buildings furniture
112
Performance indicators/targets
Monitoring mechanisms
Assumptions and risks
India
Title:
Standardization of e-procurement at the national level
Proposer:
Mr Ramanathan Somasundaram, Project Manager, e-Procurement, National Institute for Smart Govern-
ment Country:
India
Date:
June 2005
I.
INTRODUCTION
The proposed project deals with preparing the nation to operate as a single unit in public procurement related matters. In recent years, a few of the 28 State governments, 6 Union Territories and about 250 Public Sector Enterprises have carried out the following initiatives: enacted legislation on public procurement (Transparency in Public Procurement Act enacted by the States of Karnataka and Tamilnadu); implemented e-procurement (The State of Andhra Pradesh and Indian Railways); and reengineered procurement procedures (The State of Karnataka) Due to the positive publicity generated by the successful implementation of e-procurement in the Government of Andhra Pradesh (GoAP), many governmental organizations in India are taking efforts to replicate the success. The implementation of e-procurement provides government organizations an opportunity to thoroughly rethink all aspects of their procurement activities such as procurement procedures, forms used, financial authority, collection of tender and Earnest Money Deposit (EMD). Many of the government organizations that implement e-procurement take this opportunity seriously and rethink their practices. The National Institute for Smart Government (NISG), a not-for-profit body constituted by State and Central Governments in India and National Association for Software and Service Companies (NASSCOM), is employed by a few State government organizations for support in their e-procurement implementation effort. II.
ISSUES
Although reengineering occurs during the implementation of e-procurement at the state/organization/agency level, there is not yet a concerted effort to conceptualize, architect and design a national initiative to implement e-procurement. Due to the lack of a national initiative, much work done at the state level is duplicated elsewhere in the country such as the following: (i) (ii) (iii) (iv) (v)
Registration of suppliers; Issuance of digital certificates to supplier community; Procurement process reengineering; User interface reengineering; and Enactment of legislation.
113
India
The efficiency and effectiveness of public procurement operations in the country will improve significantly when duplicative efforts are eliminated. Since India has not had a central procurement agency, there is not an organization responsible for planning and implementing public procurement reform at the national level. The World Bank in its report on the state of public procurement in India has highlighted the need for constituting a national procurement agency. As of now, a few government agencies in India are acting independently to implement e-procurement. Considering the trend, it is reasonable to assume that many more will implement e-procurement in the near future. When such happens, islands of e-procurement infrastructure will result. In order to obtain an integrated view of public procurement in the country, there is a need to interconnect the many islands and make them interoperable through the use of technology standards. Indian governmental agencies are commonly partnering with private agencies to implement e-procurement. The use of private-public-partnership (PPP) for implementing e-procurement is advantageous in that the private partner burdens some of the risk and responsibilities of the project. However, as the project progresses, the government becomes increasingly dependent on the e-procurement solution provided by the private partner. One of the exiting options is to purchase the system from the vendor for a fee that is agreed upon while defining the partnership, which however has its drawbacks. If the government chooses to purchase the system, then it has to find a new way to obtain upgrades or it runs the risk of holding on to an outdated system. It is therefore critical for government agencies to take advantage of PPP with the option of exiting the partnership without much difficulty. III.
PROPOSED PROJECT
A.
Purpose and output
The purpose of the project is to create an environment where public sector agencies in India will procure works, goods and services in a standardized manner. The implementation of the proposed project will result in the following: (i) (ii)
(iii) 114
Procurement procedures are harmonized; Standardized forms using XML schemas and document-type definition (DTD) (involves forms reengineering at the field level) are developed; Technology standards that are to be adhered by government agencies implementing e-procurement in the country are developed;
India
(iv) A centralized supplier registry is developed; (v)
A central procurement agency is constituted and its roles and responsibilities are defined; and
(vi) A draft legislation specific to e-procurement is prepared. B.
Methodology and key activities
External consultants will provide the expertise and man-power for tactical and operational work. The strategic direction will be provided by the National Institute for Smart Government (NISG). NISG takes responsibility for ensuring high quality outputs. Three main activities are required to implement the project. These are:
C.
(i)
A detailed study of “as is” and “to be” processes in 28 States, 6 Union Territories and over 250 public sector enterprises;
(ii)
A review of technology standards and e-procurement specific legislation adopted by government agencies worldwide; and
(iii)
The constitution of a central procurement agency and organization for centralized registration of suppliers.
Cost estimates and financing plan The figures mentioned below are tentative. COST ESTIMATES (US$ thousands) Item
1. Consultants a. International consultants b. Domestic consultants
Government
Donors
Total cost
0 0
250 750
250 750
100 0
250 750
350 750
3. Buildings and furniture a. Building b. Furniture
0 0
250 250
250 250
4. Training, seminars and conferences
0
500
500
5. Research, development and surveys
0
500
500
6. Miscellaneous administration and support costs
0
500
500
7. Contingencies
0
500
500
100
4,000
4,100
2. Equipment and software a. Equipment b. Software
Total
115
India
D.
Implementation arrangements
There is currently no national procurement agency to effectively oversee public procurement in India. The National Institute for Smart Government (NISG) NISG will implement the proposed project. The National Institute for Smart Government (NISG) in India is developing expertise in the public procurement domain and in the implementation of eprocurement from consultancy work; Conceptualize, Architect, Design and Support (CADS) methodology. As of now, NISG is working with three State governments in the implementation of single, unitary, State-wide eprocurement systems. The actual implementation of the project will be managed with a multi-tiered project implementation organization. The organization would have an empowered committee to take strategic decisions, a task force to work at the tactical level and NISG as the nodal agency coordinating the implementation of the project. The empowered committee will have highlevel officials from relevant governmental bodies such as the Ministry of Finance, Directorate General of Supplies & Disposals (DGS&D) (an agency that centrally negotiates frame agreements for the procurement of goods), Department of IT and informed officials. The project can be completed in 12 months time. IV.
BENEFITS OF THE PROJECT
The implementation of the proposed project will result in the following benefits:
116
•
Supplier community will be able to access tender opportunities advertised by all public sector agencies from one location. This enhanced transparency and easy access will result in increased competition for public sector tenders
•
The constitution of a national procurement agency will help in guiding the continuous improvement of public procurement practices in India
•
The drafting of legislation specific to electronic government procurement serves as a reference in case disputes arise
•
When a centralized supplier registry is developed, suppliers have to register only once with the government and not individually with each public sector agency. The centralized registration also helps government in monitoring the performance of suppliers
•
The streamlining of diverse procurement procedures and contract clauses enables suppliers to respond to procurement advertisements with confidence
India
Project framework Design summary Impact
Performance indicators/targets Satisfied public Faster implementation of public works projects
Outcome
Monitoring mechanisms Time taken to implement public works projects
An overview of public procurement activities nationally
Ability to prepare reports on public procurement at the national level
Enhanced efficiency and effectiveness in public procurement
Increased number of bids in response to a tender Lower bid prices Faster implementation of projects
Outputs
Increased adherence to technology standards
Number of e-procurement initiatives adopting the technology Increased adoption of reengineered forms standards and reengineered forms and re-engineered processes Constitution of a central procurement agency Development of a central supplier registry
Number of suppliers in the central supplier registry
Assumptions and risks The implementation of e-procurement will enhance efficiency and effectiveness in public procurement
The implementation of e-procurement will increase the number of bids received and due to competition reduce bid prices The development of reengineered processes and forms will result in their adoption The constitution of a central procurement agency is feasible Companies might choose not to adhere to the technology standards and reengineered forms Lack of co-operation among agencies in the constitution of central procurement agency
Inputs Government, ADB Co-financing, beneficiaries, private sector, consultants
117
Indonesia
Title:
Development of electronic government procurement
Proposer:
Mr. Bonifasius Wahyu Pudjianto, Head, Sub-Division for E-procurement Application Development, Ministry of Communication and Information
Technology Country:
Indonesia
Date:
June 2005
I.
INTRODUCTION
Indonesia should take necessary steps to improve government services and promote good governance. Presidential Decree No.3/2003 was promulgated in June 2003 with the aim of furthering e-government services. The Decree states that e-procurement is a basic application of e-government and will have significant impacts on all government aspects including the private sector, industry and society. In January 2004, the Government of Indonesia conducted a survey with the aim of establishing an e-procurement system for all central government ministries as well as local governments. A presidential decree for the development of government procurement is scheduled to be promulgated in 2005. In order to enhance transparency, efficiency, and accountability in the procurement process, the Department of Communication and Information Technology planned to transform the manual procurement process into a socalled semi-e-procurement system. In the future, the Department of Communication and Information Technology plans to transform its semi-eprocurement system to a full-e-procurement system. II.
ISSUES
The Government of Indonesia has partially developed an integrated e-GP. However, the following issues need to be resolved:
• • • • •
Absence of policy and legal framework on e-procurement The National Public Procurement Office is still in the process of being formed Low Internet penetration and limited network infrastructure Lack of security and data protection system Human resources and financial constraints
III.
PROPOSED PROJECT
A.
Purpose and output The objectives of the project are to: (i)
118
(ii)
Improve transparency, efficiency, effectiveness and accountability in the procurement process; Reduce procurement costs by establishing an online open bid
Indonesia
system; (iii) Guarantee security and user-friendliness; and (iv) Enhance IT maturity in the relevant public and private sectors through system operation as well as human resources development. The output is the creation of a national electronic government procurement system in the central Government with the following components: a. b. c. B.
Application platform consisting of e-procurement front office and back office; Security platform including PKI platform, data centre service and Digital Resource Connectivity (DRC); and IT platform encompassing capacity building, network and hardware, and a integrated system.
Methodology and key activities
The project will establish a national electronic government procurement system in the central government to become a part of the National Project Framework Strategies
Performance indicators
Monitoring mechanisms
Assumptions and risks
Goal Creating a National Electronic Government Procurement in Central Government
Integrated system for e-procurement services
Inter-Agency coordinating meetings and public private partnership
Political will from President and all cabinet to implement the system
Inter-agency meeting and establishment of memorandum of understanding (MOU) Coordinating meeting
Implementing in central government and gradually extend to local government
Purpose To create transparency, efficiency, effectiveness and accountability in the procurement process
Reduce corruption and increase efficiency in procurement process
Strategies Promote implementation of e-procurement throughout institutions
Awareness on benefits of e-procurement
Enacted cyberlaw, Establishment of governmental policies procurement law and legal framework for e-procurement
Time constrains and political influence
119
Indonesia
Strategies
Performance indicators
Develop organization and human resources
Monitoring mechanisms
Assumptions and risks Defining as a strategic organization and has full authority
Setup organization and human resources in central government
Public Procurement Office. COST ESTIMATES (US$ million) Item
Foreign fund
1. Application a. E-procurement front office b. E-procurement back office 2. E-security platform a. PKI platform, CA certification, regulatory authority (RA) b. Data centre
Total cost
5.00 4.00
0.00 0.00
5.00 4.00
7.50 15.00
0.00 0.00
7.50 15.00
1.00 4.00 2.00
0.00 0.00 0.00
1.00 4.00 2.00
3. Buildings and furniture a. Capacity building b. Network and hardware c. System integration 4. Contingencies Total
Agency
2.00
0.00
2.00
40.50
0.00
40.50
C.
Cost estimates and financing plan
D.
Implementation arrangements
The Department of Communication and Information Technology and the National Development Planning Agency will oversee the implementation of the project in collaboration with other agencies. The Department of Communication and Information Technology will be responsible for system application and platform design, and the National Development Planning Agency will focus on policies and legal framework. IV.
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BENEFITS OF THE PROJECT
• • • •
Transparency and efficiency augmented Delays, potential deviations and corruption reduced Improved credibility and monitoring More effective enforcement and disciplinary process
Indonesia
• • • • •
Cost savings More effective distribution of resources in national economy Enhanced accountability of government Activation of small and medium sized enterprises Accelerate e-commerce, use of e-signature and certification of authority
121
Indonesia
Title:
Technical assistance for strengthening national capacity for the implementation of electronic government procurement (e-GP)
Proposer:
Ms. Sarah Sadiqa, Head, Public & Private Partnership in Infrastructure Division, National Development Planning Agency (BAPPENAS)
Country:
Indonesia
Date:
June 2005
I.
INTRODUCTION
In 2001, the Government of Indonesia established three main agendas for procurement reform, one of which is to develop a concept of electronic government procurement (e-GP) to be implemented in the near future. The development of the e-GP system faces many challenges. One of the leading impediments is the limitation of the ICT infrastructure. Access to computers and the Internet is inadequate, unevenly distributed, and relatively expensive. Based on 2003 data, the penetration of fixed line in Indonesia was only 3.65 per cent followed by penetration of mobile and Internet, which were 5.52 per cent and 3.77 per cent, respectively. Most of the ICT infrastructure, which is about 86 per cent of the total capacities, is located in the western part of Indonesia particularly in Java, Sumatera and Bali. In Jakarta, tele-density has reached 35 per cent, while in other urban areas it is 11-25 per cent, and only 2 per cent in rural areas. In addition to limited infrastructure, skills and capabilities of people to operate computers is low. In order to cope with these obstacles, the Government of Indonesia needs to support and provide assistance to the parties involved in the procurement process such as project managers, tender committees and SME vendors. II.
ISSUES
The western part of Indonesia particularly Java and Sumatera is prepared to implement the e-GP system. However, unlike the western part of Indonesia which developed progressively over the last 25 years, the eastern part of Indonesia is relatively underdeveloped and beset by poverty. Approximately 14 per cent of the total ICT infrastructure of Indonesia is located in the eastern region, and only 10 per cent of the IT literate population resides in this region.
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The Government has directed its development activities towards the construction of roads, bridges, airports, ports, and buildings as well as health facilities and education in eastern Indonesia. A procurement system could play an important role in the region’s development process. Therefore, the efforts towards implementing an e-government procurement system must take into account the challenges and constraints encountered in eastern
Indonesia
Indonesia. The Government should prepare and provide support to the parties involved in the procurement process in eastern Indonesia. Strengthening capacity through certain activities is the key to success for the implementation of e-GP. The proposed project is the technical assistance for strengthening national capacity for the implementation of e-GP. III.
PROPOSED PROJECT
A.
Purpose and output
The objective of the proposed project is to provide technical assistance to the Government of Indonesia for strengthening national capacity in order to implement e-GP. The expected output is the establishment of a pilot model for strengthening national capacity to implementation e-GP. The participants of this proposed project include project managers, tender committees, and SME vendors (selected). The proposed project will be located in selected provinces, prefectures and municipalities in the eastern part of Indonesia. B.
Methodology and key activities The project will consist of the following activities: 1. 2. 3.
C.
Introduction and socialization of the e-GP system; Design a training system; and Design of training modules and materials; training course (pilot project) for project managers, tender committee and vendors of SME in eastern Indonesia.
Cost estimates and financing plan COST ESTIMATES (US$ thousand) Item
Government
Donors
Total cost
1. Consultants a. International consultants b. Domestic consultants
0.0 0.0
000.0 175.0
000.0 175.0
2. Travel, lodging, subsistence
25.0
50.0
75.0
3. Equipment and software
30.0
135.0
165.0
4. Training, seminars and conferences
20.0
50.0
70.0
5. Research, development and surveys
20.0
40.0
60.0
5.0
10.0
15.0
6. Report and materials production 7. Monitoring activities
20.0
40.0
60.0
8. Miscellaneous administration and support costs
0.0
10.0
10.0
9. Contingencies
2.5
10.0
12.5
122.5
520.0
642.5
Total
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Indonesia
D.
Implementation arrangement
The implementing agency of the project would be the Ministry of National Development Planning (Bappenas). IV.
