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E-Government Procurement Handbook

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E-Government Procurement Handbook e-Government Procurement Handbook Electronic procurement has become one of the main e-government initiatives for many countries as they look to improve procurement through a more open, competitive, and transparent environment. E-procurement continues to prove itself as a viable alternative to manual processes, bringing cost savings and efficiencies. The Asian Development Bank has been a promoter of electronic government procurement (e-GP) as a key component for procurement reforms through active involvement in the Multilateral Development Bank Working Group on e-GP. This handbook aims to inform readers about e-GP, provide a reference for related concepts, and examine how e-GP implementations have taken shape in different jurisdictions worldwide. e-Government About the Asian Development Bank ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing Procurement Handbook member countries reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to two-thirds of the world’s poor: 1.7 billion people who live on less than $2 a day, with 828 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. ISBN 978-92-9254-322-8 Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines www.adb.org Printed on recycled paper Printed in the Philippines e-Government Procurement Handbook © 2013 Asian Development Bank All rights reserved. Published in 2013. Printed in the Philippines. ISBN 978-92-9254-322-8 (Print), 978-92-9254-323-5 (PDF) Publication Stock No. TIM125253 Cataloging-In-Publication Data Asian Development Bank. E-government procurement handbook. Mandaluyong City, Philippines: Asian Development Bank, 2013. 1. Government purchasing. 2. E-government. I. Asian Development Bank. The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. By making any designation of or reference to a particular territory or geographic area, or by using the term "country" in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area. ADB encourages printing or copying information exclusively for personal and noncommercial use with proper acknowledgment of ADB. Users are restricted from reselling, redistributing, or creating derivative works for commercial purposes without the express, written consent of ADB. Note: In this publication, “$” refers to US dollars. Photo Credits Cover: Jingwen Lu, Lei Kan 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines Tel +63 2 632 4444 Fax +63 2 636 2444 www.adb.org For orders, please contact: Public Information Center Fax +63 2 636 2584 [email protected] Printed on recycled paper Contents LIST OF TABLES, FIGURES, AND BOXES viii PREFACE ix ACKNOWLEDGMENTS x AbbreViations xi INTRODUCTION 1 1 THE CASE FOR E-GOVERNMENT PROCUREMENT 7 1.1 Definition of e-Government Procurement 7 1.2 e-Government Procurement Systems Plotted on Timescale 8 1.3 Importance of Public Procurement and Government Procurement 10 1.4 e-Government Procurement Objectives 11 1.5 Key Measurable Benefits of e-Government Procurement 16 1.6 Common e-Government Procurement Misconceptions 17 1.7 e-Government Procurement and Procurement Reform 18 1.8 Challenges of e-Government Procurement 19 2 POLICY, LEGAL, AND REGULATORY FRAMEWORK 20 2.1 Policy 20 2.2 Centralization versus Decentralization 23 2.3 Leadership 23 2.4 Institutional Roles 24 2.5 Procurement Processes and Practices 24 2.6 e-Government Procurement Operational Policies 26 2.7 Legal and Regulatory Framework 27 2.7.1 Signatures and Authentication 29 2.7.2 Public-Key Infrastructure 30 3 STRATEGIC CONSIDERATIONS FOR GOVERNMENT IMPLEMENTERS 32 3.1 Transition from Manual Procurement Process 32 3.2 Choice of e-Government Procurement Business Model 35 3.3 Single System or Multiple Systems 38 3.4 Software Selection and Implementation Considerations 39 iii iv Contents 3.4.1 Factors to Consider When Selecting a System 40 3.4.2 Contracting Considerations 41 3.4.3 Scalability 42 3.4.4 Flexibility and Customization 43 3.4.5 Data Considerations 43 3.4.6 Special Requirements 44 3.4.7 The Implementation History of the Provider 44 4 CHANGE MANAGEMENT AND CAPACITY DEVELOPMENT 45 4.1 Operational Requirements 45 4.2 Outsourcing e-Procurement Functionality—Independent Software Providers 46 4.3 International Cloud-Based e-Procurement of the Future 48 4.4 Country Experiences 49 4.4.1 India 50 4.4.2 Indonesia 50 4.4.3 The Republic of Korea 51 4.4.4 The Philippines 52 5 READINESS ASSESSMENT 53 5.1 Risk Assessment 54 5.1.1 Risk Assessment Methodology 55 5.2 Strategic and Architectural Alignments 56 5.3 Costs and Values 57 5.4 Interpretation 57 5.4.1 Using the Comparison Chart 57 5.4.2 