IBIMA Publishing Journal of e-Government Studies and Best Practices http://www.ibimapublishing.com/journals/JEGSBP/jegsbp.html Vol. 2010 (2010), Article ID 315295, 14 pages DOI: 10.5171/2010.315295 National models of public (e)- in Europe

Francesco Bof 1 and Pietro Previtali 2

1Assistant Professor of Public Procurement Management SDA Bocconi School of Management, Researcher for CERGAS (Research Centre on Health Care Services Management) Via Bocconi 8, 20136 Milan, Italy

2Assistant Professor of Business Organization Business Research Department, University of Pavia Via S. Felice 7, 27100 Pavia, Italy ______Abstract Public Procurement of goods and services is a strategic activity for Governments for at least three reasons: a) it has a relevant economic impact b) it is relevant for Governments’ public services and c) it affects both Nations’ competitiveness and citizens’ welfare. Moreover, observing the EU context other two reasons contribute to its relevancy: d) the juridical panorama connected to it has strongly evolved in the last ten years e) at a central national level, there exist many institutional models and e-procurement solutions none of which has yet emerged as the optimal one. European agreements on public tendering and procurement together with the existing central public procurement models and related ICT applications aim to create a common framework based on social goals and key principles (e.g. Maastricht Treaty).

First the paper will analyse and review the quite unexplored literature concerning the public procurement evolution in the last decade, expounding the benefits of innovative solutions through procurement systems, mostly connected with ICT implementation, in order to understand if and why the role of central public (e) procurement should be developed. Secondly, in order to understand how Public Procurement should be developed, the paper will investigate EU national models adopting a Central Procurement Department aiming to purchase goods and services for the public bodies. Finally, the paper will identify the strategic and organizational specificities of the Italian model, discussing the role of e-procurement platforms inside the whole system, both under an organizational and economic point of view.

Keywords Public procurement, e-procurement, Central Procurement Departments, e-government, public- private relationship ______

Introduction In the public sector, e-Procurement is a The of goods and services in the collective term for a range of different public sector is central because it supports technologies that can be used to automate all functions of government; each the internal and external processes governmental unit needs supplies and associated with the sourcing and ordering equipment to accomplish its mission (Thai process of goods and services. Across the and Grimm 2000), that’s the reason of the EU e-Procurement is at an evolutionary application of the ICT to procurement in stage. However, despite the variations in this context. the adoption of e-Procurement across member states, the trend towards its

Copyright © 2010 Francesco Bof and Pietro Previtali. This is an open access article distributed under the Creative Commons Attribution License unported 3.0, which permits unrestricted use, distribution, and reproduction in any medium, provided that original work is properly cited. Contact Author : Pietro Previtali. e-mail: [email protected] Journal of e-Government Studies and Best Practices 2