BENEFITS OF THE PROJECT The project is expected to produce the following benefits:
•
Increase the awareness, capability and confidence of project managers, tender committees and vendors of SMEs (in the eastern part of Indonesia) to implement e-GP
•
Prepare the business community to take part in the information society
• • •
Bring e-readiness to the public Implement the e-GP system nation-wide effectively Increase effectiveness and efficiency in the procurement process Project framework
Design summary
Performance indicators/targets
Monitoring mechanisms
Assumptions and risks
Goal The e-GP system is implemented and operated in the eastern and western part of Indonesia
Project managers, tender committee and vendors (SMEs) are capable of using e-GP correctly
Mid-term survey and evaluation of e-GP process by Bappenas, local government institutions and non-governmental organization (NGOs) Published result of evaluation by Bappenas
Purpose To strengthen national capacity particularly project managers, tender committee and SMEs vendors in the eastern part of the country
Projects managers, tender committees and vendors of SME have knowledge and confidence to operate e-GP
Monitoring and evaluation reports conducted by Bappenas, local government institutions and NGOs
An established model for the e-GP programme
Monitoring and evaluation reports prepared by Bappenas, local
Outputs Establishment of a pilot model for strengthening national capacity
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Assumptions: local government in the eastern part of Indonesia supports the project Risk: private sectors does not support the project
Indonesia
Design summary
Performance indicators/targets
Monitoring mechanisms
Replication models for selected regions
government institutions and NGOs
Criteria for regions suitable for the programme
Monitoring and project progress reports
Development of training system, training modules and materials
Monitoring and project progress report
Assumptions and risks
Activities Preparation phase: Selecting regions suitable for the programme Preparing dissemination and socialization materials Preparing system design by reviewing lessons learned and other countries experience Identifying hardware, software, and other equipment System design: Design a training system Design training modules and materials Establishing a pilot model
An established pilot model
Implementing the model
Implementing pilot model
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Lao People’s Democratic Republic
Title:
Financial integrated
Proposer:
Ms. Sifong Oumavong, Deputy Director, International Financial Cooperation Division, External Financial Relations Department, Ministry of Finance
Country:
Lao People’s Democratic Republic
Date:
June 2005
I.
INTRODUCTION
The Lao PDR Government aims to achieve economic growth, reduce poverty and graduate from the least developed country status by 2020. The National Growth and Poverty Eradication Strategy (NGPES) approved by the Government in October 2003 provides a broad strategic framework from which the future growth and poverty reduction programmes will be developed and implemented. NGPES will require public resources to be mobilized, allocated and applied effectively in line with the Government policy and development priorities. The NGPES further emphasizes the need for capacity building in public expenditure management and revenue collection systems at all levels of public administration, including external debt management system. In pursuance of these goals, the Ministry of Finance (MOF) is working closely with the Department of Budget, the Department of External Financial Relations, the Department of Customs and the Department of Tax. Integration of policies, information, and efforts will ensure that all initiatives are in line with the overall objective of the Ministry. II.
ISSUES
The Ministry of Finance recognizes the use of Information Communication Technology (ICT) as a tool to manage public resources. In 2002, the Ministry of Finance requested technical assistance from ADB in establishing the following management systems in the Ministry of Finance:
126
•
Department of Accounting: Government Accounting Systems link between the Ministry of Finance and four Ministries (Ministry of Education, Health, Agriculture and Communication Transport Post and Construction)
•
Department of External Financial Relations: External Debt Management Systems
• •
Department of Customs: Automatic Systems for Customs Data Department of Tax: Tax Collection
However, these systems are not linked to the Ministry of Finance, causing problems in accessing to pertinent information necessary for effective decision making and policy formulation.
Lao People’s Democratic Republic
The proposed project, Financial Integrated, intends to establish a thin network to connect the Ministry of Finance to its attached departments, line agencies and all provincial offices thereafter. Objectives: (i)
Establish a nation-wide electronic linkage among financial sector at both the central and local levels, starting with the Ministry of Finance and its attached departments to line Ministries, for optimum resource and revenue information sharing and therefore serve as a model for government-wide-networking; and
(ii)
Deliver more responsive, efficient, and transparent services to citizens and contribute to economic growth.
The project will focus on the development of public expenditure and revenue management systems. Government will develop appropriate fiscal policies with the aim of increased revenue collection, controlling expenditures and maintaining economic stability. The project will cover the following:
• •
The Ministry of Finance’s network backbone
•
Project monitoring and assessment system
Integrated infrastructure of the line ministries at the central and provincial levels
III.
THE PROPOSED PROJECT
A.
Purpose and outputs
The expected output of the project is a strengthened public expenditure and revenue collation system leading to more efficient, transparent and effective management. Effective implementation of the existing system could potentially yield substantial savings for the national economy. The monitoring system will measure the overall performance and outcomes of all public expenditures. Further, the project will provide an Executive Information System for the Ministry of Finance enabling the high authority of the Ministry to access the necessary information individually and collectively. This project also supports capacity building in budget planning, streamlining budget execution and control, and improving transparency through adequate public disclosure of financial information, and public sector accounting and auditing standards.
127
Lao People’s Democratic Republic
B.
Project framework Strategies
Performance indicators
Monitoring mechanisms
Assumptions and risks
Goal To establish an advanced network interconnecting departments in the Ministry of Finance and all line Ministries at provincial level
Integrated system Interconnection
Inter-agency meetings and establishment of a memorandum of understanding
Purpose Establish a nation-wide electronic linkage among line Ministries, starting with the Ministry of Finance and its Department Deliver a more responsive efficient and effective service to the Lao people leveraging the same to catapult the Lao to a much higher economic growth
Optimum resource, public expenditure and revenue information sharing
Frequency of access being made by the public
Technology should provide a 24 hours 7 days a week service
Confidence of private entity and capacity of government entity
Serve as a model for governmentwide-networking Increased confidence of the public on the use of ICT
Strategies Encourage private sector participation particularly in assessment of technology requirements
Increased coordination between government and private entity
Consultative meetings Timely reports
Increased private investment
Encourage sharing of information amongst the Department and its attached bureaus and agencies
Effective and efficient flow of information
Establishment of research and development (R&D)
Provide information campaign to set the minds of the public on the use of technology
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Public awareness Increased technical capacity to administer system Conducive environment to ICT sector
Surveys
Timing and reliability of information particularly during the initial phase of exchange of information Cooperation of citizens Turn-over of IT professionals Can be apolitical
Lao People’s Democratic Republic
Performance indicators
Strategies
Monitoring mechanisms
Assumptions and risks
Build capacity on IT to government official Review and update necessary laws and legislation to ensure smooth implementation
C.
Cost estimates and financing plan COST ESTIMATES (US$ thousands) Item
Foreign fund
1. Consultants a. International consultants b. Domestic consultants
Agency
Total cost
100 50
0 0
100 50
2. Backbone infrastructure
5,000
0
5,000
3. Development portals (to include system development and other related software)
1,650
0
1,650
4. Training, seminars and conferences
850
0
850
5. Contingencies
450
0
450
8,100
0
8,100
Total
D.
Implementation arrangements
The Ministry of Finance will take a lead role in the implementation of the project. Additional agencies will carry out the implementation, these are: Budget, External Financial Relations, Customs, Tax, and Treasury departments; and line Ministries at the provincial level. IV.
BENEFITS OF THE PROJECT
The benefits of this project will be achieved in the long term. Although initially it will be expensive to construct the backbone infrastructure, it is hoped that the project will lead to an increase in revenue and reduction in corruption.
129
Lao People’s Democratic Republic
Title:
Implementing monitoring system and development strategy plan for moving towards e-GP
Proposer:
Mr. Thone Phonephachanh, Director, Procurement Monitoring Office, Ministry of Finance
Country:
Lao People’s Democratic Republic
Date:
June 2005
I.
INTRODUCTION
In 2004, the Government of Lao PDR took significant steps towards improving the legislative and regulatory framework for public procurement. In 2005, the Government passed a new procurement sub-decree and Implementation Rules and Regulations (IRRs) based on international best practices and issued the charter of the Procurement Monitoring Office (PrMO). Assistance and a grant from the consulting firm, International Development & Finance (IDF), enabled the limited dissemination of the new sub-decree and IRRs; preparation of a harmonized procurement manual and standard bidding documents; and the development of a medium and long term vision for procurement capacity building in the country. This proposal builds directly on the achievements of the previous grants and the next steps of the procurement reform agenda. The proposed grant will help implement the new legal framework established though the previous grant, by establishing institutionalized and structured procurement training programmes in Lao PDR. The proposed grant will also support additional steps that are urgently required in the procurement reform agenda. These will include: development of a monitoring system to measure the performance and outcomes of the procurement framework; establishment of a public procurement bulletin to further promote transparency and disclosure; and development of a long-term strategy for moving towards eprocurement in the country. II.
ISSUES
The objective of the proposed grant is to strengthen the Lao PDR system for public procurement by providing assistance for implementation and monitoring of the recently established procurement framework; and further increase economy, efficiency and transparency in procurement. In order to achieve these objectives, ADB is requested to provide technical assistance in the following areas: 1.
130
System for monitoring and evaluation (M&E)
Establish the conceptual framework, design and pilot a system for M&E for the progress of reforms and the performance and outcomes of the public procurement system in Lao PDR. The M&E system will inform
Lao People’s Democratic Republic
the government and the public about how well the procurement system is functioning and if it is achieving value-for-money. The M&E system would include the establishment of a benchmarking mechanism and link to other cross-cutting systems. Furthermore, the M&E system is expected to make use of the information database of the public procurement bulletin, thereby minimizing duplication of efforts through inter-connectivity. This activity will be carried out by the PrMO with the assistance of consultants and with inputs from key stakeholders including representatives from key line ministries and beneficiaries of the public procurement system. Possible monitoring framework
Indicators
Pillar 1: Legislative and Regulatory Framework
Procurement methods, advertising, evaluation of tender documents, complaint review process, implementing rules and regulations
Pillar 2: Central Institutional Framework and Capacity
Linkage with budget, functional procurement normative body at the centre
Pillar 3: Procurement Operations and Public Procurement Market Performance
Efficient procurement operations and practices, functionality of the public procurement market, contract administration and dispute resolution
Pillar 4: The Integrity and the Transparency of the Public Procurement System
Control, audit, appeals mechanism, access information, ethics and anticorruption measures.
to
2. Build capacity for implementing the new procurement framework The previous grant supported the development and implementation of training programmes for government officials and project staff aimed at dissemination of the provisions of the new procurement decree and IRRs. This activity will focus on the design and implementation of training-oftrainers programmes to develop in-country training capacity which is a prerequisite for institutionalizing structured training programmes. The training of trainers programme will additionally provide assistance for strengthening the PrMO’s capacity to carry out its designated functions and responsibilities. As a first step, a programme of training of trainers will be developed and conducted in order to develop a resource base of procurement training experts within the country. The PrMO will be responsible for managing the programme with the assistance of consultants. The trainers would be selected from government agencies, including PrMO, as well as from academic institutions in order to establish a broad resource base. Once
131
Lao People’s Democratic Republic
trained, they would be available to conduct structured training programmes for government officials and project staff in procurement at selected institutions within the country. Due to resource constraints of this grant, implementation of the downstream institutionalized structured training programmes would be carried out through other sources, but the curriculum and design of these programmes will be developed under this Grant and will be geared to the needs of the government officials and project staff involved with procurement at both central and provincial levels. It will also support seminars to raise awareness among important players such as key Government officials, Parliamentarians, community and private sector leaders, on the importance of an efficient public procurement system and to obtain feedback for further improvement. 3.
Establish public procurement bulletin and develop strategy for moving towards e-GP
This activity would include establishment of an paper-based and electronic public procurement bulletin. (PPB) The PPB would provide information to the public on bidding opportunities, procurement policies and regulations, standard bidding documents, publishing of contract award information, list of debarred firms etc. The design and installation of the PPB, including hardware/software, would be carried out by consultants and suppliers under PrMO’s oversight. This activity would also support the assessment and development of a long-term vision and strategy for moving towards e-GP in Lao PDR. An effective strategy would help guide the country in a systematic manner towards the development and use of e-GP for promoting efficiency and transparency in public procurement. To inform the strategy development, a study tour for a small number of relevant government officials will also be undertaken to a relevant country where e-procurement has been successfully implemented. III.
PROPOSED PROJECT
A.
Expected outcomes
The expected outcome of this grant is a strengthened public procurement system leading to more efficient, effective and fair public procurement. Effective implementation of the existing system could potentially yield substantial savings to the national economy. Through the monitoring framework being established under the grant, it will be possible to measure the overall performance and outcomes of the procurement system, including savings and progress of procurement reforms. Establishment of the proposed public procurement bulletin will greatly increase transparency and competition through wider disclosure. 132
Lao People’s Democratic Republic
B.
Project framework Activity
1.1 Design monitoring framework
1.2 Collect data to establish baseline
Output
Impact
Progress of the procurement reform and the outcomes of the procurement system being monitored and evaluated, providing an efficient basis for decisions on public procurement policy, Design of framework as well as data for the Government and agreed upon by all other stakeholders key stakeholders on the efficiency of the system Baseline data for the agreed upon indicators collected Framework established for monitoring regulatory and legislative progress, capacity, procurement performance and integrity/ transparency, including a number of key indicators
1.3 Establish data maintenance for update of monitoring framework
Mechanism, hardware and software in place to operationalize and pilot the monitoring framework
2.1 Develop and implement training-oftrainers programmes, and design institutionalized structured training programmes for government officials
Training-of-Trainers programmes designed and implemented.
2.2 Conduct workshops to raise awareness of the importance of efficient public procurement
Two workshops conducted with participants from the public and private sector, parliament, community representatives etc.
60 trainers trained Curriculum and design of institutionalized structured training programmes for government officials and project staff developed
Input Renumeration for Consultants Government officials salary Consultative workshops Hardware Software Overhead costs (office space and facilities, administrative support) Incremental operating costs (translation, printing and incremental travel of PrMO officials)
Strengthen procurement capacity, laying the grounds for the downstream establishment of institutional structured training programmes
Consultants renumeration Government officials salary
Increased awareness and interest in the efficiency of the public procurement system
Consultants renumeration Government officials salary
Training workshops
Training workshops
133
Lao People’s Democratic Republic
Activity
Output
Impact
Input
3.1 Design, supply, install, operatt the Public Procurement Bulletin
PPB established and operationalized
Increased transparency and competition in public procurement through wider publicity and disclosure
Consultants renumeration Government officials salary Training workshops Supply and installation of PPB system (hardware/ SW) Overhead costs Incremental operating costs
3.2 Develop long-term strategy for e-procurement
C.
Assess and develop strategy plan for e-GP
The use of e-GP will lead to significant improvements in the economy; and efficiency and transparency in the public procurement system
Consultants renumeration Government officials salary Overhead costs Study tour
Cost estimate and financing plan COST ESTIMATES (US$) Item
Donors
Total cost
0.00 8,000.00
549,000.00 126,000.00
549,000.00 134,000.00
0.00 0.00
100,000.00 50,000.00
100,000.00 50,000.00
36,000.00 1,500.00
0.00 15,000.00
36,000.00 16,500.00
4. Training, seminars and conferences
0.00
90,000.00
90,000.00
5. Research, development and surveys
0.00
100,000.00
100,000.00
6. Miscellaneous administration and support costs
1,800.00
18,000.00
19,800.00
7. Contingencies
2,000.00
52,800.00
54,800.00
1. Consultants a. International consultants b. Domestic consultants 2. Equipment and software a. Equipment b. Software 3. Buildings and furniture a. Buildings b. Furniture
134
Total
Government
49,300.00
1,108,800.00 1,158,100.00
Lao People’s Democratic Republic
D.
Government contribution
US$ 49,300 (In-kind: staff salary, office space and facilities, administrative support, etc.) E.
Implementation arrangements
The Procurement Monitoring Office of the Ministry of Finance will be directly responsible for the execution of the grant and will coordinate all activities under the proposed grant. The grant will be implemented by the same staff in PrMO to ensure that activities undertaken complement each other. International and domestic consultants will assist in the implementation of the project. IV.
BENEFITS OF THE PROJECT
This grant involves knowledge transfer components where international and national consultants will work together with relevant officials to strengthen skills, systems and performance through formal training sessions, hands-on activities, development of monitoring support tools and experience sharing. This combination of activities is expected to provide the Government with both the competencies and systems needed to sustain more effective and efficient management of public procurement in Lao PDR during as well as after the project.
135
Myanmar
Title:
Multi systems gateway project
Proposer:
Ms. Shwe Zin Ko, Staff Officer, Directorate of Trade, Ministry of Commerce
Country:
Myanmar
Date:
June 2005
I.
