Ajay Sawhney, former Secretary IT&C

& K.Bikshapathi, former Project Manager

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

Thank you