acceptance is strong, with the majority of simply as extensions of commercial e- national governments developing Procurement applications because strategies to expedite the implementation government institutions pursue a wide of e-Procurement projects. This diversity of variety of goals due to their different government implementations reflects the nature. Within this context the political and variety of commercially available legislative environment in which public technologies , business models , and product sector institutions operate calls for coding (classification) schemes (NECCC conformity to a range of requirements that 2001). have little or nothing to do with economic Much of the e-procurement literature to output (Maniatopoulos 2004). date has focused on early adopters. The Regardless of whether adoption is viewed particular areas of interest in these studies from the buyer’s or the supplier ’s relate to system implementation, perspective it is apparent from the last few identifying efficiency effects, speculating decades of research that organizations face about the potential changes in supply chain a plethora of challenges when configuration that may occur, and positing implementing driven innovations such as e- that e-procurement will have a major procurement (Larsen, et al., 2002). impact on the function by leading to its Regardless of the perspective taken, there outsourcing or conversely raising its is widespread consensus among the above- strategic role. mentioned sources on which components As emphasized by Thai and Grimm (2000), constitute the concept of e-procurement one of the most important challenges in and what the benefits of e-procurement are is how to best (Neef 2001). Those benefits are both utilize information technology in an age of tangible and measurable with direct or communications revolution. Numerous indirect effect on cash flow such as price researchers have discussed this challenge savings, and intangible such as cultural under the label “e-procurement.” The issue change and enabling e-Business into the has been discussed both in the public sector. On-line purchases and technological perspective (Panayiotou et al. payment for goods and services in virtual 2004; Liao et al. 2003) and the managerial markets constitute crucial elements of e- perspective (Devadoss et al. 2003; procurement. Successful adoption leads to Coulthard and Castleman 2001; Oliveira potential benefits, which include the and Amorin 2001; Rajkumar 2001). reduction of transaction costs, operational Here it is useful to present the main studies efficiencies, and a better foundation for focused on the adoption of e-procurement decision making. Even if technological from the perspective of public sector requirements are met and the institutions. In their study about the implementation of e-procurement systems adoption of e-procurement in Australia seems feasible, from a managerial point of Coulthard and Castleman (2001) focused view implementation has proven to be a on the possible differences between the challenging venture. adoption of eCommerce by businesses and Heywood et al. (2001) proposes that there public institutions. Their assumption was should be three potential levels of benefit that public institutions pursue a wide achievable from e-Procurement: variety of goals. These goals go beyond 1. Transactions , focusing on e-enabling mere efficiency and streamlining of the purchasing process, benefits. Andersen (2004) also focuses on 2. strategic sourcing , using the newly the public sector as the potential adopter of aggregated control information to e-procurement. However, Andersen enable better and cheaper sources of reaches similar conclusions as Coulthard supply, and and Castleman, namely that there are no 3. market transparency , facilitating unambiguous economic or strategic innovation and collaboration across outcomes of e-procurement adoption. the supply chain. Public sector institutions have different objectives towards the implementation of As noted by Nelson et al. (2001), e-Procurement and those cannot be seen purchasing accounts for the majority of 3 Journal of e-Government Studies and Best Practices

organizational spending. As such, the which, at times, contains the enthusiasm advent of web-based electronic for implementing e-procurement. procurement has been heralded as a Panayiotou et al. (2004) confirmed this “revolution” because of its potential to belief in their empirical analysis of e- reduce the total cost of acquisition (Rai and procurement adoption in Greece. Their Tang, 2006). It is also expected to impact conclusion was that implementation must on the nature of supplier governance, be achieved as an “incremental change” either reinforcing market-based where technological solutions apply to relationships (Barratt and Rosdahl, 2002) regulations and policies. or encouraging virtual hierarchies (Brousseau, 1990). Finally, the e- Most purchases in public sector institutions procurement revolution is expected to require that a bureaucratic procedure be enhance the status and influence of the followed. The majority of items are bought purchasing function within organizations on requisition. This means that a great deal (Croom, 2000; Osmonbekov et al., 2002). of effort is put into sending forms back and The development and implementation of forth in the system. The internal electronic commerce business models, such coordination costs are therefore high with as a procurement portal in organizations is respect to the contracting procedure for a challenge that goes beyond mere commodities. As pointed out by Berryman technological functionality (Larsen et al. et al. (1998), electronic procurement of 2002). Top management support, commodities represents the greatest organizational adaptation, and training of potential for savings. E-procurement employees are examples of critical issues simplifies work procedures and automates for the successful implementation of any processes, for example in order processing IT-system (Kawalek et al. 2003). For the and the handling of invoices and payments. implementation of e-procurement in the This, combined with the regulated public sector, an extra set of factors is tendering processes, makes the idea of considered to be influential. These include automating procurement an attractive the financial risk, risks in building the option compared to the status quo. portal, and legislative issues (Oliveira and Amorim 2001). Oliveira and Amorim suggest that three Research methodology types of models should be considered in In order to understand the state of the art order to meet the specific demands related and how the role of central public e- to implementation of public e- procurement should be developed we have procurement: analysed different situations in old 1. The public model. Here, all tasks, European countries. In these countries we including the investment and the risks have observed the presence and the in building the portal, are taken by the relevance of e-public procurement projects government upon itself. either at a regional level or at national level 2. The private model. Here, all tasks are in order to centralise the purchasing of taken by private entities that assume products or services with all the relative the investment risks of the project. advantages. In order to study the use of 3. The mixed model (Public-Private public e-procurement in EU, various Partnership). approaches have been adopted. Data have been collected using a content study of Rajkumar (2001) pinpoints the managerial major central and local government challenges by listing critical success factors websites in the most developed European of e-procurement implementation. These countries. include the definition of an e-procurement strategy, re-engineering of procurement To understand the Italian experience, we processes and management of have conducted a survey on the Public expectations. The re-engineering of Administration eMarketplace e- processes in the public sector is in itself a transactions for the last four years, through very demanding process (Andersen 2004) the elaboration of transactional data. The Journal of e-Government Studies and Best Practices 4