INTRODUCTION
The Myanmar Computer Science Development Law was promulgated in 1996. The preparation of the legal framework is a prerequisite for the successful implementation of e-government projects. The Myanmar Cyber Law has already been drafted and is close to finalization. In addition, the Government of Myanmar is undertaking a series of measures to promote trade. These included, among others, permitting private enterprises to export and import, promoting border trade, streamlining the export-import procedures by lowering tariff and non-tariff barriers and reactivating the Myanmar Chamber of Commerce and Industry. The Ministry of Commerce is operating an e-licensing system to issue export and import licenses without delay. Customs valuation is based on country tariff information (CIF) value, after adding landing charges equal to 0.5 per cent of the CIF value. Three types of taxes can be levied on imports: import duties, commercial taxes and license fees. In Myanmar, e-procurement is an online procurement system that enables government Ministries around the country to procure products electronically from both local and international suppliers by using the Internet. However, e-payment is not yet built into the system, thus payments are manually processed. II.
PROPOSED PROJECT
In order to improve and promote e-commerce, the National Finance Information System, the Customs Administration System, and the Tax Integrated System require fundamental reforms and upgrades. 1. National Finance Information System: this is the first priority because all settlement transactions should be made online. Currently, there are 350 bank branches throughout the nation that belong to the government sector. Some of the private banks are introducing online banking. Project scope
Performance indicators
Monitoring mechanisms
Assumptions and risks
Goal
136
To enhance efficiency, transparency and
Establishment of database systems for banks and
Project Steering and Implementation Committee and
Project financing and common understanding to
Myanmar
Project scope
Performance indicators
accountability of financial institutions financial activities nationwide that enables real-time management of national fiscal activities
Monitoring mechanisms
Assumptions and risks
Ministry of Finance and Revenue
establish and provide a secure information across different computing platforms Risks: less than 10 per cent for unexpected cases
2. Customs Administration System: to computerize the Customs Administration System is the second priority. The Customs Administration System will be linked with trade and commerce transactions. E-payment will become part of the system. Project scope
Performance indicators
To establish information systems that streamline customs administration and effectively prevent smuggling to reduce logistics costs in the import and export industry and improve the quality of services offered
Establishment of database systems for customs and trade administration
Monitoring mechanisms
Assumptions and risks
Goal Project Steering and Implementation Committee, Ministry of Commerce and Ministry of Finance and Revenue
Project implementation at airports, ports and border check points Risks: less than 5 per cent for unexpected cases
3. Tax Integrated System: to collect tax and revenue from the public is one of the most important component requirements of e-government. Project scope
Performance indicators
Monitoring mechanisms
Assumptions and risks
Project Steering and Implementation Committee and Ministry of Finance and Revenue
Implementation should start at the revenue offices across the nation
Goal To establish an IT enabled tax administration for fair and transparent tax policy execution; to support tax administration
Establishment of tax administration process
Risks:less than 15 per cent for unexpected cases
137
Myanmar
Project scope
Performance indicators
Monitoring mechanisms
Assumptions and risks
processes such as tax return, tax data management, audit and investigation, tax collection and civil service for tax payers
A.
Output and activities
State of the art technology should establish online security and interactive and up-to-date database. The critical success factors for the proposed project are:
• • •
Nation-wide telecommunications infrastructure established Rules and regulations for electronic transactions Project financing and business model
The project implementation team will meet with representatives from the ICT, trade and financial sectors; and government and private enterprises including representatives from the Ministry of Finance and Revenue and the Ministry of Commerce. B.
Cost estimates and financing plan
The international community will provide the majority of the funding for this project. COST ESTIMATES (US$) Item
138
Government
Donors
Total cost
1. Consultants a. International consultants b. Domestic consultants
Adjust with ministries
250,000 30,000
250,000 30,000
2. Equipment and software a. Equipment b. Software
Adjust with ministries
1,000,000 500,000
1,000,000 500,000
3. Buildings and furniture a. Building b. Furniture
Adjust with ministries
10,000 6,000
10,000 6,000
4. Training, seminars and conferences
Adjust with ministries
20,000
20,000
5. Research, development and surveys
Adjust with ministries
10,000
10,000
Myanmar
Item
Government
Donors
Total cost
6. Miscellaneous administration and support costs
Adjust with ministries
10,000
10,000
7. Contingencies
Adjust with ministries
50,000
50,000
1,886,000
1,886,000
Total
C.
Implementation arrangements
The project implementation team will need to focus on the following areas during the implementation stage.
• • • •
Infrastructure and computer systems Financial requirements Source of internal assistance Nation-wide effort to promote ICT systems in the government and private sectors
The project implementation team shall include representatives from international organizations. The team will also include representatives from the following ministries and institutions: Ministry of Communication, Post and Telecommunication; Ministry of Finance and Revenue; Ministry of Commerce; private banks such as Yoma Bank and Kanbawza Bank; and ICT companies such as Myanmar Computer Co., ACE Data System, and Myanmar Information Technology Co. D.
Benefits of the project
• • • •
Develop and establish e-commerce
•
Enable online payments
Reduce processing time Facilitate cross border trade and electronic transactions Establish taxation system and customs administration and user databases for the banking industry
139
Nepal
Title:
Pilot project for e-procurement
Proposer: fice,
Mr. Bhaba Krishna Bhattarai, Deputy Financial Comptroller General, Financial Controller General OfMinistry of Finance
Country:
Nepal
Date:
June 2005
I.
INTRODUCTION
The High Level Commission for Information Technology (HLCIT) is entrusted with the responsibility of promoting the IT sector by providing support to the government in formulation, implementation, monitoring and evaluation of IT policy and strategies. The strategic focus of HLCIT is to support research and development (R&D) that focuses on human resource development through quality IT education, linkages and expert assistance in quality control. Research and development entails market research, import and export facilitations for the firms and companies undertaking primarily export oriented software development, ensuring universal access to ICT, providing facilitative instruments for the growth of e-commerce and taking initiatives for attracting foreign investment in the IT sector. For the implementation of those policies and strategies, Electronic Transaction Ordinance 2004, Electronic Transaction (Certification) Regulation 2005 and Information Technology (Tribunal) Regulation 2005 have been enacted. The Procurement Act is in the process of finalization with the financial assistance of the World Bank, which will introduce an eprocurement system in the government sector after its enactment. II.
ISSUES
Although there is a positive response from both the government and private sectors to e-procurement, there are many issues and constraints that must be overcome. The main issue is the lack of awareness among political leaders and bureaucrats. They are not familiar with this new concept, which might bring a radical change in the prevailing procurement system. Another main issue is the instability of the political leadership. An eprocurement system implies fundamental transformation which requires political commitment and continuity in government policy. Other major constraints are lack of financing, untrained human resources and low level of ICT skills.
140
To overcome those challenges and to develop the ICT sector in the country, the Government has already enacted the Information and Technology Policy 2000 and Science and Technology Policy 2005. As a consequence, the HLCIT under the chairmanship of the prime minister was created, enactment of Electronic Transaction Ordinance 2004 enacted, and
Nepal
a Electronic Transaction (Certification) Regulation 2005 and Information Technology (Tribunal) Regulation 2005 were formulated. A Procurement Act is currently being reviewed and has already secured financial assistance from the World Bank for the implementation of an e-procurement system. III.
PROPOSED PROJECT
A.
Purpose and output
The primary purpose is to introduce a cost effective, transparent and quality e-government procurement system. Objectives:
•
To improve knowledge, efficiency and decision making capacity of civil servants engaged in procurement practices
•
To reduce the time and cost of procurement for both the buyer and supplier
•
To enhance accountability, transparency and effectiveness in procurement activities
Outputs:
• • • B.
Feasibility and investment outline for the e-procurement system E-procurement pilot project launched and implemented Periodical reports on operation, monitoring and evaluation of eprocurement system
Methodology and key activities
A phased programme shall be initiated in the central government and extended to the regional and district levels. The programme will consist of the following components: enhance awareness and preparedness; develop human resources; and deploy technology and services. Three government organizations or local bodies will be selected for pilot implementation. The pilot project will be conducted within two years. The pilot project will consist of the following activities: 1.
Awareness building: Politicians, bureaucrats, and the majority of the population in Nepal are not familiar with ICT enabled administrative systems and unaware of the benefits that can be obtained from an electronic procurement system. Hence, educating politicians, bureaucrats and the public is critical. Training will be conducted through workshops and seminars. The private sector and the media will be encouraged to take part in educating the public.
2.
Construction of infrastructure: Private sector will provide hardware and software. Model software will be modified according
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Nepal
to results of the pilot project.
C.
3.
Capacity building: Extensive training of government officials and private sector employees will be conducted. At the same time, internal procedures in government will be reengineered. Local experts with the guidance of foreign consultants will oversee portal administration, security management and software modification prior to project implementation. In this way, local experts acquire the necessary expertise to manage e-procurement and ensure long-term sustainability.
4.
Administrative arrangement: The procurement process will be centralized through the establishment of a central procurement agency that shall be responsible for administration and coordination of all e-procurement activities. This organization/agency will implement the e-procurement pilot project and provide recommendations for further improvement and replication.
Cost estimates and financing plan
The share of contribution from Government and donor is 10 per cent and 90 per cent respectively. In addition, the Government of Nepal will COST ESTIMATES (US$ million) Item
Government
Donors
Total cost
1. Consultants a. International consultants b. Domestic consultants
0.05 0.05
0.45 0.45
0.50 0.50
2. Equipment and software a. Equipment b. Software
0.20 0.06
1.80 0.54
2.00 0.60
3. Buildings and furniture a. Building b. Furniture
0.00 0.02
0.00 0.18
0.00 0.20
4. Training, seminars and conferences
0.00
0.00
0.00
5. Research, development and surveys
0.05
0.45
0.50
6. Miscellaneous administration and support costs
0.05
0.45
0.50
7. Contingencies
0.02
0.18
0.20
Total
0.50
4.50
5.00
provide adequate office space for the project. D. 142
Implementation arrangements The Financial Controller General Office (FCGO) will have a leading
Nepal
role in the implementation of this project. International consultants will establish and administer the portal administration, guide national consultants in modifying software and train government employees. IV.
BENEFITS OF THE PROJECT
The successful implementation of the pilot project will lead to a fullfledged implementation of an e-procurement system for the public sector, which will contribute to a transparent, accountable, and efficient procurement system. Project framework Design summary
Performance indicators
Monitoring mechanisms
Assumptions and risks
Impact E-procurement programme can be implemented in other government sectors
Realization of replicable e-procurement system
Government commitment Change in political leadership
Outcome A pilot project for e-procurement is implemented
Completion of pilot project
Pilot project completion report
Government commitment Availability of funding Change in political leadership
Outputs Necessary infrastructures will be developed
Computers
Activity reports
Servers Trained employees Rules and regulations
Government commitment Availability of funding Change in political leadership
Activities with milestones Awareness building Infrastructure development Capacity building Administrative arrangements
Workshops/seminars/ Activity reports information campaign Procurement hardware development of software Training for employees Strengthen institutional capacity of FCGO
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Nepal
Design summary Inputs Government ADB Beneficiaries Private Sector Others
144
Performance indicators
Monitoring mechanisms
Assumptions and risks
Pakistan
Title:
Federal e-procurement service project proposal
Proposer:
Mr. Adnan Khan, Director General, Electronic Government Directorate, Ministry of Information Technology
Country:
Pakistan
Date:
June 2005
I.
INTRODUCTION
Pakistan’s economy is currently undergoing a strong revival. The GDP growth rate touched 8.4 per cent in the financial year ending 30 June 2005, making it one of the fastest growing economies worldwide. The Government of Pakistan has identified e-government as one of the important enabling factors to catapult the Federal Government to transform into a 21st century modern and efficient government. The Federal Government and its attached departments and companies engage in large volumes of procurement. Lack of transparency and accountability are prevalent in public procurement. The Public Procurement Regulatory Authority (PPRA) has set up a single procurement framework for all agencies of the Federal Government and has now gained some experience in using the Internet to disseminate tendering information to the public. However, many issues remain unaddressed. A 5-Year Plan has been developed and is currently undergoing approval by the Federal Cabinet for the e-government strategy of the country. This plan has identified e-procurement as one of a common application of e-government that can be replicated or shared across multiple agencies, ensuring a streamlined process while realizing economies of scale. II.
ISSUES
In spite of the fact that Pakistan now has a single procurement framework for all agencies of the Federal Government in place, there are many issues involving a common understanding of the procurement framework and associated process as well as its implementation. The main issues involved across the lifecycle of the procurement process are identified in the following. A.
Process
issues
This section contains the main issues identified in the procurement process as observed across different procuring agencies and validated through interviews with multiple suppliers to public agencies: 1.
Common Understanding: There is a lack of common understanding across all government agencies regarding the procurement framework and its implementation in their procurement process.
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Pakistan
B.
2.
Access to Tenders: Currently, tenders are mostly announced through newspaper advertisements. The procurement framework prescribes the announcement of tenders on the PPRA website as mandatory, however, this rule is mostly flaunted. Potential suppliers cannot centrally register for public tenders. Also, tender documents are seldom available freely online. Sometimes the lack of tender documents is used to exclude potential bidders.
3.
Evaluation Disclosure: The procurement framework makes the disclosure of bid evaluations mandatory. However, this is seldom followed.
4.
Bidder Grievances: Grievances ranging from the formulation of tenders and discriminatory practices in tender specification up to the bid evaluation and their disclosure as well as the processing of such grievances is not transparent enough and agencies and departments are seldom made accountable for the same.
5.
Lack of Information: EGD has approached multiple agencies, including the Auditor General, procurement agencies and responsible ministries for statistics to analyze the procurement process (number of procurement activities, nature of purchases (without tender and tenders). However, these were either not available, incomplete or took a long time to compile. This situation underlines the lack of knowledge of the magnitude, type and audit of procurement activities. At the same time, it makes fact-based improvement of the process difficult.
ICT Issues
This section identifies the main ICT issues as identified while analyzing the infrastructure available today required to underpin an eprocurement system for public procurement:
146
1.
Awareness and ICT Knowledge: Carrying out business online is new in Pakistan both for the Government as well as for many suppliers. A process of training for agencies and suppliers, public awareness and buy-in will be necessary.
2.
Standardization of Tenders: To automate the procurement process, the tendering process as well as the tender and bids must be standardized in certain areas to ensure the electronic acceptance, processing and exchangeability of tenders and bids (e.g. a tender must have a start and end date, it may have a potential value and sector (to alert appropriate potential bidders (e.g. is it for computer infrastructure, roads, etc.)).
3.
Online Fund Transfers and Payment Clearance Requirements: Only recently has VeriSign introduced the first commercially available Public Key Infrastructure (PKI) system in Paki-
Pakistan
stan. With the help of different legislations in Pakistan, digital signatures have now started being used and online payments and electronic fund transfers are now available. However, the Government of Pakistan does not yet have a central infrastructure for digital signatures to process secure transactions, which will be necessary for e-procurement. A step further is also the challenge of integrating the future e-procurement system with other agencies and stakeholders. 4.
III.
Organization: A centrally run e-procurement system will require an organization which will have the responsibility of running and maintaining the system while liaising with agencies and suppliers to facilitate their procurement processes. A concept for this organization must benefit from best practices while taking ground realities in Pakistan into account.
PROPOSED PROJECT
The goal of the Federal e-Procurement Service is not to simply establish an e-procurement system for the Federal Government of Pakistan, but much rather to successfully manage a cultural change programme in the government. In this project, technology is an enabler, however, the success will be ensured only through a change in the procurement culture. This section covers the major areas of the proposed project. A.
Purpose and output
The purpose of the project is to ensure a higher level of competition and transparency in the public procurement process while saving government money and reducing corruption. Key performance indicators Year
Per cent of volume (%)
Per cent of tenders (%)
Increased competition (%)
Bidder satisfaction index (%)
Year 1
2
2
+10
+50
Year 2
10
6
+50
+70
Year 5
50
25
+100
+100
Per cent of volume:
This is going to be tracked through an initial estimation of the total procurement volume. This is going to start slow by concentrating on one single ministry to stabilize the system and then to roll it out to other ministries and their attached departments and agencies.
147
Pakistan
Per cent of tenders:
This is going to be tracked in the same manner as per cent of volume. Except that large tenders will be focused on first.
Increased competition:
The increase in competition will be done through estimating the average number of bids received per type of tender (less than and greater than one million PKR, intermediate categories of amounts may also be introduced).
