Ajay Sawhney, former Secretary IT&C & K.Bikshapathi, former Project Manager
Feb 01, 2016
Agenda for Presentation
Public ProcurementImplementation strategy & timeframePublic Private PartnershipBenefitsCritical Success Factors
Public Procurement – Quantum & Practices
State’s annual procurement US$ 2 billion to 3 billion
Category of procurements Works & Turnkey Contracts : 80- 90% Goods & Products : 10-15% Services (consultancy, facility management,
security services etc) : 5%Procurement Practices
Centralised Procurement ( Corporate) Distributed Procurement ( Delegation of powers)
Implementation Approach Political decision (2001) IT&C Dept & High level Steering Committee Training of Chief Information Officers (CIOs) Appointment of consultants (2001) RFP - business model & scope of eGP services
(2002) Selection of Service Provider Pilot – Go Live in 4 Depts/Agencies (2003) Evaluation of Pilot Scaling up & rollout to other Depts/Agencies (2004)
Strategic Alternatives Platform Model
Centalized platform - decentralised procurement Exchange Model
Join Existing Exchange Build New Exchange
Services Model Monolithic approach Incremental approach
Business Model Owned or PPP
Revenue Model Fixed or Variable cost Payable by Bidder or Buyer
Public Private Partnership Model
No capital cost to the Government State-of-the-art technology High quality resources Improved risk allocation – risk borne by the
entity best able to handle that risk Combining accountability with efficiency Services governed by Service Level Agreements
Role of Partner Service Provider
Implementation of the E-Procurement functionality across all departments
Customizing software Setup and management of hardware and
software for the Portal Training Helpdesk services Operations & Maintenance
Project Rollout Status
Depts/Organizations Added Each Year
Financial Year 2004-05 2005-06 2006-2007 Total
Departments 9 4 3 16
Public Sector Companies
7 6 9 22
Universities 0 1 4 5
Municipal Corporations
02 08 04 14
Municipalities 14 27 34 75
Autonomous Bodies
0 2 1 3
Total 32 48 52 135
eProcurement Status (March 2008)
20 Govt Departments 26 Public sector Units 104 Municipalities 10 Universities 500 Locations across the state 2000 govt users 11000 vendors Turn over
2003-04: US$ 400 Million ( 564 Nos) 2004-05: US$ 3200 Million ( 2215 Nos) 2005-06: US$ 3300 Million ( 9981 Nos) 2006-07: US$ 2300 Million (16046 Nos) 2007-08: US$ 3400 Million (10054 Nos)
38860 transactions
US$ 13 Billion
Range of Procurement
Goods (all types), IT Infrastructure, Medicines, Services
Works contracts, EPC - Turnkey contracts Highest value US $ 700m Irrigation project Lowest US $ 1200 drain in a municipality 65 bidders for a single tender 550 tenders closed on a single day (Sept 2008)
Benefits Demonstrated
Cost savings to the tune of US$ 650 m (5% of procurement costs) due to competitive bids
Improved efficiency (120 days to 32 days) Transparency Elimination of Contractor Cartels
Empowerment of Bidders Remote submission of bids Reduced bidding & incidental costs No more dependence on departmental officials
Cost Savings- AnalysisCase 1:COT
Year No. of tenders ECV(Cr) TCV (Cr) %
2001-02 188 755.29 735.57 (-)2.65
2002-03 125 558.36 510.07 (-) 8.65
2003-04 160 1101.69 884.21 (-) 19.74
2004-05 94 755.56 667.09 (-) 12.02
Type No. of tenders
ECV (Cr) TCV (Cr) %
eProcurement(2003-04) 107 733.55 549.93 (-)25
Conventional(2003-04) 53 368.14 334.78 (-) 9
eProcurement(2004-05) 90 725.52 638.29 (-)12.02%
Conventional(2004-05) 5 30.04 28.80 (-) 4.12%
Comparison between the two systems
COT derived additional savings due to eProcurement
Estimated/ Tender Contract Value
Transparency
Automatic e-mail to Bidders on tender publication Bid documents available online in public domain. Corrigendum in public domain No interface with departments upto tender opening Support documents are open to competitive bidders
soon after tender opening Tender evaluation status automatically notified to
bidders Procurement status in Public domain Effective tool for RTI Act
Critical Success Factors Support of top political leadership CIOs from each domain as project leaders High-level Project Implementation Committee Timely policy intervention Significant process re-engineering/
standardisation Active involvement of stakeholders Workshops/training Public Private Partnership Model Active helpdesk