methodology is a case study approach. The The European central purchasing bodies research case study has been defined as a method for learning the “right” questions to The use of eProcurement in the ask. That is, the purpose of case studies is management of the purchasing process said by some researchers to generate within Public Entities is a hot issue all over hypotheses rather than to test or confirm Europe where many local or central them. The method involves an in-depth, projects have been undertaken in order to longitudinal examination of a single spread eProcurement in Public instance. In our research, we have used the Administration. The 2004 European research case study as a method to learn directive regarding public calls for tender about a complex instance, such as the has been acknowledged only in 2006 in public e-procurement, based on a many European countries (e.g. Denmark comprehensive understanding of that incorporated the European Directives instance obtained by extensive description before). However many countries are and analysis of that instance taken as a considerably active and interested in the whole and in its context. subject and have been investing resources We’ve adopted an “illustrative approach” to in the adoption of eProcurement case studies, which primarily describes databases/platforms for Public what is happening and why, to show what a Administration purposes. situation is like. This can help in the interpretation of public e-procurement The Member States of the EU need phenomena, particularly because we have organisational structures to carry out reason to believe most practitioners and public procurement functions. These tasks academics know too little about the Italian range from the drafting of relevant experience. legislation and development of public procurement policies to the training of The data compiled relate to the following procurement officers and publication of dimensions: contract notices. Although differing in 1. value and number of transactions terms of responsibilities, functions and by six months’ intervals and by tasks, these bodies have several features in geographic area; common. In comparison with the fairly 2. value and number of transactions uniform picture found in the new Member divided by modes of acquisition, States, the “old” Member States show a specifically between Request for more diversified picture as we can see quotation (RFQ) transactions and below. direct transactions or direct order of acquisition (RFO) over half- The platform organization is usually yearly intervals and by geographic managed by agencies appointed by central area; entities: such agencies manage the 3. average value of RFQ and RFO as relationships with public entities and well as the flow over six-monthly promote the use of the platform. The intervals; analysis of all the various instruments 4. number of active suppliers by available on the public eProcurement geographic area and the flow over portals reveals a strong preference for six-month intervals; auctions and calls for tenders rather than 5. number of active suppliers by catalogues and digital markets. It is also catalog type (ICT, office, services, interesting to assess how the different health materials, others) and the European portals offer their services to flow over six-monthly intervals; users. In some countries, Italy for instance, 6. number of active suppliers by type the use of the national eProcurement of catalogs that cover a single area system is free both for entities and per catalog (e.g. ICT only), 2 areas suppliers. (In other frequent cases) In per catalog (e.g. ICT and services), Europe there are several examples of etc. .. platforms that charge for their services both users and suppliers. There are also 5 Journal of e-Government Studies and Best Practices