Bidder satisfaction index: This index will be established in the beginning by interviewing a cross-section of regular bidders. It will be tracked relative to the starting index (100) before the introduction of Federal e-Procurement System (FeP-System) at the targeted agencies. Outputs: Federal E-procurement System
A centrally operated and maintained FeP-System underpinning the procurement framework, including e-tendering in the first step and e-purchasing in the second step. This system will expand the functionality offered in successive releases. This will also include secure electronic transaction based on a PKI and digital signatures.
Revised procurement process:
The revised procurement process is going to accommodate and legitimize the usage of the FeP-System.
Directives:
Directives will be issued by the top leadership under the chairmanship of the Prime Minister of Pakistan to make the usage of the FeP-System mandatory to the ministries and agencies to which it is rolled out.
Revised
The revised legislation will allow the usage of the the FeP-System.
Training:
148
legislation:
Extensive training and culture change activities will be organized allow for the tendering agency users as well as bidders to use the FeP-System.
Pakistan
Monitoring of the outputs is going to be accomplished through the following means: FeP-System:
The different deliverables for the different phases and releases of the FePSystem are to be completed according to the EGD.Framework (accessible at www.e-government.gov.pk) and the notation defined therein. Also, a review team, including technical persons from the public and private sector will determine the successful achievement of milestones as defined within the framework and the detailed project plan. A provision to include international members such as persons from PPS in the technical review team should also be accommodated.
Revised procurement process:
A business process review team together with PPRA officials, large government suppliers as well as a government process reform consultant from a Multilateral Development Banks (MDB) will be formed to ensure success and a high degree of buy-in.
Directives:
These will be monitored on a monthly basis internally and will be published to the National Electronic Government Council (NEGC) headed by the Prime Minister of Pakistan on a quarterly basis.
Revised
Recommendations for the revision in legislation will be additionally reviewed by government reform experts from MDB.
Training:
B.
legislation:
The status of the training will be kept in a database and reviewed along with the rest of the IT Training by the NEGC.
Methodology and key activities
The methodology to be followed has been laid out in the EGovernment Strategy and 5-Year Plan regarding applications. According to
149
Pakistan
the building blocks of the e-government, e-procurement has been defined as a common application that can be shared across most government agencies with little or no customization. Further, the strategy for common applications has been defined as first to be implemented in the Ministry of Information Technology (MOIT) and its attached departments as a pilot. Procurement personnel from other ministries will be involved in focus groups. After the stabilization of the system in the MOIT where infrastructure, IT awareness within the government and suppliers is high, the service will then be rolled out to other ministries and their attached departments. The implementation methodology; pilot where infrastructure and awareness are highest, and rollout to other agencies. Additional standard methodologies will augment the project: 1.
PMI as the Project Management methodology
2.
IT Infrastructure Library (ITIL) as the methodology for IT operations and maintenance
The proposal for the organizational structure for the development of FePS is the following:
P PR A
R e g u la te
A u d it o r G e n e r a l
&
A u d it
M o n ito r
M a i n t a in
&
O p e r a te
F eP S G o ve rnm en t A g en cie s
S u p p li e r s D e v e lo p T r a in
T ra in
EG D
The key activities for the proposed project have been defined according to the project lifecycle defined within the EGD Framework, the overview of which is given below:
Project Outline
Macro Design
Micro Design
Implementation
Testing
Rollout
Operations & Maintenance
Sundowning & Exit Release 1 Release 2
150
Release 3
Pakistan
The key activities in each phase is given in the table below: Phase
Key activities
Key outputs
System development Project outline
Develop a statement of work Identify functional requirements Develop baseline cost model Identify subject matter experts Define project strategy and deliverables Recommendations of FePS agency
Project outline (PC-1)
Macro design
Define releases
High level process model High level functional model High level operational model Functional requirements Non-functional requirements System context diagram Entity relationship model Project plan Release plan
High level system architecture Define team Cost model Project plan Master test plan Organizational structure of FePS
Micro design
Detailed system architecture
Process model
Test cases
Functional model
Kickoff of skeleton FePS
Operational model Physical data model
Implementation
Configuration and installation of different environments
Training modules
Coding
Application
Prototype
Prototype testing User group testing Develop training modules Build up capacity at FePS Testing
Functional testing
Completed test cases
Focus group testing Integration testing Load testing Rollout
Training Installation
Installed clients and infrastructure
Go live for FePS
Trained users
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Pakistan
Phase Operations and maintenance
Sundowning and exit
Key activities
Key outputs
Patches and upgrades Operate Application
Operated and maintained application
Operate Helpdesk
Helpdesk
Depends upon the business model used, e.g. PPP or other
Culture change Project outline
Regulation and legislation changes
Functional requirements
Requirements management
Non-functional requirements
All these steps must involve at least the following: – Suppliers – Buyers – Regulatory authorities – Auditing authority – Subject matter experts Implementation
Prototype testing
Recommendations for change to rules, regulations and legislation
Prototype User and focus group tests
Rollout
Public relations campaign
Awareness campaign
It is extremely important to define the activities of the different phases, the format and detail expectations from the beginning, so as to ensure a clear understanding across the different stakeholders at all times. The definition of most of these deliverables can be found on the link www.e-government.gov.pk. A detailed release plan will be developed during the macro design. However, a high level release plan is given below: Release 1: E-tendering
Functionality included 1. 2. 3. 4. 5. 6. 7.
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8. 9.
Central and one time supplier registration Tender announcements Download of tender documents Submission of questions and responses to tender as FAQ Submission of bids as technical and financial proposals High level evaluation matrix (e.g. business, technical, risk, references, financial) Announcement of high level technical and financial evaluation Submission of bidder grievances KPI publication mechanisms
Pakistan
Release
Functionality included
2. Grievance addressal
1. Grievances during the tendering process 2. Grievances post-evaluation 3. Grievances post-contract award
3. Purchasing
1. E-catalog 2. E-purchasing 3. E-payment
4. Contract management
1. Integration with collaborative project management 2. Tracking of open issues 3. Deliverable approval and milestone acceptance management 4. KPI and penalty management
C.
Cost estimates and financing plan COST ESTIMATES (US$ thousands) Item
1. Consultants a. International consultants – Government reform consultant (US$ 2,000/day for 60 days) – Public procurement consultant (US$ 1,000/day for 60 days) – System and security consultant (US$ 1,000/day for 90 days) b. Domestic consultants – Business process consultants at US$ 2,500/month at 6 months) – IT architecture consultants (US$ 2,500/month for 12 months) 2. Infrastructure a. Production environment b. Pre-production environment c. Development environment 3. System a. Building b. System development c. Training 4. Public relation activities a. Public relations campaign b. Seminars c. User conferences
Government
Donors
Total cost
0.00
120.00
120.00
0.00
60.00
60.00
0.00
90.00
90.00
15.00
0.00
15.00
30.00
0.00
30.00
100.00
600.00 400.00 100.00
600.00 400.00 200.00
The system will be housed in the Federal Government Data Center currently being implemented 200.00 1,700.00 1,500.00 200.00 400.00 50.00 100.00 100.00
450.00 – –
500.00 100.00 100.00
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Pakistan
Item
Government
Donors
Total cost
300.00
300.00
600.00
–
300.00
300.00
5. Others a. Miscellaneous administration and support b. Contingencies Total
D.
5,015.00
Implementation arrangements
In February 2005, The Government of Pakistan signed an MOU with the Government of the Republic of Korea in order to secure Korean expertise in introducing a world-class e-procurement system in Pakistan. In May 2005, a six-member delegation of Korean IT Promotion agency (KIPA) and Public Procurement System (PPS) visited Pakistan to conduct a feasibility study of e-procurement in Pakistan together with EGD. The objectives of the visit were to: (i) analyze the existing IT infrastructure in Government Ministries/Divisions; (ii) analyze the existing IT facilities of suppliers; (iii) analyze the current procurement processes of Pakistan; and (iv) identify the issues/challenges for implementing e-procurement in Pakistan. The completed feasibility study, which will be available by the end of August 2005, will include the following: future procurement process; required IT infrastructure; needs regarding legislative reforms; high level eprocurement project plan; and high level resource and budget requirements. Based on the results of the feasibility report, a comprehensive project plan will be made in consultation with KIPA and PPS to successfully implement the e-procurement system in Pakistan. The high level project plan for the feasibility report is given in the illustration below: 02/05 05/05
MoU Exchange • MoU signed between EGD and KIPA
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06/05
Kickoff Meetings with: • Secretary MOIT • MD (PPRA) • MD (PSEB) Seminar on e Procurement
As -is Study As - is Study: • Interview regarding Vision & Strategy for e - Procurement • Interviews with process users • Interviews with process owners • Mapping of As - is procurement process • As -is rules and regulations • As -is IT infrastructure
08/05
To -be Model To - be Model: • Confirmation of as is study • To -be processes • Benchmarking with best practice • IT system prerequisites • Changes to rules and regulations
Deliverables As - is: • Process • IT infrastructure To - be: • Process • Changes in IT infrastructure • Changes in rules and regulations Implementation: • High -level Project Plan • High -level resource and budget requirements
Pakistan
EGD has already awarded a contract to a local company for the implementation of the common ERP applications (which includes e-procurement, this is the preparation of procurement tenders, documents, etc.) as defined in the E-Government Strategy and 5-Year Plan. This application will require an interface to FePS. To optimally leverage international best practices and lessons learned, it is recommended that a local company partner with an international company for the implementation of the system. This could be a private corporation that has successfully implemented such a system in another country that has been recognized as a best practice. The implementation must take interfaces into consideration between the divisions and FePS. A large awareness and culture change programme must be started early, including the involvement of relevant stakeholders to integrate their ideas and ensure a high buy-in for the future system. This will include the following: requirements gathering; user testing; training; and culture change. E.
Benefits of the project Lifecycle step
Supplier registration of paper ments are ber, of last x years,
Benefits Suppliers will no longer have to supply their company details for every bid, this will decrease the amount produced and handled. In many cases, these documore voluminous than the bid itself (e.g. tax numcompany registration, financial statements etc.).
Tender announcement
Tenders are not announced centrally, but rather in newspapers. This means that suppliers must scan all newspapers and may miss tenders. Tenders in FePS will be announced through the FePS portal and pertinent suppliers (according to their expression of interest and the definition of the tender) will be informed automatically.
Tender documents
Tender documents will also be available free of cost or on-cost basis from FePS. This will allow all interested bidders to take part in the tender. At this time, the availability of tender documents is sometimes used discriminatory mechanism.
nonas a Bids
Bids will be submitted online allowing remote bidders in other cities to bid as and when they want during the time of the tender
Grievances
Grievances and their addressal will become more transparent. Also, to questions regarding tenders standard processing times and automated escalation mechanisms will be implemented.
E-purchasing
Maverick buying will be mitigated. Competitiveness for small ticket items will be increased.
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Pakistan
Title:
Monitoring of public procurement and capacity building of stakeholders
Proposer:
Mr. Muhammad Khalid Javed, Managing Director, Public Procurement Regulatory Authority
Country:
Pakistan
Date:
June 2005
I.
INTRODUCTION
The Government of Pakistan has undertaken far reaching reforms in the public procurement sector and has established a Public Procurement Regulatory Authority as a statuary body endowed with the responsibility of improving governance, management, transparency, accountability and quality of public procurement of goods, services and works in the public sector. The mandate of the Authority, as stated in the Public Procurement Regulatory Authority Ordinance 2002 is as follows: (a) Monitor application of the laws, rules, regulations, policies and procedures in respect of, or relating to, procurement; (b) Monitor the implementation of and evaluate laws, rules, regulations, policies and procedures in respect of, or relating to, inspection or quality of goods, services and works and recommend reformulation thereof or revisions therein as it deems necessary; (c) Recommend to the Federal Government revisions in or formulation of new laws, rules and policies in respect of or related to public procurement; (d) Make regulations and lay down codes of ethics and procedures for public procurement, inspection or quality of goods, services and works; (e) Monitor public procurement practices and make recommendations to improve governance, transparency, accountability and quality of public procurement; (f) Monitor overall performance of procuring agencies and make recommendations for improvements in their institutional set up; (g) Provide and coordinate assistance to procuring agencies for developing and improving their institutional framework and public procurement activities; (h) Submit reports to the Government in respect of public procurement activities of procuring agencies;
156
(i) Call any functionary of procuring agencies to provide assistance in its functions and call for any information from such agencies in pursuance of its objectives and functions; and
Pakistan
(j) Perform any other function assigned to it by the Federal Government or that is incidental or consequential to any of the aforesaid functions. The Authority has undertaken an in depth study of the procedures and practices of various government agencies and designed a comprehensive regulatory framework for the discharge of its functions as assigned to it by law. The Public Procurement Rules 2004 are available at http:// www.ppra.org.pk. The Authority has established a portal for public sector procurement to enhance transparency and efficiency in public procurements, and to introduce latest available technologies. As per the Procurement Rules, all procurement opportunities over a prescribed threshold are required to be advertised on the Authority’s portal. II.
ISSUES
As per the Public Procurement Rules, 2004, it is mandatory for all public agencies to advertise their procurement opportunities over Rs. 40,000 (US$ 666.0) on the Authority’s portal. The database of the portal is updated daily. Two search criteria can be applied while retrieving tender information. The establishment of this portal has eliminated malpractices in advertisement of procurement opportunities. Although the new regulations have not been widely circulated to all the public sector procuring agencies, the regulations can be read and downloaded from the Authority’s website. It is therefore felt that while on one hand the process of procurement needs to be mechanized and a dependence is created on systems, on the other hand extensive training of procurement professionals as well as the Auditor General’s staff and other stakeholders at various levels of management is required. III.
PROPOSED PROJECT
The Authority has set up a public procurement regulatory framework to be followed by all public procuring agencies. It has been observed that in the first instance, the grass root level procuring officials are either unaware of these reforms, or they are deliberately not implementing the revised system. Such a system requires a two-pronged strategy for effective implementation of reforms. Firstly, the procurement officials need to be appropriately trained in the revised regulatory regime, and secondly, an effective e-procurement regulation system needs to be in place. In addition to the purchasers, a large number of officials from the Auditor General’s office are also required to be appropriately trained in the revised system so that they can undertake the statutory audit in accordance with the revised environment.
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Pakistan
The proposed project aims to establish a comprehensive Internet based procurement regulation system as well as training of the various stakeholders involved in the public procurement system. A.
Purpose and output The purpose of the project is four folds:
B.
•
Conduct training need assessment study of procurement officials, managers, as well auditors and develop an appropriate training programme for each tier of these officials
•
Develop training materials for the proposed training programmes and undertake capacity building of procurement officials, auditors as well as other stake holders in this area
•
Improve upon the present portal of Public Procurement and bring it up to a level where it is comparable with other public procurement portals established elsewhere in the world
•
To suggest modifications required in the Public Procurement Rules 2004 to give legal cover to these activities
Methodology and key activities
There are two key activities in the project. The first activity will be to upgrade the portal established by the Public Procurement Regulatory Authority for effective regulation of public procurements. The second activity is to build capacity of public procurement professionals, managers, auditors as well as regulators. C.
Cost estimates and financing plan COST ESTIMATES (US$ million) Item
1. Consultants a. International consultants b. Domestic consultants
158
Government
Donors
Total cost
0.00 0.00
0.05 0.00
0.05
2. Equipment and software a. Equipment b. Software
0.00
1.00
1.00
3. Training, seminars and conferences
0.25
1.00
1.25
4. Miscellaneous administration and support costs
0.10
0.00
0.10
5. Contingencies
0.00
0.30
0.30
Total
0.35
2.35
2.70
Pakistan
D.
Implementation arrangements
The Public Procurement Regulatory Authority would be the executing agency for the project. The Authority prescribed a regulatory framework, namely, Public Procurement Rules 2004, to be followed by all public procuring agencies. The Public Procurement Regulatory Authority has also arranged with the premier training institutions in Pakistan to conduct training courses of various levels for the procurement professionals of public procuring agencies. Adequate funding has also been provided by the government for running these training courses. IV.