Responses to Exceptions 59 5.4.3 Using the Standardized Indicator 59 5.4.4 Detailed Analysis 59 6 IMPLEMENTATION IN GOVERNMENT 61 6.1 Developing an e-Government Procurement Reform Strategy 63 6.2 Leadership and Institutional Structures 65 6.3 The Project Management Unit 66 6.3.1 A Reengineering Opportunity 67 6.3.2 Change Management 67 6.3.3 Engaging Stakeholders 67 6.3.4 Retain Control of the Project 68 6.3.5 Backup and Security Planning 68 6.4 A Phased Approach and Piloting 68 6.4.1 A Pilot Project 69 Contents v 6.5 Functional Specifications 69 6.6 Technical Specifications and Infrastructure 71 6.6.1 Interoperability Considerations 72 6.6.2 Security 73 6.7 Policy 73 6.7.1 System Availability Issues 73 6.7.2 Terms of Use 73 6.7.3 Liabilities 73 6.7.4 Bid Securities 74 6.8 Risk Management 75 6.8.1 Availability and System Recovery 75 6.8.2 Contractual Risk 75 6.9 Monitoring and Evaluation 76 6.10 Examples of e-Government Procurement Implementations 77 6.10.1 State Government of Karnataka (India) 77 6.10.2 Zanzibar by the United Kingdom 78 6.10.3 xchangewales by Wales 78 6.10.4 ProcServe in the United Kingdom 79 7 E-GOVERNMENT PROCUREMENT FUNCTIONALITIES 80 7.1 Spend Analysis 81 7.1.1 Acquisition Quadrant 83 7.1.2 Leverage Quadrant 83 7.1.3 Strategic Quadrant 83 7.1.4 Technical Quadrant 83 7.1.5 Discussion 83 7.2 e-Government Procurement Functionalities 84 7.2.1 Procurement Portal (Web Portal) 85 7.2.2 Procurement Management Information System 95 7.2.3 Standardization of Tender Documents and Interactive Bid Forms 98 8 E-GOVERNMENT PROCUREMENT TECHNICAL REQUIREMENTS AND SPECIFICATIONS 100 8.1 Security 101 8.1.1 Encryption of Bids 102 8.1.2 Security Governance 102 8.1.3 Authentication 104 8.1.4 Public-Key Infrastructure 105 8.1.5 Authorization 107 vi Contents 8.1.6 Confidentiality 107 8.1.7 Integrity 107 8.1.8 Non-Repudiation 107 8.2 User Security and Administration 107 8.2.1 User Identification and Password 108 8.2.2 Digital Signature Certificates 108 8.3 User Profile and Authorization Management 108 8.4 Server Certificate 109 8.5 Storage 109 8.6 Time-Stamping 109 8.7 Reporting, Logging, and Monitoring 110 8.8 Search Engine 110 8.9 Technical Interoperability 110 8.10 Application Interfaces and Technical Standards 111 8.10.1 Application Graphical User Interface 112 8.10.2 Graphical User Interface Interoperability 112 8.11 Multilingual Requirements 112 8.12 Usability 113 8.13 Online Help 114 8.14 Risk Management 114 8.14.1 Reliability 114 8.14.2 Scalability and Availability 115 8.14.3 Performance Assessment 117 8.15 Hardware 118 9 E-GOVERNMENT PROCUREMENT FROM A SUPPLIER POINT OF VIEW 119 9.1 Electronic Public Procurement Strategy and Tactics for New Suppliers 120 9.1.1 Develop a Sales Strategy 120 9.1.2 Research and Agency Contact 120 9.1.3 Pre-Contact Preparation 121 9.1.4 Basic Information Technology Capabilities 122 9.1.5 Internet Access 123 9.1.6 Software and Websites 123 9.1.7 Contracting and Payment Tools 123 9.2 Getting Registered 124 9.3 e-Tendering 124 9.3.1 Open e-Tendering 124 9.3.2 Restricted e-Tendering 124 9.3.3 e-Purchasing 125 Contents vii 9.4 Participating in e-Auctions 126 9.5 Post-Submission Activities 126 9.6 Getting Information, Training, and Technical Help with e-Government Procurement 127 9.6.1 Online Training 127 9.6.2 Courses and Road Shows 128 9.6.3 Supplier Input 128 9.7 Case Studies 128 9.7.1 Supplier Training in the Philippines 128 9.7.2 Supplier e-Procurement Training in the State of Karnataka 128 10 REFERENCES 129 Tables, Figures, and Boxes TABLES 1 Key Measurable Benefits of e-Government Procurement 16 2 Readiness Assessment Values 54 3 Risk Values 55 4 Impact Values 55 5 Architectural Alignment Values 56 6 Strategic Alignment Values 57 7 Examples of the Standardized Indicator 59 8 Traffic Light Display 60 FIGURES 1 e-Government Procurement Systems Plotted on a Timescale 9 2 Government Procurement Processes 25 3 Assessment Comparative Chart 58 4 e-Government Procurement Reform Strategy 61 5 e-Government Procurement Road Map: Phases and Stages 64 6 Explanation of the Four Quadrants 82 7 e-Government Procurement Applications 82 8 Classification versus Identification of Items 91 9 Information Registry and Procurement Management Information System 95 10 Authentication for e-Government Procurement 105 BOXES 1 Definition of e-Government Procurement 7 2 Key Policy and Regulatory Decisions 20 3 Change Management Considerations 33 4 Leadership 62 5 System Integration 80 6 Technical Considerations 100 7 Bringing Suppliers on Board 119 viii Preface Public procurement plays a central role in development and comprises a substantial share of the national economy in nearly every country.
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