different revenue policies within each "gatetrade.net", which is established and country, where different payment methods owned by Maersk Data, Danske Bank, Post are applied to different eProcurement Denmark and telecoms company TDC. The instruments (in some cases suppliers pay Agency for Governmental Management co- for a catalogue update, in some others ordinates state interests in the portal. Use entities are requested a fee for the use of of DOIP is recommended for all public the platform; sometimes suppliers are bodies, but it is not mandatory. Some requested a percentage fee on the goods regional and local authorities make use of sold). private marketplaces, and the state-owned company National Procurement Ltd. (SKI) The body responsible for the development has also set up simpler eTendering of eProcurement in Austria is solutions systems (NetIndkøb and Bundesbeschaffung (Austrian Federal Netkatalog). UBL has been compulsory for Procurement Company ltd.) which is sending invoices to the Public wholly part of the federal Ministry of Administration since January 2004. Finance. Hansel Ltd is the Finnish Government’s Most of the contracts are framework central procurement unit. It is a state agreements. The shop contains more than owned company that functions under the 300.000 items from about 200 suppliers in Ministry of Finance and consists of over 50 30 product categories. The services are experts within different sectors. The used by 10.000 users from 2.000 different company objective is to create savings for purchasing departments all over Austria. In the Government by making the 2006 the Agency conducted about 330 procurement processes of the public contracts with a total purchasing volume of administration more efficient. The € 720 million. About 20% of the volume company also promotes the procurement was handled over the eOrdering and of high quality products and equal eCatalogue system. treatment of suppliers when offering tenders. Hansel is responsible for Launched at the beginning of 2008, the procurement decisions, contract Belgian public procurement portal administration and contract management. provides links to portals and platforms Approximately five thousand contracting which currently cover three of the various authorities issue calls for tenders through phases of the procurement process, the eProcurement system, settling more namely: eNotification, eTendering and than two hundred tenders per year and eCatalogue. The benefits of the system creating an annual total purchasing value mainly focus on administrative of €168 million. simplification and faster and more transparent ordering processes. In France, all central government ministries – with the exception of the In Denmark, the Public Procurement Portal Ministry of Defence, which has its own (DOIP) is an electronic marketplace to platform (e-achat platform) – can meet the which both private and public purchasers requirement by using the government wide and their suppliers have access and whose eProcurement Platform. The platform functionality, interface, security and allows public sector bodies to publish calls transaction costs are regulated by the for tenders online and receive electronic public sector. Launched on 3 January 2002, bids. It is commercialised by UGAP, an it was among the first public procurement inter-ministerial service dedicated to portals in Europe. DOIP, which results from enhancing the efficiency of public a close collaboration between the public procurement. The web-based platform and private sectors, is a web-based system helps public entities accept bids submitted based on Oracle exchange software. The electronically by 1 January 2005 for all current version supports eAuctions, contracts worth over EUR 230.000, a eCatalogues and integration with back- mandatory target set by a decree of 30 office systems. The portal is operated by April 2002. The use of the platform by local Journal of e-Government Studies and Best Practices 6