BENEFITS OF THE PROJECT
The project will have far reaching effect in bringing transparency, accountability and savings in public procurements. It would also provide opportunities for the SME sector to actively participate in the procurement of goods, service and works by the public sector. Wide dissemination of procurement opportunities would reduce corruption and lead to good governance. Project framework Design summary
Performance targets/indicators
Data sources/ reporting mechanism
Assumptions and risks
Impact The proposed project would have a far reaching effect towards achieving transparency and accountability in public procurements
The Public Procurement Regulatory Authority would provide requisite data for the proposed project
Resistance of the procuring agencies
Outcome Public procurements are undertaken in accordance with the prescribed regulatory framework
Public procuring agencies in Pakistan
Outputs A fully functional portal of procurement opportunities fully compliant with the prescribed regulatory framework
No risk is anticipated
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Pakistan
Project framework Design summary
Performance targets/indicators
Data sources/ reporting mechanism
Training need assessment study
A report on training need assessment
Design of training material for various professionals, managers, auditors and regulators
Curriculum design of training programmes of various type of professionals
The Authority would be responsible for providing full support as well as execution of the project
Conducting training courses
Conduct of training courses
Upgrade PPRA’s portal to the level of a full fledged Public Procurement portal for effective procurement regulation
The Public Procurement Portal is established and comparable with similar portals setup in other countries
A fully trained work force of procurement professionals, managers, auditors and regulators Activities
Inputs The Authority would provide full administrative support, also provide finance within its to available resources ADB is expected to provide services of its consultants for the design and conduct of training modules/ programme, as well as training material which may be available with it The beneficiaries of the project would be the government agencies, autonomous bodies, auditors as well as regulators
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Assumptions and risks
Papua New Guinea
Title of Project: E-procurement Proposer:
Mr. Phillip Stagg, Executive Chairman, Central Supply and Tenders Board (CSTB)
Country:
Papua New Guinea
Date:
June 2005
I.
INTRODUCTION
The Department of Finance and the Central Supply and Tenders Board has developed the legal and legislative framework for the introduction of e-procurement. As of May 2005, the new amended Public Finances (Management) Act and its associated Financial Instructions are to govern all procurement related transactions by departments and government agencies. The Department of State Enterprises, Information and Communication (DSE&IC) was established in 2003 by an act of parliament to, among other things, help ensure that all citizens benefit from the improved information and telecommunication system. Currently, there is no law that governs online transactions, Internet and or other cyber uses. The Government and the three departments have acknowledged that just like other investment sectors of the economy, ICT will requires a sound regulatory and institutional framework. The Government of Papua New Guinea currently carries out its procurement of goods and services through the centralised Central Supply & Tenders Board (CSTB) and twenty Provincial Boards and three specialized Boards all managed and regulated by the CSTB. All procurements are currently procured through the conventional method. There are 33 declared “Public” bodies who procure by themselves, but who receive their approvals from the National Executive Council, chaired by the Prime Minister. The building blocks of procurement, for the Government of Papua New Guinea, are in place and others are being gradually developed. II.
ISSUES
The Government recognises the use of Information Communication Technology (ICT) as a tool for future growth in e-commerce, business and e-procurement. The Government has recognised that with the increasing use of the electronic media, it must adopt and make swift changes. Unfortunately, all government departments and agencies, apart from the Internet and e-mail users, have no online network within each organisation neither within the total government organisations where information can be shared between departments and made accessible to the general public. Hence, Government through its Medium Term Development Strategy (MTDS), adopted this year, is determined to improve its telecommunication network to enable the provincial governments to participate in the ICT developments
161
Papua New Guinea
Once this is in place, it is anticipated that online usage will increase and this will greatly enhance the development of e-sourcing and e-procurement. There is an urgent need to conduct research into the ICT sector to clearly determine its impact on the public and the private sectors, individuals and the economy as a whole. Such research should address issues such as capacity building, human resource development, access, investment in broadband, and security. The proposed project is intended to provide an initial step in seeking external expert assistance for a small but effective e-procurement system. Objectives:
•
Conduct research into ICT developments within departments, provincial administrations, agencies and statutory organisations and recommend appropriate strategic measures for the development and establishment of e-sourcing and e-procurement
•
To develop and deliver a more responsive and effective service to the people of Papua New Guinea which will catapult Papua New Guinea to the next level of economic growth
The scope of this project is inspired by the statement made by our Prime Minister, Hon. Sir Michael Somare during his opening speech at the Integrated Government Information System (IGIS) workshop in 6 June 2005. He stated “In our efforts to keep up with technological advances, we wait for others to propose to us what our needs are and subscribe their models as being best for us. We understand our set-ups and must source the appropriate models to suit our needs. Nor must we be afraid to look for examples in both developed and developing world where appropriate technology has been successfully employed to help these countries move forward”. III.
PROPOSED PROJECT
A.
Purpose and output
The integration of all government agency participants will form a single government service that will provide prudent procurement and financial management systems. Furthermore, it will allow the public and private sector to register in one online location. Further, it will allow and provide an Executive Information System for CSTB or others in decision making individually or collectively. Key activities:
162
• •
Conduct a needs analysis of existing systems and resources Develop a policy framework that would be used as a blueprint
Papua New Guinea
in the implementation of the project which will include security, privacy, interoperability and interconnections
• B.
Definition of contents that will pass through the network providing immediate access to pertinent information
Cost estimates and financing plan Project framework Strategies
Performance targets
Reporting mechanism
Assumptions and risks
Goal Integrated System To provide a basis for an initial network Interconnection to be established within Port Moresby by interconnecting all Government departments to the CSTB, Finance Department
Inter-department and Agencies Committee and development of an Memorandum of Understanding
Political (Ministerial) will and support is required
Opening up a venue for access by the general public
Improved technology should provide a 24 hour seven days weekly service
Consultative meetings
Generates confidence in private sector and capacity of government
Timely management reports and timely annually reports.
Reliability and timing of information in the initial stage and on a long term basis
Purpose Establish a local centralised (POM) electronic linkages with all departments, statutory bodies and agencies
Optimum resource and financial information sharing and hence will serve as a government model for government nationwide-networking
Deliver a more responsive efficient and effective service in enhancing Papua New Guinea’s growth to a higher economic development
Increase confidence of the public on the use of ICT technology
Strategies Encourage private participation in assessment of technology requirements
Increase corporation and coordination between the government and private sector community
Encourages sharing of Effective and information amongst efficient flow of departmeninformation tal heads and other agencies
163
Papua New Guinea
Strategies
Performance targets
Reporting mechanism
Assumptions and risks
Commence an information campaign to generate an awareness by public on the use of ICT technology
Public awareness
Carrying out surveys Require full corporation of all citizens both individual and corporate
Provide capacity building to IT personnel
Increased technical expertise to administer all government owned systems
Establishment R&D management committee
Review and update necessary laws and legislation to ensure smooth implementation
Conducive environment to the ICT sector
C.
Turn-over of IT professionals
Can be political
Implementation arrangements COST ESTIMATES (US$ million) Item
164
Donors
Government
Total cost
1. Consultants a. International consultants b. Domestic consultants
0.00 0.00
0.25 0.10
0.25 0.10
2. Equipment and software a. Equipment b. Software
0.00 0.00
0.85 0.25
0.85 0.25
3. Buildings and furniture a. Building b. Furniture
0.00 0.05
0.00 0.00
0.00 0.05
4. Training, seminars and conferences
0.5
0.00
0.5
5. Backbone infrastructure a. Port Moresby b. Provinces (20) c. Consultant offices
3.5 3.0 0.00
0.00 0.00 0.15
3.5 3.0 0.15
6. Miscellaneous administration and support costs
0.045
0.00
0.045
7. Contingencies 15 per cent
0.00
0.00
1.275
Total
6.5
1.5
9.775
Papua New Guinea
The Central Supply and Tenders Board will take a lead role in the implementation of the project. Given the nature and role of the Board in procuring for the Government of Papua New Guinea, it will ensure the presence of a procurement unit in every agency. A Procurement Working Committee (PWC) will be established with membership from the relevant line agencies, selected public bodies and from the private sector community. In addition, this project will provide on-line facility for the electronic delivery of government information and services in procuring goods and services. A very critical area that has to be addressed is the review and updating of laws and legislation that might impede the implementation of this project. Having the political will and backing of the Government, it is expected that the Public Finances (Management) Act, Financial Instructions, laws, rules, regulations and legislations will be formulated, and consequently passed. As indicated earlier, this project hopes to solicit the participation of the public and private sector community not only in procurement and financial support, but most importantly in the provision of technical support. The significant role of the private sector in the implementation of e-government is recognized, and thus the government will continue to create an environment conducive to business. Particularly, the CSTB, together with other government agencies, will continue to enhance its incentive programmes. IV.
BENEFITS OF THE PROJECT
Whilst, the coverage is based on the current role the Board plays in procurement for the Government of Papua New Guinea in accordance with the individual thresholds, recent amendments in the Public Finances (Management) Act of 2003 and its associated Financial Instructions, has placed the Board in a position to “control and regulate” all provincial supply and tenders boards. This is a country-wide responsibility for the CSTB and hence any development in the ICT area will greatly improve transparency, accountability and equal participation by the private sector. This project hopes to increase the confidence of the public by strengthening the Government of Papua New Guinea’s departments and agencies capacity in managing the country’s scarce financial resources. The development in ICT will definitely ensure integrity of flow of resources evading opportunities for graft and corruption from amongst the CSTB and its attached bureaus and agencies. The Central Supply and Tenders Board firmly believes that a saving of at least 20-30 per cent can be generated from the current total government annual expenditure if the current tendering processes are improved. However, if the Government of Papua New Guinea moves to strengthening the current developments by adopting e-procurement, as submitted in this proposal, a much higher savings can be generated. 165
Philippines
Title:
Development and implementation of the Philippine businesses registry as a linkage component to the PhilGEPS
Proposer:
Ms. Vina Liza Ruth C. Cabrera, Director, Management Information Service, Department of Trade and Industry
Country:
Philippines
Date:
June 2005
I.
INTRODUCTION
The Philippine Government Electronic Procurement System (PhilGEPS) is the country’s single, centralized electronic portal to be used by all government agencies in the procurement of common goods and also serves as the primary source of information on procurement of goods and general support services; civil works; and consulting services. With the implementation of Republic Act 9184 or the Government Procurement Reform Act in 2003, all government agencies including local government units have been mandated to use the PhilGEPS. Aside from an Electronic Bulletin Board for the posting of procurement opportunities, notice and awards, and an Electronic Catalogue which is a listing of common goods, supplies and materials, the system currently has a facility for the online registration of buyers and suppliers. As of May 2005, a total of 3,395 government agencies and 12,208 suppliers have been registered into the system. Enhancements to the system are on the pipeline. By 2006, the system should have the following features in place:
II.
166
•
Virtual Store, an enhancement of the existing Electronic Catalogue to enable online ordering of goods, supplies and materials
•
E-payment, to manage the generation of purchase orders and the payment of bids processed through the system
•
E-bid submission, which includes the creation of electronic bid forms and electronic bid box, delivery of bid submissions, notification to supplier of receipt of bids, bid receiving and electronic bid evaluation
ISSUES
An implementation issue that has been encountered with the system is the absence of a facility to validate the information of suppliers as far as the legitimacy of their business operations is concerned. As such, documents from various government agencies need to be submitted by the bidders, in much the same way as the voluminous documents were submitted before the implementation of the PhilGEPS. The tedious procedure of checking of the completeness as well as the veracity of documents
Philippines
continues to this day. The benefits of an automated system are thus minimized as a result of this manual interface. It is therefore proposed that a linkage with existing computerized systems of other government agencies, particularly the Bureau of Internal Revenue (BIR) for tax information, the Securities and Exchange Commission (SEC) for company registration and financial statements, the Department of Trade and Industry (DTI) for business name registration, and the various local government units for business license permits be established. Having such a facility will readily inform system users if a supplier is duly registered with these government agencies or not. A supplier should not be accepted into the pool if the validation facility yields negative results. Enabling the linkage will involve the development of a database repository that will cull the required information from the databases of various agencies so as not be intrusive on the large computerized systems currently in place. This system will not only be a registry of suppliers but will evolve to be an online portal to streamline business registration procedures and make it easy for all types of business enterprises to do business in the country. The system will be called the Philippine Business Registry. III.
PROPOSED PROJECT
The Philippine Business Registry is envisioned to be a web-based portal, which will provide a seamless transactional environment for business registration and facilitation among the various business registration agencies:
•
Department of Budget and Management Procurement Service (DBM-PS) for the registration of suppliers under the PhilGEPS
•
Securities and Exchange Commission (SEC) for the registration of partnerships and corporations through the SEC i-Register
•
Department of Trade and Industry (DTI) for the following systems: –
DTI Web-Enabled Business Name Registration System (WEBNRS)
–
Integrated Registration System (IRS) of the Board of Investments (BOI) for incentives registration by local and foreign investors
–
TRADELINE PHILIPPINES for the accreditation of the country’s exporters
–
SME Database for the monitoring of the country’s SMEs
•
Bureau of Internal Revenue (BIR) for the issuance of Tax Identification Number. and business tax registration systems
•
Investment promotion agencies (IPAs) such as the Philippines
167
Philippines
Economic Zone Authority (PEZA), Clark Economic Zone Authority (CEZA), etc. for registration of locators and developers within the various IPAs in the country through their own online application systems to be developed in the near future
A.
•
Social Security System (SSS) for validation of employer-employee information
•
Local Government Units (LGUs) for the application of business permits/ licenses
Purpose and output
• • • B.
To create a national business registry database To provide a harmonized Philippine Business Number (PBN) To facilitate business registration and Internet-based transactions among government regulatory bodies and the business sector
Methodology and activities
The project will be implemented in phases, the components of which are as follows: Phase 1: Business process review and harmonization of business-related databases. The detailed components are as follows:
168
•
Business process review. A review of the different business registration processes across government agencies will be done in order to shorten and streamline the whole business registration cycle. Existing web-enabled business registration infrastructure will also be assessed and shall be upgraded or enhanced if necessary for them to be aligned with the proposed Philippine Business Registry system.
•
Harmonization of DTI databases and the conduct of study for the Philippines Business Number. Presently at the DTI, there exist a number of disparate databases containing information about SMEs. Meanwhile, other agencies have their own databases on business owners and their activities. This project component will determine how all these databases can be harmonized through the use of a unique business identification number or the Philippines Business Number. More importantly, this phase will examine how the Registry can be linked with the PhilGEPS in a seamless manner.
Philippines
Phase 2: Development of the Philippine Business Registry Portal. An end-to-end integrated solution for the development, deployment and maintenance of an on-line transactional application portal will be put in place. A preliminary study to determine system requirements will be conducted and shall serve as input to the actual development and implementation of the Phillipine Business Registry. The formulation of a Database Integration and Implementation Strategy Plan will likewise be undertaken. Phase 3: Database migration and establishment of linkages. Establish linkages with the PhilGEPS, BIR, SSS, investment zoning agencies like PEZA, CEZA, etc. and eready Local Government Units (LGU).
C.
•
Data migration process. The data consolidation concept for the Philippine Business Registry project aims to create a centralized and shared information resource alongside existing business registration databases. A data migration process and the use of data extraction tools will be used in the cleansing and consolidation of data from different agencies on different platforms.
•
Establishment of linkages. On-line linkages with agencies having to do with business registration processes will be provisioned and implemented in this phase.
Project duration Duration (months) Phase 1:
Integration of SEC and DTI databases and enhancement of DTI BNRS
Phase 2:
Development and implementation of the Philippine Business Registry Portal
Phase 3:
Establish linkage with BIR, Investment Priority Areas and Local Government Units
6
12 6
Total elapsed project time shall be Twenty-four (24) months. Project duration excludes time spent for purchase, bidding, and negotiation activities. D.
Cost estimates and financial plan 169
Philippines
Project framework Design summary Impact The system will facilitate the overall process of registering a company/enterprise to do business in the country The system will facilitate transaction processing of other online government applications like the PhilGEPS by eliminating repetitive submission of business-related documents.
Performance indicators
Decreased number of days to register a business
Monitoring mechanism
Assumption and risks
Survey from actual business registrants on the number of days it took them to register their business
All existing databases are on open source platform
Increased frequency of hits and lodged transaction applications on the portal
Full cooperation from agencies and local government units in implementing the systemLegal or policy impediments in the integration of databases Legal or policy issues and impediments in the collection of revenues arising from business registration services
Decreased number of days to complete a transaction, particularly the submission of bids under the PhilGEPS
No software licensing impediments
Outcome Creation of the business portal Philippine Business Registry
An integrated registry containing data sets required by online government application systems
Outputs/strategies Create an Inter-agency Committee which will act as a Technical Working Group
Inter-agency Memorandum of meetings to take Agreement signed by heads of agencies stock of project progress and implementation issues Establish data linkage Technical Surveys implementation policies and system memorandum access rights and of agreement procedures
170
Full support by Department Secretaries and heads of agencies/ local government units High turn-over rate of IT staff
Philippines
Design summary
Performance indicators
Provide capacity building for IT personnel Develop public awareness about the project
E.
