Download e-Procurement Models

The Case for a
Generic
e-Procurement Model
J Satyanarayana
7th June, 2004
Agenda

Overview of public procurement

Requisites of Electronic Public
Procurement

A Generic e-Procurement Model

Next Steps
Dimensions of Public Procurement

Large Volume


Great diversity


Goods, Services & Works
Widely dispersed





~ Rs 3,00,000 crores annually
Central, State & Local Governments
Central & State PSUs
Statutory Bodies
Local Authorities
Radical reforms needed …to enhance



Transparency
Speed
Efficiency
Range of Procurement Services



Indent Generation & Approval
Indenting
Procurement Process









Tenders, Auctions, Reverse Auctions, Rate Contract, Catalogue
Buying
Demand Aggregation
Bid Evaluation
Award & Purchase Order
Supply Management
Quality Management
Inventory Management
Payments Management
MIS & EIS
Categorization of Procurements

By Category of Goods & Services




By Nature of Procurement





eTenders
Rate Contract & Catalogue Buying
Auctions, Reverse Auctions
LCB, NCB, ICB
By size / Volume of procurement



Goods
Services
Civil Contracts
High Value, low volume
Low value, High Volume
By Portfolio of services needed





Requisition, Bid Process
Evaluation, Award, PO
Supply, Quality check, Inventory Management
Payment, Accounting, Audit
MIS, EIS
Procurement process Matrix
Item to be
procured
High Value,
Low Volume
Low Value,
High Volume
Goods
HG
LG
Services
HS
LS
Civil Works
HW
LW
Business Models
HG,HS, HW
LG,LS,LW
Sophisticated software,
Custom Built
Generic software
Value-based
remuneration
Volume-based
remuneration
Suitable for ICB, NCB
Suitable for LCB, R/C
A Generic
e-Procurement Model
Requisites of the model



Neutral to Technology or product
Creates a multi-player, multi-technology
environment
Gives a choice of service providers




Scalable, secure, interoperable
Promotes




to the buying departments
to the suppliers
Competition
Cost-effectiveness
Value-added services
Leads to procurement reform
Process Requirements of Model
Item To be
procured
High Value, Low Volume
Code
Example
Low Value, High Volume
Code
Example
Goods
HG
Medical Equipment,
Engineering Equipment,
Scientific Equipment ..
LG
Medicines,
PCs & Peripherals
Stationery..
Services
HS
Consultancy Services,
e-Government Services,
Legal Services,
Professional Services
LS
Maintenance Services
Facility Mgt Services
Printing, Dispatch &
Communication
Services
Civil Works
HW
Bridges,
National Highways,
Airports, Ports,
Building Complexes
LW
Small roads,
Small buildings,
Maintenance works
Business Requirements of Model

Different Revenue Models to suit different
categories of procurement processes




Slabs to accommodate volume discounts
Permit different PPP models





% of value of procurement
Transaction-based
Licensing
ASP
JV
Mechanism in place to enforce rigid SLAs
Rapid growth of eGP market
e-Procurement Technology Model
BUYERS
XML
HG
HS
LG
XML
e-Procurement
Exchange
XML
LS
XML
HW
Gateway
XML
Suppliers
LW
Next Steps
Suggested course of action

Commission a comprehensive study

Identify a partner

for creation of National eGP Infrastructure

Create a Core Governance Group for eGP

Bring in a comprehensive legislation on eGP
Scope of the comprehensive study(1)




Study of 6 different procurement models
Study of different procurement processes
Study of international best practices
Service definitions



BPR
Normalization of procurement practices
Design of technology model






Procurement model
Gateway & exchange
Common registration & Single-Sign-On
Metadata standards
Security, Digital Certification
Delivery Channels
Scope of the comprehensive study(2)

Design of a Business Model





Design of Change Management Plan







PPP Model(s)
Revenue Model
Principles for enrolment in Exchange
Org Model & Governance Structure
Process Reform
HR Management
Legal Changes
Organizational Reform
Conduct of POC
Design of RFP
Bid Process Management
Thank You
[email protected]