authorities is optional, as they are free to centrally by Verva (the Swedish develop their own eProcurement solutions Administrative Development Agency) and or to adopt commercial solutions if they is available for national authorities, wish to do so. At regional and local level, government agencies, regions and several eProcurement platforms already municipalities. exist and others are being developed. At the present time there is no central The German Federal eProcurement eProcurement infrastructure in the UK. Platform is called E-Vergabe. The Federal However, the Office of Government Procurement Agency, based in Bonn, Commerce (OGC) operates Catalist, a manages purchasing for 26 different catalogue-based electronic procurement federal authorities, foundations and scheme. Catalist provides public sector research institutions that fall under the organisations with a simplified means of responsibility of the Federal Ministry of the procuring and contracting for a wide range Interior. of products and services (information technology, telecoms services, professional In December 2001, the Irish public sector services, facilities support), based on a procurement portal E-Tenders was series of Framework Agreements signed by launched. ETenders is the Irish central OGCbuying.solutions with a number of government procurement portal. It suppliers. provides information and tools for electronic public procurement and The Italian experience advertises notices for EU and sub-EU The body responsible for the development threshold contracts for the Irish public of eProcurement in Italy is an independent sector including central government, local agency called Consip (Concessionaria authorities, Health Boards and hospitals, Servizi Informativi Pubblici - Public universities and schools. Information is Information Services Agency). Consip is a updated on a daily basis and is provided limited joint-stock company owned by the free of charge to all registered users. Italian Ministry of and Finance that provides consultancy and IT solution There are two main target groups, i.e. management in the field of eProcurment. public sector purchasing officers and their Since 1 July 2007, the use of the Public prospective suppliers. The eTenders portal Administration eMarketplace (MEPA) has has 4,000 public purchasers and 40,000 become mandatory for all central public suppliers registered. administrations for the purchase of goods and services valued below the EU The Swedish government has not threshold. Through this tool, Public implemented a central electronic public Administrations can make their purchases procurement portal as this is deliberately with a direct order or a request for left up to private operators. Several quotation to suppliers, comparing goods privately owned and operated portals exist and service features published on instead, some of which concentrate on electronic catalogues. public procurement (e.g. Opic and Allego). Anyway a public Procurement information The first illustration depicts the number of portal is maintained by the Swedish the transactions (figure 1), semester by National Financial Management Authority; semester over the period running from it serves as an information database on the January 2004 through September 2008. different framework agreements procured

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23616 25000 21710

20000

15000

10000 6443 5854 5477 5982 3821 5000 2721 381

0 2004 2005 2006 2007 2008

Figure 1: Number of the transactions, evolution by semester

From the first semester of 2004 - the fact in 2006 there were around 6000 starting point of the analysis - up to the transactions per year while in 2008 there second semester of 2005, the trend in the are around 22.000-23.000 transactions a number of transactions has always been on year. the rise, going from 381 to 5.854 transactions by the end of 2005. This This reading shows a gradual learning process of steady growth has slightly process on the part of the supply and decreased by the first semester of 2006 just demand elements, leading to a saturation of to go up again during the second semester the market in late 2006. In December 2006, of the same year and carry on till June the Law No. 296 of 27th December has 2008- the month in which the analysis introduced the compulsory membership to concludes. Taking into consideration the the system of conventions for public time scope that runs from the second institutions and certain categories of semester of 2005 through June 2008, two private assets identified annually by the different situations emerge, however. Up to Ministery of Economy. Hence the large (until) June 2007 the process of growth in increase in transactions since the second the number of transactions was slightly half of 2007 was clear. closer to a situation of stability, while in the second semester of 2007 a clear The second illustration has still as acceleration tripled the number of dimensions the amount and number of transactions. The first half of 2008 marked transactions, divided into demand (RFQ – another increase in the number of request for quotation) and direct transactions, but it seems that there was a transactions (DT), through an annual scope movement towards (a situation close to) of time (table 1). stability as in 2006, but at a higher level; in

Journal of e-Government Studies and Best Practices 8

Table 1 Amount and number of transactions for DT and RFQ

Number Amount (€)

Year DT RFQ DT RFQ 2004 2.520 426 4.391.716,361 4.947.443,360 2005 7.721 1.253 12.699.547,334 17.144.210,030 2006 9.862 1.597 12.920.627,682 24.971.498,833 2007 23.393 4.760 30.593.134,495 53.021.577,794 2008 19.199 4.507 20.861.319,495 42.528.345,454 (1 st semester) Total 62.695 12.543 81.466.345,368 142.613.075,471