Monitoring mechanism
Assumption and risks
Increased technical capacity for system administration Communication Plan
Implementation arrangements COST ESTIMATES (US$ thousands) Item
1. Consultants a. International consultants b. Local consultants
Government
Donors
Total cost
0
130 280
130 280
0
2,910 1,600
2,910 1,600
4. Training, seminars and conferences
0
80
80
5. Research, development and survey
0
0
0
6. Miscellaneous administration and support cost
0
0
0
Total
0
5,000
5,000
2. Equipment and software a. Equipment b. Software (including systems development) 3. Buildings and furniture
The lead agency will be the Department of Trade and Industry (DTI) as project owner. As such, it will coordinate the various activities under each phase to include bidding and acquisition of resources, funds management, and over-all project implementation. It will create an InterAgency Committee (IAC) composed of the DBM-PS, SEC, BIR, SSS, the National Computer Center (NCC), and those LGUs which are e-ready. The IAC will serve as the Technical Working Group which shall regularly discuss implementation strategies and issues throughout the duration of the project. Consultant inputs will be required for the following:
•
Business process review (local consultant) –
Duration: 6 months
171
Philippines
–
•
•
•
•
•
Expected results: streamlined procedures for business registration, Philippine business number coding scheme
Systems analysis and design (local consultant) –
Duration: 3 months
–
Expected results: system requirements, technical system design and configuration, request for proposal for acquisition of resources
Database integration strategy and implementation (foreign consultant) –
Duration: 1 month
–
Expected results: oracle database implementation plan
Project management (local consultant) –
Duration: 24 months
–
Expected Results: 3rd party project manager over all consulting contracts
Systems development and implementation (local consultant) –
Duration: 12 months
–
Expected Results: development and implementation of Philippine Business Registry
Data conversion and establishment of linkages (foreign consultant) –
Duration: 3 months
–
Expected Results: data conversion and database population, establishment of linkages with other government agencies
A communication plan will be formulated to serve as a guide on how to effectively disseminate the usage of the system and its overall benefits. It will outline the responsibilities of the different agencies involved. Periodic monitoring and reporting of activities will serve as feedback on how the communication plan is being implemented by the agencies. IV.
172
BENEFITS OF THE PROJECT
While its neighboring countries have been reaping the benefits of having a central business registry, the Philippines still has to design and build one. Experts from foreign funding institutions have long been struggling with the absence of a centralized database for businesses in the country, from which relevant data can be culled for their project studies for funding assistance. Having a Philippine Business Registry will not only help focus the efforts of the government and financing institutions in helping local
Philippines
businesses, but will also provide a ready source of business data for potential business partners world-wide, thereby facilitating commercial transactions for Philippine enterprises. Meanwhile, instituting a unique Philippine Business Number for all business entities in the country will follow the successful e-government business registration models of Singapore and Australia, among others, where the registration number is the identification key for entities to contract and avail of various goods and services. This will effectively monitor the activities of business entities, the effects of government assistance and strategies, and will eventually impact on more accurate reporting of business generated as well as for more accurate tax collection efforts by the Bureau of Internal Revenue. With the creation of a unique PBN, it is foreseen that there would be efficiency in processes needed for a business entity to register its business and to operate within the country. To a large extent, the unique PBN will facilitate paperless transactions between government agencies, especially for electronic procurement, and more importantly, build a strong foundation for a harmonized government frontline services system.
173
Philippines
Title:
Jumpstarting e-procurement in the LGUs
Proposer: ogy
Ms. Teresita B. Roberto, Director, Information TechnolConsulting Service Office (ITCSO), Commission on Information and Communication Technology (CICT), National Computer Center
Country:
Philippines
Date:
June 2005
I.
INTRODUCTION
Republic Act No. 9184 otherwise known as the Government Procurement Reform Act is the primary statute of e-procurement in the Philippines. It directs all government departments, bureaus, including local government units to use the Government Electronic Procurement System (GEPS) which was conceived and developed as a strategy to enhance transparency, efficiency, and value for money in government procurement. Section 8.3.3 of the Government Procurement Reform Act specifically states the target dates wherein city, provincial, municipal governments and barangays are to be using the GEPS. The Procurement Service, an attached agency of the Department of Budget and Management (DBM), is the government agency responsible for overseeing the technical operations of the GEPS. At present, the GEPS features three major components:
•
Public Tender Board to provide access to information and distribute bid packages
•
Electronic Catalog to support purchases of goods and services by public sector agencies
•
Supplier Registry for the registration of suppliers wishing to do business with government agencies
Phase 2 of the GEPS is currently underway and covers the development of the following modules:
174
•
Virtual Store, an enhancement of the existing Electronic Catalogue to enable online ordering of goods, supplies and materials from the Procurement Service
•
E-payment, to manage the generation of purchase orders and the payment of bids processed through the system. The focus of this feature is to facilitate the electronic transfer of funds from DBM-PS to and from the procuring entities to the supplier and
Philippines
from procuring entities to supplier for bids managed directly by the procuring entity
•
E-bid submission, includes the creation of electronic bid forms and electronic bid box, delivery of bid submissions, notification to supplier of receipt of bids, bid receiving and electronic bid evaluation
The new system is targeted to be launched this coming October 2005. II.
ISSUES
Even with high-level political support for the EPS, adoption of the GEPS has been relatively slow and inconsistent. One major reason is the absence of budget for capital outlay. Aside from this, not all agencies have adequate manpower resources to implement the GEPS. Another factor which makes it difficult for agencies, specifically the local government units to comply with the GPRA is the absence of Internet Services Provider in their locality. The need to address the above issues is immediate considering that those local government units situated in far-flung municipalities/barangays are expected by their constituents to deliver required services in a fast and timely manner. There have been cases wherein patients needing medicines cannot be immediately treated as medicines/medical supplies take too long to be purchased/delivered and the worst case scenario is the loss of human lives. As the DBM-PS does not also have funds to support the deployment of electronic kiosks, this proposal seeks assistance from foreign institutions with respect to the provision of computing facilities to underserved municipalities/barangays and/or the establishment of shared GEPS IT infrastructure that would enable 1,501 municipal governments and 41,995 barangays to access and use the GEPS, III.
PROPOSED PROJECT Objectives:
• •
Accelerate the implementation of the GEPS in the LGUs
•
Enhance the integrity and credibility of local government officials
Have 41,995 barangays using the GEPS by end of 2006 and 1,501 municipal governments using the GEPS by end of 2005
175
Philippines
A.
Methodology and key activities Project framework Design summary
Performance targets/indicators
Data sources/ reporting mechanism
Impact
176
Confidence and faith of citizens in the integrity of their elected local officials restored and graft and corruption minimized
High approval rating by the constituents
Survey
Efficient and transparent procurement process
Amount of savings realized
Status of funds
Number of municipalities/ barangays enrolled in the GEPS
GEPS status report
Outcome Strengthened capacity of the Commission on Information and Communications Technology (CICT) and DBM-PS as lead implementing agency for e-procurement to foster an enabling environment conducive to collaboration within the government bureaucracy Improved and sustainable delivery of certain social services to the local constituents brought about by the expeditious procurement of goods necessary to provide such service Enhanced public/ private sector/civil society partnership as confidence of the general public with respect to the integrity of their elected public officials are restored
100 per cent of municipalities using GEPS by end of 2005 100 per cent of barangays using GEPS by end of 2006
Balance sheets
Assumption and risks
Philippines
Design summary
Performance targets/indicators
Data sources/ reporting mechanism
Assumption and risks
Outputs ICT-enabled human resources in the LGUs
New skills acquired
Assumptions
Streamlined delivery of public services
No. of transactions
Risks
Timely completion of projects that address the development agenda of the local government
No. of projects completed
Effective utilization of the GEPS as a strategic tool to restore moral accountability of public officials
Number of new GEPS subscribers
Leveled playing field in government biddings Activities with milestones Human resource development
Number of participants Conduct of seminars/ trained workshops (IT Awareness) Capability building Acquisition and deployment of necessary ITC facilities User training Adoption of GEPS Establishment of shared ITC infrastructure Inputs Government, ADB Co-financing, beneficiaries Private sector
177
Philippines
B.
Cost estimates and financing plan COST ESTIMATES (US$ million) Item
Government
Donors
Total cost
1. Consultants a. International consultants b. Domestic consultants
0.00 0.10
2.00 0.00
2.00 0.10
2. Equipment and software a. Desktop computer b. Software
0.00 0.00
25.0 2.00
25.00 2.00
3. Training, seminars and conferences
0.10
0.70
0.80
4. Miscellaneous administration and support costs
0.00
0.30
0.30
5. Contingencies
0.00
3.00
3.00
Total
0.20
33.00
33.20
C.
Implementation arrangements
The Procurement Service shall conduct end-user trainings for procurement officers. The CICT/National Computer Center/Telecommunications Office shall identify the underserved municipalities and barangays. The Development Academy of the Philippines shall collaborate with procurement service (PS) and CICT in the design of a Change Management and Capability Building Program for the LGUs. IV.
BENEFITS OF THE PROJECT
The provision of at least the basic IT infrastructure to municipalities/ barangays wishing to take active part in the implementation of the GEPS would improve the image and credibility of the Philippine Government. The Philippine government has always been perceived by the citizens and even by other countries to be one of the most corrupt government. One strategy for curbing corruption and reducing the opportunities for government officials and employees to commit irregularities is to introduce the GEPS thereby removing the face-to-face interaction with vendors. This will also help bolster transparency in government operations as the Invitation to Bid, bid results and other information are posted online. Additional benefits are:
• • 178
Minimize operational cost Providing the LGUs with the IT infrastructure to implement eprocurement will provide substantial savings in terms of transportation/traveling costs, communication costs, advertising costs, supplies and materials, freight charges
Philippines
• • •
Facilitates the delivery of local government services Stimulates growth of industries and local economy Improving efficiency, accessibility, accountability and transparency in delivering basic services; providing the proper environment to enable and increase IT usage; delivering basic services to businesses, communities and citizens through streamlined frontline services; streamlined cross agency processes; sharing of databases workflow applications and exchange of documents; and, fund implementation of mission-critical applications
179
Philippines
Title:
Security plan for the GEPS and other Government systems
Proposer: get
Ms. Rosa Maria M. Clemente, GEPS Project Manager, GEPS Group, Procurement Service, Department of Budand Management
Country:
Philippines
Date:
June 2005
I.
INTRODUCTION
The Department of Budget and Management (DBM), through its Procurement Service (PS) supports the efficient and effective purchase of goods and services for government agencies. In November 2000, the Procurement Service of the Department of Budget and Management (PSDBM), with the assistance of the Policy, Training and Technical Assistance Facility (PTTAF) of the Canadian International Development Agency launched the Internet-based Pilot Government Electronic Procurement System (GEPS). The GEPS is composed of the following features: 1.
Electronic Bulletin Board – to provide access to information and distribute bid packages;
2.
Electronic Catalogue – to support purchases of goods and services by public sector agencies; and
3.
Supplier Registry for the registration of suppliers wishing to do business with government agencies
The GEPS is the single, centralized electronic portal to be used by all government agencies in the procurement of common goods and also as the primary source of information on procurement of: other goods and general support services; civil works; and consulting services. With the implementation of RA 9,184, government agencies including local government units are mandated to use the GEPS. Suppliers, manufacturers, contractors, consultants are also required to register with the system. As of 30 May 2005, a total of 3,395 government agencies and 12,208 suppliers have been registered into the system.
180
DBM-PS has identified a need for significant additional functionality that is not currently available in the Pilot GEPS. Also in accordance with RA 9,184 of the Government Procurement Reform Act, the GEPS will have the following additional functions: enhancement of the functionality of the pilot system (phase 1) and virtual store, e-payment and e-bidding (phase 2). DBM-PS expects the system to support both the submission of sealed bids and electronic bids. Also, the GEPS shall provide the necessary functions to record the receipt of sealed bids and to issue a receipt to the supplier
Philippines
confirming the receipt of the supplier’s bid. DBM-PS hired a local service provider in 2004 in order to develop the additional functionality. Testing of phase 1 of the new system is ongoing and the system is targeted to be launched at the end of 2005. In terms of security, the GEPS currently uses secure socket layer for its pilot implementation and even until phase 1 of the new GEPS is implemented. However, for phase 2, the use of digital certificates should be employed. As stated in RA 9,184, the GEPS shall incorporate the following features: security (protection from unauthorized access or interference through the incorporation of security features such as firewalls), integrity (the authenticity of messages and documents submitted through the GEPS shall also be ensured by the use of electronic signature) and confidentiality (the GEPS shall ensure the privacy of parties transacting with it). The Government has already enacted RA 8,792, which establishes rules and processes for the use of and acceptance of digital signatures on electronic documents and other forms of security such as PKI. The GEPS shall have to conform to the e-commerce legislation and ensure digital signatures are supported in its processes. II.
ISSUES
Although the Philippine e-commerce law was enacted in the year 2000, there is no national security plan issued by the Philippine Government to address the use of PKI in government transactions. There are several initiatives by the National Economic Development Authority (NEDA), Commission on Information and Communications Technology (CICT) and other government agencies to develop a master security plan for the government of the Philippines. Because of this and the lack of capability of the DBMPS personnel to implement security systems, the GEPS infrastructure is deemed not ready for the implementation of the Phase 2 features specifically the e-bidding functionality. Currently, there is only one DTI/DOST accredited private Certification Authority (CA), My SecureSign, who is the sole Philippine CA to issue Verisign Digital Certificates. Initial planning regarding PKI implementation in PS-DBM has been done. It has been discussed with the PS-DBM management, the local service provider in-charge of the development of GEPS and MySecureSign that when the e-bidding feature is implemented, government agencies and suppliers, consultants, contractors etc. will have to secure digital certificates from MySecureSign or through the Procurement Service of DBM as sub certification authority. During this meeting, the issue of agencies and private sector companies acquiring another set of digital certificate to transact with another e-government system was raised. This would be a duplicative/costly effort for users in the government agencies and the private sector users. Also, another subject of discussion is
181
Philippines
that if PS-DBM is the authorized central government agency to issue digital certificates to agencies and private sector companies who want to transact with the government. An additional issue is that there have been issues of security being raised with regards to private certification authorities that will issue digital certificates for government transactions. According to some studies in other countries, the issue of trust is a concern in public key certificates issued by Certification Authorities. It was often doubted if Certification Authorities were operating correctly, and secondly if certificates issued by both domestic and international Certification Authorities could actually be trusted, as none of existing trust, accreditation and cross certification models available today was truly universal. Another thing is that several government agencies will try to develop/implement their own security plan in the absence of a national security plan in order to implement their own e-government systems. Due to the issues mentioned above, an assessment should be made in order to ensure that the proper implementation of the security infrastructure. Hence, this paper hopes to provide a resolution on how security specifically PKI will be implemented for the GEPS and eventually in the Philippine Government as a whole. The objectives of the proposed project: 1.
To assess the current information security situation of the GEPS system and the government of the Philippines;
2.
To establish a plan for the security of the GEPS system and other e-government systems;
3.
To build the capacity of the Philippine government to implement the security plan and eventually, manage change and train the users of the system on the use of digital certificates.
III.
PROPOSED PROJECT
A.
