Design, Implementation & Roll-out
of e-Procurement
May 2013
Kang-il Seo |
Deputy Director, International Cooperation Division
Public Procurement Service (PPS), the Republic of Korea
Contents
Ⅰ. e-Procurement in Korea
Ⅱ. How did we get here?
- Choosing the model & consideration factors
- What’s in the law?
- the Roll-out
Ⅲ. Impact of e-Procurement
e-Procurement in Korea
Korea Online e-Procurement System (KONEPS)
KONEPS is the single portal for public procurement info in Korea
End-to-end Functional Coverage
KONEPS processes the entire procurement procedures through sub-systems:
e-bidding, e-contracting, e-ordering from online shopping mall and e-payment
“KONEPS”
Korea
ON-line
E-Procurement
System
e-Notice
e-Bidding
e-Bidding
e-Contracting
e-Payment
Online
Shopping
Mall
e-Ordering
e-Procurement in Korea
In 2012, 66% of Korea’s total public procurement($101 billion)
was conducted through KONEPS
User
Registration
e-Bidding
• 45,000 government agencies
• 244,000 registered businesses
• 93% of all bids are conducted online
• 24M bidders participated in 292T e-bidding
• Total transaction value : $42 billion
e-Contracting
& e-Payment
• 657T contracts are electronic(99% of all contracts)
• 100% of all payments are electronic
Online
Sopping mall
• 500T Purchase Orders issued online(99% of all POs)
• Total e-Mall transaction value : $12.5 billion
2
e-Procurement in Korea
One Stop Service through Data Integration
KONEPS exchanges data with 140 external info systems for supplier information,
bid evaluation, bonds and payment, minimizing paper document submissions
Before
Public Buyer
Bid
Ministry of Strategy
and Finance
Industry
Associations
Supplier
Surety
Companies
National Tax
Office
Construction
Authorities
Credit Rating
Companies
CertificationRelated agencies
e-Procurement in Korea
One Stop Service through Data Integration
KONEPS exchanges data with 140 external info systems for supplier information,
bid evaluation, bonds and payment, minimizing paper document submissions
After
Contract
Delivery
Ministry of Strategy
and Finance
Industry
Associations
Public Buyer
Credit Rating
Company
National Tax Office
KONEPS
Construction
Authorities
Surety Companies
e-Bid
CertificationRelated agencies
Supplier
Korea Financial
Telecommunications
& Clearings Institute
Choosing e-GP Model
e-Procurement System
Procurement process involves the exchange of information, agreement
(negotiation and contracting), and settlement (delivery and payment).
e-Procurement system is an intermediary that enables online
processing of these activities
Intermediary
Buyer
Information
Exchange
Agreement
Settlement
Electronic platform
Supplier
Choosing e-GP Model
State Investment vs. Public Private Partnership
PPP
 Complete outsourcing
(development & operation)
Hidden costs
- Risk of lock-in effect
(limits competition)
Need dispute settlement
mechanism (service fees, etc.)
State Investment
 Government’s operation
(facility management
outsourcing)
 Needs operating agency with
expertise in public
procurement
 Certain level of internalization
of technological resources
 Easier to share govt.
administrative database
Choosing e-GP Model
Harmonization with e-Govt. Plan
Government e-Procurement system was implemented as one of 11 e-Govt. projects
Choosing e-GP Model
Setting the Goals
Single Window for Public Procurement
All public tender notices and related information at a single website
Bidders can participate in all public biddings after one-time registration
Digitalization of Entire Procurement Cycle
Entire procurement processes from supplier registration, bidding
through to payment are conducted via the internet
Integration with Other Information Systems
Maximize the impact of digitalization by using database available at
other public authorities
Choosing e-GP Model
Gateway to Government Procurement
Integrated Information & Shared Use
E-Procurement Portal
Comprehensive Information Contents
Integrated Information Search
Customer Service
Comprehensive information on public
bids and bid awarding
Access to data from public authorities
and industry associations
Shared use of information
Standardized Procurement Process
Standardization of Data
ASP for public institutions
Services for suppliers
System development for the System
Operation Authority
Efficient Procurement Process
One-time registration for participating in
all public bids
Reducing the paper document
submissions by bidders
Integrated
e-GP
System
Standardizing Product Catalog based
on UNSPSC
Creation of e-Catalog
Standardizing 149 e-Document forms
Reliable e-Document Exchange
Conformity to ebXML international
standards
End-To-End security measures with PKI
encryption
Security assurance
Legal Framework
Governing Laws (1)
No separate primary legislation for e-Procurement until Feb. 2013
e-GP was rolled out without mandatory-use provisions (except tender notice)
Legal Framework
Governing Laws (2)
e-GP could be implemented under existing laws on e-Commerce
Rolling Out
Training and User Support
• Nation-wide training sessions
• Marketing visits to public entities
• Web Call-Center
- 60 staff offering 4,585 consultations daily via
phone and video-conferencing
In the early onset of e-Bidding,
PPS held 130 training sessions
in 2001 and operated training
courses at 23 locations
98%
Incentives
• Discount for service fees when procurement
request is made via KONEPS
• e-GP usage was included in the governmentwide performance evaluation criteria (‘05’09)
40%
20%
2002
2006
2010
e-Contracting Ratio
Impact of e-Procurement
Increased Transparency
Real-time information disclosure
- Bidding results and contract details disclosed to the public on-line
- Peer monitoring on fair results
Objectivity in bid evaluation
- Bid evaluation based on objective, validated data
Informed decision-making
- Traceable prices and specifications
- Reduced risks of biased decisions from
information asymmetry
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Impact of e-Procurement
Transaction Cost Savings
KONEPS is saving transaction costs of
USD 8 billion annually
Transaction Cost Savings
- Reduced visits
- Reduced labor costs
- Private Sector : USD 6.6 billion
- Public Sector : USD 1.4 billion
$ 6.6 bn
Increased efficiency
- Receiving bids, validating related docs.
and selecting the winning bid
Before over 30 hrs
After less than 2 hrs
- Reduced lead-time
- Streamlined Process
$ 1.4 bn
- Reduction of 7.8 million pages of paper
documents per year
Public Sector
Private Sector
13
THANK YOU