This table demonstrates that public RFQ is therefore a more complex institutions have been using since 2004 purchasing procedure than DT. most of the DT tool more than RFQ one, even if the total amount of transactions According to the characteristics of the two through RFQ is decidedly greater than types of e-Procurement, DT is prompter through the DT. DT allows public and more straightforward than RFQ, which institutions to purchase directly from the e- explains why the number of transactions Catalog at pre-set prices. There is the through DT supersedes the ones done possibility to choose a product from this through RFQ. Even if RFQ allows the catalog, by investigating the general making of requests on suppliers, it will conditions of contract, filling the order require a greater commitment from both form (number, place of delivery) and the requesting and the supplying party, signing the form with the digital signature which affects the element of immediacy. that must then be sent to the supplier Public bodies seek to obtain from suppliers through the system. The contract is offers tailored to their needs and therefore automatically and immediately a binding they buy more expensive products because agreement between the parties in question of the greater focus in the purchase and and therefore the supplier is obliged to willingness to spend more money. RFQ implement the agreement respecting the transactions are of higher value than the terms and conditions laid down. DT ones. The greater focus is on the purchasing process and therefore they will The RFQ is a competitive selection process have more money at their disposal . through which public authorities make a request of supply to certain groups of The third report describes the suppliers or to all qualified suppliers so development of the average value of RFQ that they are able to make their bids. The transactions, the average value of the direct Suppliers in question should satisfy the transactions and the flow of these values money criterion and provide details related over half-yearly intervals (figure 2). The to the supply, including the technical ones average value of transactions made from a quality point of view. The contract is through the DT is much lower than the awarded to those who fulfill the price- average value of the transactions made quality combination. The assignment of through the RFQ, as the number of the RFQ is carried out at the discretion of former greatly exceeds the number of the public authorities. They can, for example, latter and the total amount of transactions pick suppliers that charge the lowest prices through RFQ is greater than that of and promptly deliver on post-sale services. transactions through DT for the reasons outlined above.

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35000

30000

25000

20000

15000

10000

5000

0 2004 2005 2006 2007 2008

1st SEM DT 2nd SEM DT 1st SEM RFQ 2nd SEM RFQ

Figure 2: Average value of RFQ and DT transaction, evolution by semester

Analysis and reflection The foundations of the European the long run, computerizing public community are the four freedoms: the procurement practices impact on the way Single Market, the free movement of goods, in which national public purchasing services, capital and persons; in line with practices are organized. Successful this idea are the principles of transparency, implementation of e-procurement may competition and the prohibition of national require changing administrative practices, discrimination. The two new directives not only those directly linked to the have come into force in 2006 giving a procurement process, but also those uniform legislative framework all over indirectly involved, such as budgetary Europe and ensuring these principles in the reviews. The sooner such reforms are conduct of electronic public procurement. implemented, the better for European citizens and businesses. Modernizing and opening up procurement markets across borders is crucial to In order to understand how the role of Europe's competitiveness and to create central public e-procurement should be new opportunities for businesses. developed we have analysed different Information technologies can contribute to situations in old European countries and reduce costs, improve efficiency and we can assert that the trend of the public remove trade barriers. If online procurement is moving toward a procurement is generalised, it can save centralization rather than a governments up to 5% on expenditure and decentralization. In every country we up to 50-80% on transaction costs for both observed there is an e-public procurement buyers and suppliers. However, the project or reality either at a regional level inappropriate introduction of e- or at a national level in order to centralize procurement carries high risks of market the purchasing of products or services with fragmentation. The legal, technical and all the relative advantages. organizational barriers that may result from procurement online are one of the Looking at the organizational structure, all greatest challenges for policy makers. In EU Member States have organized core Journal of e-Government Studies and Best Practices 10