Purpose and output
The security implementation plan aims to ensure that the proper implementation of security and PKI solution will be implemented in the Government Electronic Procurement System and eventually the Philippine government as a whole. The project will be divided into phases:
182
• • •
First phase: security needs assessment Second phase: security plan Third phase: Implementation of the plan
Philippines
The first phase would focus on the needs analysis to be conducted by an international and a local consultant to be hired by the funding institution. This would be done within three (3) months. The needs analysis aims to assess the current information security level of the GEPS and the Philippines specifically the adoption of PKI implementation taking into consideration issues such as security of government transactions, interoperability and international standards. The second phase will involve the development of a security plan with the results of the security assessment as input. This would be done by the international and local consultants together with the an inter-agency technical working group composed of technical staff from DBM-PS GEPS group, CICT, Department of Trade and Industry (DTI), Department of Science and Technology (DOST), Commission on Audit (COA), Bangko Sentralng Pilipinas (BSP) and the National Security Council (NSC) and a representative from the private sector. This should be completed within six (6) months. The draft plan will be discussed and presented with other government agencies through the Government Procurement Policy Board, a policymaking body in-charge of protecting national interest in public procurement consist of different government agencies’ secretaries and also with the CICT. The private sector will also be consulted in several consultation meetings. The plan is still subject to revision according to what has been agreed upon during the discussions and consultation meetings. The plan will also take into consideration if the accredited private certification authorities will be capable and secure enough to issue digital certificates to both government agencies and suppliers and if there is a need of designating a government agency as a government certification authority and what specific actions are needed to be taken. The third phase will include building of the capacity of the Philippine government to undertake the implementation of the security plan. This phase will include the following activities: (a) provision of training to government technical staff; (b) provision of hardware/software infrastructure if needed; (c) training and information dissemination to the users of the system; and (d) updating of applicable laws and issuance of memorandum in order to implement the plan. This phase will involve the local consultant, the implementation agency, government lawyers, congress and the senate of the Philippines. The capacity building activity would take about two months while the other activities would take about four months and may even go beyond due to the involvement of government lawmakers in the updating of the pertinent law. B.
Methodology and key activities
Below is the project framework table outlining indicators, monitoring mechanism and assumed risks.
183
Philippines
Project framework Design summary
Performance Data sources/ targets/indicators reporting mechanism
Assumption and risks
Impact Increased trust and confidence of the suppliers/public in the government procurement process and the government as a whole
Increase in the number of private sector companies joining government projects bidding
Implementation of e-bidding system and other e-government system
Reports/statistics on the implementation of e-government project
Political will to implement and cooperate
Security assessment report
Level of information security in the Government
Surveys/research
Cooperation of the respondents
Security plan
Clear Direction in the implementation of security
Consultative meetings
Commitment and willingness of the participating agencies
Capacity of the government to implement the plan
Increased technical capacity of the Philippine government to implement the plan
Skills assessment
To ensure the security of information/ government transactions in e-government systems specifically the e-bidding system
Reports/statistics
Outcome Implementation of the government security plan Outputs
Turnover of IT professionals/ No. of calls in the data centre pertaining cooperation of the to the use of digital citizens certificates
Well-trained users
184
Activities with milestones
Inputs
Assessment of the current situation
ADB international/ local security consultant/technical working group
Development of the security plan
ADB international/ local security consultant/ technical working group
Discussion of the draft plan with other government agencies
ADB international/ local security consultants/ technical working group/other government agencies
Philippines
Design summary
Performance Data sources/ targets/indicators reporting mechanism
Assumption and risks
Private sector participation particularly in assessment of technology requirements
ADB international/ local security consultants/ technical working group/private sector
Provide capacity building to IT personnel
ADB international consultant/local security consultant/ change management consultant
Provide training and information campaign to set the minds of the public on the use of technology
Government/local change management consultant
Review and update necessary laws and legislation to ensure smooth implementation
Government
C.
Cost estimates and financing plan COST ESTIMATES (US$ thousands) Item
1. Consultants a. International consultants b. Domestic consultants (security) c. Domestic consultants (change management)
Government
Donors
Total cost
0
300 96 36
300 96 36
2. Equipment and software a. Equipment b. Software
0
2,500 1,500
2,500 1,500
3. Training, seminars and conferences
0
150
150
4. Research, development and surveys
0
200
200
5. Miscellaneous administration and support costs
0
15
15
6. Contingencies
0
5
5
Total
0
4,802
4,802
185
Philippines
D.
Implementation arrangements
The Procurement Service-Department of Budget and Management will take a lead role in the implementation of the project. However, the Commission on Information and Communications Technology (CICT) will be designated as assistant leader since they are the agency in-charge on information technology implementation. An inter-agency technical working group will have to be formed with representatives from the DTI, DOST, BSP, COA, NSC and from the private sector. The international/local consultants to be hired should be security experts particularly in the field of Digital Certificate implementation. The consultants should have experience in implementing security for e-commerce/e-government systems particularly government electronic procurement systems. Both of them will be in-charge in the assessment of the security, development of the plan and building the capacity of the government to implement the security plan. The duration for their service would be twelve (12) months. The other local consultant to be hired should be an expert in training and change management, which would be involved during the capacity building of in-house personnel and also in-charge of handling the initial implementation of the orientation of the users. He should be an expert in change management and human resource management. The duration for his service would be six (6) months. The plan would be implemented after the capacity of the government to implement was built. The lead agency should be able to train the users of the system with the help of the assistant agency and the change management expert in the use of digital certificates. Continuous training programme and information dissemination should be done. IV.
186
BENEFITS OF THE PROJECT
The development a Security Plan and the capacity building of the government agency not only benefits the Procurement Service of DBM and facilitates the implementation of the e-bidding feature of the Philippine Government Electronic Procurement System, it is also an enabler in the implementation of other e-government projects that requires digital certificates and other security requirement. This project aims to increase the confidence and trust of the suppliers, manufacturers and contractors who will be joining government procurement and the general public and nongovernment procurement monitoring organization in the government procurement process. There will also be an increased confidence of the public in the use of ICT in the transacting with the government. The security plan also facilitates the implementation of laws and government policies such as the e-commerce act and the government procurement reform act. This will also ensure interoperability of the PKI infrastructure with other government and to address the public access issues related to the use of PKI.
Sri Lanka
Title:
Proposal for implementation of e-procurement in Sri Lanka
Proposer:
Mr. Sarath Muthugala, Director, Monitoring, National Procurement Agency
Country:
Sri Lanka
Date:
June 2005
I.
INTRODUCTION
In Sri Lanka, the objective of an e-government development strategy is to achieve real time information sharing, and collaboration. To achieve the above task, e-governance solutions with online data sharing should be extended to other sectors such as finance management, human capital management, health and human service, and integrated justice. The impediment of any e-government development strategy is the lack of IT infrastructure in the implementing agencies and other players in the network. It is additionally important to assess whether the business community and government officials are ready to adopt an e-procurement process in place of a manual tender procedure. Currently, there is a project implemented by the Information and Communication Technology Agency (ICTA), funded by the World Bank and the Government of Republic of Korea which is earmarked to achieve some of these objectives. E-procurement in Sri Lanka is in a primary stage. However, with the set-up of the National Procurement Agency (NPA), the Government has set-up an Authoritative Agency under the direct purview of H.E the President. The objectives of an e-government are already being supported with legislation which are in draft form. II.
ISSUES
The project conducted by ICTA and funded by the World Bank and the Government of the Republic of Korea aims to address the following issues: 1.
Planning and management of e-government procurement system;
2.
Drafting of specific legislation and regulation;
3.
Need assessment of the IT infrastructure for line agencies and ministries;
4.
Training for operation of e-procurement process;
5.
Develop procedures that ensure integrity, non-repudiation and confidentiality;
6.
Digital signature and digital certification;
187
Sri Lanka
7.
Process to treat manual bids along with e-bids;
8.
Dispute resolution mechanism and transactions;
9.
Awareness and training; and
10. Post review and monitoring process. III.
PROPOSED PROJECT
The main goal of this project is to establish an efficient and cost effective procurement management system. Project framework Design summary
Performance indicator
Monitoring mechanism
Assumptions and risks
Enhance disbursement ratio of the donor funded and government funded projects and increase public satisfaction level
Progress review of the disbursements ratio, number of high value tenders awarding within pre determined time period and complaints received
Stable political situation and continuity of political leadership
Enhanced efficient cost effective e-procurement system
Gradual implementation of the e-procurement system with the full knowledge and participation of all the stake holders
Line agency Availability of infrastructure Adoptability to the new system
Concurred recommendations to be implemented by the Government of Sri Lanka
Progress review meeting with stake holders and the consultants
Full compliance by stakeholders
Impact Enhance the transparency, efficiency and cost effectiveness of procurement practices
Outcome Implementation of e-procurement in place of manual tender floating process currently available in Sri Lanka Output Recommendation to the government of Sri Lanka to implement the e-procurement strategy
Look to other nations experiences
Activity with milestones
188
Planning and manage- Document system ment Draft rules and Drafting of required regulations specific legislation and regulation
Progress review meetings and review documents Progress review meetings with
Sri Lanka
Design summary
Performance indicator
Monitoring mechanism
Assumptions and risks
Need assessment of line agencies and ministries
Draft report
consultants, line agencies and stakeholders
Training
Enhance technical capacity to operate procurement processes
Continuous dialogue among agencies and staff
Development of a procedure and process to ensure integrity, non-repudiation and confidentiality
Increase confidence
Develop digital signature and digital certification
Increase confidence
Process to treat manual bids along with e-bids
Minimize public and supplier complaints
Dispute resolution mechanism and transactions
Stakeholders are confident and satisfied
Awareness and training
Technical capacity of administration system increased
Public Awareness
Public awareness
A.
Research and development Surveys
Cost estimates and financing plan (US$)
Component/item 1. International consultants a. Needs analysis of the ministry and agencies b. Planning and development of e-procurement study c. Legislations and regulations d. Standardize procedures e. Dispute resolution mechanism f. Process to treat manual bids with e-bids g. Training and public awareness h. Post review monitoring
Foreign fund
300,000
Agency counterpart
30,000
Total cost
330,000
189
Sri Lanka
Component/item 2. Software, equipment and a procedure to ensure integrity, non-repudiation and confidentiality; and digital signature and digital certification
Foreign fund
Agency counterpart
Total cost
2,500,000
50,000
2,550,000
3. Trainings and public awareness
150,000
100,000
250,000
4. Contingencies
200,000
50,000
250,000
3,150,000
230,000
3,380,000
Total
B.
Implementation arrangements
The National Procurement Agency (NPA) will oversee implementation of the project. The line ministries and line agencies will collaborate with the NPA. IV.
BENEFITS OF THE PROJECT
The proposed project is expected to accrue the following benefits to the nation:
190
• • •
Improve transparency in e-government procurement
•
Provide audit trails and help to implement government procurement policies
• • •
Facilitate access to procurement information
Increase competition Reduce procurement costs including newspaper advertisements etc.
Reduce transportation costs and time Reduce procurement delays and processing time for a tender to 4-5 months
Thailand
Title: ment
Re-assessment of the ICT infrastructure for e-procureimplementation
Proposer:
Mr. Thongchai Sangsiri, Computer Technical Officer, Ministry of Information and Communication technology
Country:
Thailand
Date:
June 2005
I.
INTRODUCTION
The Government of Thailand is aware of the necessity to modernize the method by which it offers services to its citizens. In 2001, the Thai Government launched its e-government project which identified four types of government services that need to be further developed into e-public services: (1) the Online Information Service, (2) the Simple Transaction Service, (3) the Payment Gateway, and (4) e-Procurement. It is evident that the Thai Government placed high priority on e-procurement development early on. To promote the e-procurement initiative, the cabinet mandated all government agencies to make government acquisition announcements available on the Internet. Ministries and departments were directed to establish their own websites in support of the reverse e-auction process and were further required to conduct at least one reverse e-auction transaction before the end of December 2002. On 5 October 2004, the cabinet introduced the following basic guidelines for government agencies to follow: 1.
All government acquisitions (excluding local government) must be published on http://gprocurement.go.th;
2.
Any purchase over 2 million baht (US$ 50,000) should use the reverse e-auction procedure; and
3.
Central government offices in Bangkok should use the e-shopping procedure when purchasing the following five items: televisions, fax machines, digital projectors, laser printers, and laptop computers.
Currently, the Department of Comptroller General is promoting awareness among government agencies of a new cabinet resolution which mandates the use of e-GP instead of the traditional purchasing method. The change has been gradual because most government agencies are still not fully aware of or feel uncomfortable with the new purchasing procedures. It is expected to take more time to fully implement e-GP nation-wide.
191
Thailand
II.
ISSUES
There are several fundamental factors which are essential to the success of a country-wide e-procurement implementation. One very important aspect is the state of readiness of the underlying network infrastructure which enables individuals from anywhere throughout Thailand to access eprocurement document on the website and correspond with the government e-procurement office. Because of unique ICT infrastructure characteristics such as Internet service availability, service penetration rate, connection speeds, and computer equipment availability, Thailand urgently needs to determine the status of current ICT infrastructure in order to ensure a successful government e-procurement implementation. III.
PROPOSED PROJECT
A.
Purpose and output
The purpose of this project is to produce a complete assessment of the readiness level and/or make recommendations for the improvement of the ICT infrastructure required for the implementation of an e-procurement system in Thailand. B.
Methodology and key activities
The scope of assessment work will be limited to selected cities throughout Thailand. The ICT infrastructure in each chosen city will be thoroughly examined. A comprehensive report will be written. It will summarize the readiness levels at each location along with improvement recommendations. The recommendations could subsequently be used to improve cities with less-developed ICT infrastructure so that they are at the same level of preparedness as other more advanced urban areas. Project framework Design summary
Performance targets/indicators
Data sources/ reporting mechanism
Improve or update ICT infrastructure at each location according to the reported recommendations
Interview vendors in the area for their evaluation of government ICT infrastructure
Impact
192
Use report findings/ recommendations to make the e-procurement process more transparent and truly available to anyone and anywhere
Assumptions and risks Assumptions Vendors are honest and truthful Risks Reliability of the responses from vendors
Thailand
Design summary
Performance targets/indicators
Data sources/ reporting mechanism
Outcome A comprehensive assessment report composed of assessment and recommendations for improvement
Assumptions Information about Timely report ICT infrastructure submission is collected and analyzed. A comparative analysis is performed to determine the readiness level and also the improvement recommendations
Outputs Report#1: List of selected cities Report#2: Summary of observed facts at each location
Assumptions and risks Analytical assessment is performed by experts who are familiar with Thailand’s specific needs Risks The report conclusions may be drawn from a small sample, depending on the number of selected cities Assumptions
Report must be clear and relevant to e-procurement purposes
Timely report submission
Major cities which are appropriate for this project can be easily identified Risks
Report#3: Assessment and recommendations
Confidential information may be difficult to obtain Collected information may be contradictory if from different sources
Activities with milestones Select cities for the project Gather information about each city Assess collected information and provide improvement recommendations
Inputs Establish credible criteria for selecting appropriate cities. Assess the ICT infrastructure at each city
Formal progress reports must be submitted for examination at each milestone
Government ADB Co-financing Private Sector Others
Write a report which includes improvement recommendations
193
Thailand
C.
Cost estimate and financing plan COST ESTIMATES (US$) Item
Government
Donors
Total cost
50,000.00
0.00
50,000.00
2. Research, development and surveys
2,000.00
0.00
2,000.00
3. Miscellaneous administration and support costs
2,000.00
0.00
2,000.00
4. Contingencies
6,000.00
0.00
6,000.00
60,000.00
0.00
60,000.00
1. Consultants
Total
D.
Implementation arrangement
Since the Ministry of Information and Communication Technology (MICT) is responsible for the country’s ICT infrastructure, it is appropriate for MICT to take the lead role in this project. There will be communication and collaboration among all the parties who are in charge of existing ICT infrastructure, including MICT, Communication Authority of Thailand (CAT), Telephone Organization of Thailand (TOT), and other network carriers. The consultants should be familiar with Thailand’s specific e-procurement and egovernment needs. IV.
BENEFITS OF THE PROJECT
This project will complement the Thai Government’s effort in implementing a nation-wide e-procurement system. Once the ICT Infrastructure at all major cities are properly assessed and brought up to the same standard, e-procurement will truly be viewed as being transparent and available to everyone and at any location.
194
Timor-Leste
Title:
Regional information hubs development in Timor-Leste (I-Hubs)
Proposer:
Mr. Flavio Cardoso Neves, Director of Information Technology, Department of Information Technology, Ministry of Transport, Communications and Public Works
Country:
Timor-Leste
Date:
June 2005
I.
INTRODUCTION
The National Development Plan sets out many challenges such as institution building, legal framework development and enforcement, service delivery, effective communication, human resource development, employment and income generation, economic development, and security. Multi-sectoral responses are needed and ICT could play a pivotal role in addressing these challenges. ICT can help the nascent statehood strengthen the core elements of good governance – participation, transparency and accountability. ICT facilitates the flow of information for dissemination, broad-based dialogue or market transactions. ICT knowledge and skills enhance employment and income generation opportunities. II.
ISSUES
Before the wide application of ICT for national development can take place, Timor-Leste must meet three crucial challenges:
III.
(i)
Poor ICT infrastructure especially at the local level;
(ii)
General lack of ICT skills; and
(iii)
Lack of knowledge hubs.
PROPOSED PROJECT (i)
Develop information and communication hub infrastructure at the regional levels;
(ii)
Strengthen local ICT skills to enhance entrepreneurial and development opportunities; and
(iii)
Promote local knowledge resources exchange.
Main activities: 1.
Establish an integrated series of five pilot information hubs (IHubs) at the regional level that will be connected to the existing Government Information Office.
195
Timor-Leste
A.
B.
196
2.
Provide local population, who currently do not have access to basic ICT knowledge, with opportunities to be trained in practical ICT skills for wider application of such skills to various development activities.
3.
Create Regional Information Centers (RICs), with collection of indigenous and traditional knowledge, socio-economic data, public information and records, that can be easily accessed by local population and form a basis for future development planning. These RICs will potentially serve as the bridge of information between the government and the general public.
Purpose and output
• •
Improved information sharing and communication linkages
•
Increased citizen’s participation in and understanding of a decision-making process
• • •
Greater transparency and accountability in public administration
•
Systematic and effective storing and upgrading of information, data and knowledge
•
Easier access to knowledge and information for local people and service providers
•
Stronger culture of active citizenship, knowledge, entrepreneurship and boosted employment potential
•
Increased access for local populations and service providers, such as community radio, to a wide range of knowledge resources
Better public awareness of government policies and strategies at regional level
Enhanced business and development opportunities ICT based training and capacity building in five regional centres and nearby districts
Methodology and key activities
To achieve these outcomes, the project will establish an integrated series of five ICT centres (Knowledge hubs) at the regional levels to act as a district level information and communications hub. Through these centres, both information sharing and data collection will be facilitated through close co-operation with existing information providers (e.g. district administration, community radio stations, Civil Society Organizations (CSOs)). The knowledge hubs will provide the following services:
Timor-Leste
C.
•
Provide training and capacity building activities on ICT, integrated with other development activities in the areas. Provision of training, library and facilities such as e-mail, fax, typing services, telephone services and photocopying will support employment and business development
•
Support the development of local entrepreneurship via business skills development and support for employment generation
•
Act as an important base for promoting wider access to knowledge through workshops, seminars and linkages with other Government projects
Cost estimate and financing plan COST ESTIMATES (US$ thousands) Item
1. International consultants
Foreign fund
Agency
Total cost
50,000
20,000
70,000
2. Backbone infrastructure
300,000
50,000
350,000
3. Development portals and software
300,000
50,000
350,000
4. Training, seminars and conferences
50,000
20,000
70,000
5. Contingencies
750,000
0.00
750,000
Total
750,000
140,000
890,000
Project framework Strategies
Performance indicators
Monitoring mechanisms
Assumptions and risks
Goal Creation of Regional Information Centres within five districts
Integrated System Interconnection
Inter-Agency meetings and establishment of a memorandum of understanding
Political will to implement and cooperate
Purpose Establish a nation-wide electronic linkage among RICs
Optimum resource and revenue information sharing and therefore serve as a model for governmentwide-networking
Technology should provide a 24 x 7 service
197
Timor-Leste
Strategies
Performance indicators
Monitoring mechanisms
Assumptions and risks
Deliver a more responsive efficient and effective service to the Timor-Leste citizens
Increased confidence of the public on the use of ICT
Frequency of access being made by the public
Encourage private sector participation particularly in running of the RICs for delivery of others services such as fax, telephony services etc.
Increased coordination between the government and private sectors
Consultative meetings
Confidence of the private sectors and capacity of government entity
Encourage sharing of information amongst the department and its attached bureaus and agencies
Effective and efficient flow of information
Timely reports
Timing and reliability of information particularly during the initial phase of exchange of information
Provide information campaign to set the minds of the public on the use of technology
Public awareness
Surveys
Cooperation of citizens
Provide capacity building to IT personnel
Increased technical capacity to administer system
Establishment of R&D
Turn-over of IT professionals
Strategies
D.
Increased private sector investment
Implementation arrangement
The Department of Information Technology (DoIT) will take a lead role in the implementation of the project. Ministry of Transport Communications and Public Works (MTCOP) being the Government ICT focal point, it will be ensured that there will be a clout in various agencies. Its members include Ministry of Education, Civil Society Organizations, Ministry of Planning and Finance, Capacity Development and Coordination Unit, Government Information Office, District Development Fund Office and Development Agencies such as United Nations Development Programme (UNDP). 198
The strategic implementation of project would provide online facility for the electronic delivery of government information and services.
Timor-Leste
As mentioned, this project hopes to solicit the participation of the private sector not only in providing financial support but most importantly in the provision of technical support. The significant role of private entity in the implementation of e-government is recognized. In order to ensure the existence of private participation, the government will continue to create an environment conducive to business. Particularly, the Department, together with other agencies, will continue to enhance its incentives programmes to increase the interest of the private entity in its coordination and cooperation with the government. IV.
BENEFITS OF THE PROJECT
Creation of the I-Hub or Knowledge hubs will not only allow the Timor-Leste citizens at the district level to communicate with the decision makers, but also promote the use of ICT tools. It is anticipated that through these I-Hubs, ICT awareness and knowledge within Timor-Leste will be enhanced. Furthermore these I-Hubs not only complement the importance of ICT tools but also create confidence within the Timorese with matters related to transparency and accountability. As the I-Hubs will be focused on creating a bridge between the decision makers and the citizens, these will allow the citizens to communicate with their legislators openly. Should the I-hubs benefit the locals, then policies can be set on how to transfer the I-Hubs to the business community within the region. With focused groups managing the I-Hubs, it is expected that the locals will, thereafter appreciate efforts being put in promoting the I-Hubs, give these I-Hubs full support. Upon request, other ICT related services can be deployed such as fax, new bulletin etc. Additional benefits include:
• •
Improved information sharing and communication linkages
•
Increased citizen’s participation in and understanding of a decision-making process
• •
Enhanced business and development opportunities
•
Systematic and effective storing and upgrading of information, data and knowledge
•
Easier access to knowledge and information for local people and service providers
Better public awareness of government policies and strategies at regional level
ICT based training and capacity building in five regional centres and nearby districts
199
Timor-Leste
200
•
Stronger culture of active citizenship, knowledge, entrepreneurship and boosted employment potential
•
Increased access for local populations and service providers, such as community radio, to a wide range of knowledge resources
Viet Nam
Title:
Computerization of government operations and activities
Proposer:
Mr. Nguyen Nhu Trung, IT Specialist, Information Division, ICT Centre, Ministry of Foreign Affairs
Country:
Viet Nam
Date:
June 2005
I.
INTRODUCTION
E-government has yet to be implemented in Viet Nam. Currently the Ministry of Planning and Investment (MPI) with assistance from the Public Procurement Service (PPS) of the Republic of Korea is formulating a plan for the development of an e-procurement system. However, research indicates that an e-procurement system can be established only after the government and administrative procedures are all ICT enabled. A programme for the development of e-government has been enacted, but as of 2005, most ministries and local governments functions on minimal IT systems and are lacking computers, databases and software applications. Although the Government and political leaders have recognized the importance of ICT to construct a transparent, efficient and accountable government, most government officials lack experience with IT and egovernment, and are resistant to change traditional bureaucratic practices. A legal framework is being put into place including an IT Law, an Information Technology Management Reform Act (ITMRA), a Privacy Protection Act, and a Paper Reduction and Information Sharing Act. The first step towards e-government is to computerize government operations and activities. II.
ISSUES
•
Information technology infrastructure is underdeveloped – lack of computers and digitalization
• • • • •
Inefficient and time consuming administrative procedures Misuse of financial resources and not cost effective Existing computers are used only for word processing Government services do not meet the needs of citizens Low/lack of IT skills and knowledge within government and older population
III.
PROPOSED PROJECT
A.
Purpose and output Objectives:
• •
Build a modern ICT infrastructure Establish foundation for e-government in Viet Nam
201
Viet Nam
• •
Speed-up administrative reforms Enhance capacity and transparency of government activities
Output:
•
All ministries and departments in the central government and local governments are connected through a network and conduct activities though computerized applications
•
Implement “operation and management system” including integrated work-flow system, transaction system, e-mail system, editor and presentation system, and report system
•
Extranet links between agencies and bureaus
B.
Project framework
C.
Cost estimate and financing plan Design summary
Performance targets/indicators
Data sources/ reporting mechanism
Assumptions and risks
Impact Transparency in activities
Monitoring is easily carried out
Establish appropriate solutions of information exchange and promote electronic transactions
Software systems are applied in the agency
Support computerized systems of branches, enterprises and localities
Network infrastructures built Enhance IT awareness
Establish a coordinate committee
Resistance to change and new governing systems
Inter-agency meetings and establishment of a memorandum of understanding
Human resource Security, system stable, data integrity
Frequency of access being made by the public
Contributing to the successful implementation of electronic transactions Outcome Efficiency in Government operation and management activities Ability to monitor
202
More responsibility
Reduction in delays
Consultative meetings
Tools to export reports and statistics Timely reports Effective and efficient flow of information
Surveys Establishment of R&D
Cooperation of political leaders Cooperation of users
Viet Nam
Design summary
Performance targets/indicators
Data sources/ reporting mechanism
Assumptions and risks
Time and cost efficient System connection Data integration Information access and exchange Outputs Equip every central level agency (National Assembly, Government, specialized Ministries) and local level agency (working groups) with a network and computer infrastructure Use a standard application called “operation and management system” Links backbone between government agencies Activities with milestones
Computer systems and facilities
Turn-over of IT professionals
Backbone
Delays in implementation
Interactive software Information transfer between agencies
Inputs
Establish project management board
Government
Build project time table and schedule
Co-financing
Broadcast to public Consultant recruitment
ADB Beneficiaries Private sector Others
Establishment of coordinating committee Develop policies Setup and public standards Deploy pilot project Conduct assessment Multiply deploy Evaluate the project
203
Viet Nam
D.
Implementation arrangement COST ESTIMATES ($US million) Item
Government
Donors
Total cost
1. Consultants a. International consultants b. Domestic consultants
0.00 0.00
1.00 0.30
1.00 0.30
2. Equipment and software a. Equipment b. Software
5.00 0.00
15.00 5.00
20.00 5.00
3. Buildings and furniture a. Buildings b. Furniture
0.50 0.00
0.00 0.50
0.50 0.50
4. Training, seminars and conferences
1.00
5.00
6.00
5. Research, development and surveys
0.00
2.00
2.00
6. Miscellaneous administration and support costs
0.50
0.50
1.00
7. Contingencies
0.00
0.00
0.00
Total
7.00
29.30
36.30
The Coordinating Committee will include the Bureau of Government, Ministry of Foreign Affairs, Ministry of Finance, Ministry of Internal Affairs, and experienced experts. The Coordinating Committee will be responsible for setting up a consultant team (including international and local specialists), issuing reports, conducting surveys, and organizing meetings, conferences or seminar about any matters concerning the project. The Committee will additionally be responsible for pursuing the formulation of legislation, and will provide hardware and software applications for all central and local government agencies. IV.
204
BENEFITS OF THE PROJECT
•
Strengthen competence of the government at the central and local levels
• •
Enhance transparency and reduce corruption
• • •
Prepare for e-government, e-commerce, e-procurement
Establish the foundation for Viet Nam to modernize and take advantage of technological innovations Strengthen Internet and communication infrastructure Develop human resources and improve legal environment
Viet Nam
Title:
E-infrastructure
Proposer:
Mr. Tran Dang Quang, Expert, Department of Public Procurement, Ministry of Planning and Investment Country:
Viet Nam
Date:
June 2005
I.
INTRODUCTION
Strategies for the development of an e-procurement system vary from country to country. However, all strategies have the common purpose of establishing an e-procurement system, which is suitable to the specific social and economic situation of the country. In Viet Nam, despite the fact that an e-procurement system is yet to be established, gradual efforts have established the foundations for e-government. At present, The Public Procurement Bulletin, managed by the Ministry of Planning and Investment (MPI) has been published and an Electronic Public Procurement Bulletin shall be published at the end of this year. It is planned that all information relating to procurement activities will be published on the website. In order to support and sustain a website for procurement related information, human resource in operating and managing the system must be enhanced. The highest priority, however, is to develop and build an information technology infrastructure capable of supporting an e-procurement system. II.
ISSUES
Viet Nam has realized the strategic role of modernization and computerization in the process of economic integration. The trend toward eprocurement is indispensable. It is essential that Viet Nam design the einfrastructure for e-bidding and e-procurement. Current constraints on development are:
• • • •
Lack of information for bidders Absence of a legal framework on e-procurement Insufficient experience and IT skills Underdeveloped IT infrastructure
III.
PROPOSED PROJECT
A.
Purpose and outputs
• • •
Improve the effectiveness of state management on procurement Unify procurement information Publicize procurement for all domestic and international users
205
Viet Nam
• •
Save costs for concerned parties
•
Meet the requirement of e-government and economic integration
Improve competitiveness through the transparency of information
A nation-wide website for procurement information will come into operation by the end of 2005, therefore, the outputs of designing the einfrastructure are: (i) build the IT foundation for e-procurement; (ii) establish legal framework to enable and support e-bidding; and (iii) provide a training programme for e-bidding. Project framework Design summary
Performance targets/indicators
To provide an initial infrastructure for e-bidding and towards e-procurement
Build basic electronic processes for e-procurement
Data Sources/ reporting mechanism
Assumptions and risks
Goal Inter-agency workshops and establishment of memorandum of understanding
To make the legal framework for e-procurement in long periods
Outcome Improve the effectiveness of state management on procurement Unify procurement information
Publicize procurement for all domestic and international users Save costs for concerned parties Improve competitiveness through the transparency of information
206
Meet the requirement of e-government and economic integration
Anti-corruption and Seminars and efficient procurement Surveys activities
Confidence of entities and cooperation of entities
Viet Nam
Design summary
Performance targets/indicators
Data Sources/ reporting mechanism
Assumptions and risks
Outputs Build the IT foundation for e-procurement Legal framework to enable and support e-bidding Training programme for expanding e-bidding Activities Integrated bid notice/ electronic bidding system
A single window for bid information
Timely reports
Develop e-bulletin system
Reaching targets Single government portal
Populate e-bulletin and receive feedback
E-procurement strategy
Delivery of an e-procurement strategy – date
Workshop, seminars, training, consultative meetings
Study experience of other countries in developing e-procurement
Training in a developing e-procurement countries
Training course
B.
Obtaining bidding information
Build e-procurement strategy for a long time
Methodology and key activities COST ESTIMATES (US$ thousands) Item
1. Consultants a. International consultants b. Domestic consultants
Foreign fund
Agency
Total cost
30.00 20.00
0.00
30.00 20.00
20,000.00
0.00
20,000.00
3. Development portals and software
100.00
0.00
100.00
4. Training, seminars and conferences
80.00
0.00
80.00
5. Contingencies
50.00
0.00
50.00
20,280.00
0.00
20,280.00
2. Backbone infrastructure
Total
207
Viet Nam
C.
Cost estimate and financing plan
D.
Implementation arrangement
The project will be implemented by MPI. The step-by-step implementation plan will be as follows:
IV.
•
Integrated bid notice/electronic bidding: manages the bid information posting, the bidding results disclosure, integrated notice search, bidding-related information inquiry and supplier information
•
Construction of the procurement website at the central level must be completed then the procurement activities will be gradually conducted via this website
•
Develop a legal framework in Viet Nam: an procurement ordinance, e-transactions Law and other regulations
•
Training for the staff on the management and application of the e-procurement system
BENEFITS OF THE PROJECT
Expected benefits are: enhanced publicity of bidding documents and improved efficiency and transparency of government procurement process.
208
United Nations publication Sales No. E.06.II.F.15 Copyright © United Nations 2006 ISBN: 92-1-120468-2 ST/ESCAP/2406
Printed in Bangkok February 2006 – 665