functions in a centralized manner, while moved towards a stronger centralization of supplementary functions may be carried functions and a limited number of players. out by a broad spectrum of bodies, including the private sector, at both central Whatever organizational model is chosen, and decentralized levels of the public it appears that public procurement is administration. usually the responsibility of the Ministry of Finance, the Ministry of Economy, or the The Public Purchasing bodies can have a Ministry of Works. Some Member States centralized or semi-centralized have established public procurement procurement structure, with a high offices or agencies, which are given a more concentration of procurement functions independent status under parliament or allocated to a few central institutions or a directly under the government, while decentralized procurement structure, with others act as departments within a dispersed concentration of procurement ministerial structures. Some functions of an functions allocated to a range of bodies operational nature are carried out by within the public administration. In the public firms. Moreover, observing the federal Member States – Austria and common practice, the administrative Germany – and in Member States with capacity is not only linked to the amount of devolved government – such as the United staff and financial resources available Kingdom, with the Scottish Parliament and within central procurement institutions, the Assemblies in Wales and Northern but it needs to be more broadly defined. Ireland, often the federal states or units The total accumulated capacity of Member have procurement institutions that carry States to support public procurement out limited, or even quite extensive, operations may be strong if all actors in the procurement functions. Moreover, in many society are included, such as associations of Member States the regions, provinces, local and regional authorities, large districts, and municipalities may have contracting entities and utilities, training similar bodies, which are either centralized institutions, and law firms, and it is thus or decentralized. not limited to the capacity of central institutions. In Italy all regions, provinces, and municipalities have procurement units that Public procurement in most Member States carry out some of the relevant functions. appears to be financed from the general Similarly, the devolved parts of the United governmental or ministerial budget, and in Kingdom have their own public all Member States the greater part of procurement institutions. The functions of procurement costs is covered by such dependent branch offices are therefore budget. rather limited. By contrast, the procurement institutions of states, regions As regards the technical solution, probably or municipalities may carry out a wider the best informatics solution for the e- range of activities, including the procurement platform is outsourcing it to development of local procurement policy, an external specialized company or using administration and monitoring functions, an ASP solution (Application Service publication and information functions, Providing) which means renting the advisory functions, and training and platform. The informatics research functions. In Member States with standards used in procurement processes a decentralized procurement structure that and information exchanges like e- is characterized by a dispersed ordering/e-invoicing, e-tendering/e- concentration of procurement functions, awarding or electronic catalogues are XML the relevant tasks are divided between and UML. Moreover, to contribute to the many different institutions. However, in the cooperation among different institutions near future, Finland might remain the only and countries CEN/ISSS, UN/CEFACT and country with such an organization, since all OASIS are used. the other countries observed have already 11 Journal of e-Government Studies and Best Practices

However, in order to modernize European Conclusion public procurement markets and to make Despite the differences in the Member these more open and competitive we must States, the use of electronic means and remember that the Member States are methods on a wider scale in the various following an Action Plan proposed by the stages of the public procurement process European Commission along three axes: has gradually been introduced and • Ensure a well functioning Internal practised in public procurement. Market when public procurement is conducted electronically . The benefits will be the following: Implementing the legal framework • acceleration of execution times of correctly and on time avoiding procedures; barriers to and distortion of • reducing the time of the purchasing competition. process; • Achieve greater efficiency in • reducing the expenses of procurement and improve announcements management governance . Accelerating • simplification of processes, resulting digitization through national plans from a re-engineering of such for e-procurement and developing processes; interoperable tools for e- • the direct and constant monitoring of transactions. public spending by conducting • Work towards an international comparative analysis between the framework for electronic public purchasing of similar products in procurement . The co-ordination of different administrations; international and intra-European • professional growth of employees; public procurement activities is an • the opportunity to spend time out of important function of a member routinely administrative tasks state in order to reach an (automated by new tools) through international framework for activities with higher added value to electronic public procurement. the function-specific purchases (e.g. Every country can contribute to marketing intelligence); international regulatory activities • a major transparency due to the or can participate, either as a uniformity of access to information representative of an institution or without discrimination since the as an individual expert, in tender are online, to the international networks, such as the standardization of procedures to European Public Procurement ensure that processes can be more Network (PPN). We have also We easily controlled by external actors in also have registered co-operation time and according to the quality of with corresponding institutions in services provided in that each supplier other countries like the “Northern will not be discriminated against (e.g. European Subset” (NES), an information asymmetries). initiative from a group of countries

(Denmark, Sweden, Norway, There are also several changes related to Iceland and Finland, with the the rapid developments in the IT sector collaboration of the United having an impact on the public Kingdom) whose aim is to facilitate procurement market, consequently the interoperability and generating a need for all Member States to establishment of a common carefully consider how this challenge platform for eProcurement among should best be met and what kind of its members. Also Consip in Italy in preparations should be made to most 2005 started a interchange effectively adapt the procurement systems program with OGC buying solution to new market conditions. in order to share knowledge in

public procurement experiences. Technological developments produce a

fundamental shift of practices and patterns Journal of e-Government Studies and Best Practices 12

in the manner in which public procurement stages: if on one hand the initial phases of is executed. There is a need to develop the process are all covered in most cases central support functions with (especially the phase of the call for tenders Internet-based guidance systems, the publication), on the other hand the number creation of standardised systems for tender of operating projects decreases as the and contract documentation, the design of further phases of the purchasing process improved and easily accessible are approached (Finland, Greece, Sweden, Internet-based publication and information Ireland). systems, and development of systems for co-ordination and joint co-operation In this outlook, the Italian experience can between contracting entities. Public be considered a successful one. Since 1 July eProcurement implies opportunities and 2007, the use of the Public Administration challenges for European administrations. eMarketplace (MEPA) has become The European Union has fixed ambitious mandatory for all central public objectives by 2010: 100% electronic administrations for the purchase of goods availability and 50% real use for and services valued below the EU procurement procedures above the legal threshold. Through this tool, Public thresholds. Administrations can make their purchases with a direct order (DT) or a request for To support this legal framework there are quotation to suppliers (RFQ), comparing guidelines - most represented by the goods and services features published on Community Action Plan - tools and services electronic catalogues. According to the that help administrations, business and characteristics of the two types of e- consultants to develop compliant systems. Procurement, DT is prompter and more However, there are still specific challenges straightforward than RFQ, which explains for eProcurement in the field of catalogues, why the number of transactions through signatures and standards. These challenges DT supersedes the ones done through RFQ. have to be faced to prevent interoperability Even if RFQ allows the making of requests barriers. By consequence, the Member on suppliers, it will require a greater States of the EU need organizational commitment from both the requesting and structures to carry out public procurement the supplying party, which affects the functions. These tasks range from the element of immediacy. Finally the Italian drafting of relevant legislation and experience outlines the relevance of development of public procurement compulsoriness for the development of e- policies to the training of procurement procurement, as suggested by the evolution officers and publication of contract notices. of the number of transactions passed from Although differing in terms of nearly 6.000 transactions in 2004 to more responsibilities, functions and tasks, these than 21.000 transactions in the first bodies have several features in common. semester of 2008. The evolution status of the various public eProcurement projects in Europe is Further useful research would be a interesting and diversified. The platform comparative study of EU countries that organization is usually managed by have achieved the best target in public e- agencies appointed by central entities: such procurement, to try and identify which agencies manage the relationships with factors are associated with progress and public entities and promote the use of the lack of progress. The findings of such platform. The analysis of all the various research could enable the most effective instruments available on the public targeting of resources in less developed eProcurement portals reveals a strong countries. preference for auctions and calls for tenders rather than catalogues and References electronical markets. In all assessed Ageshin, E.A. (2001) ‘E-procurement at countries there is a project for the Work: A Case Study,’ Production and realization of an eSourcing platform, Inventory Management Journal , vol. 42, 1. although such projects are all at different 13 Journal of e-Government Studies and Best Practices

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Rai, A., Tang, X. (2006) ‘Assimilation Patterns of the Use of Electronic Procurement Innovations: A Cluster Analysis,’ Information And Management 43 (3), 336–349.

Rajkumar, T. M. (2001) ‘E-Procurement: Business and Technical Issues,’ Information Systems Management , (18:4), 52-62.

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