Welcometo

Presentation on

e-GP: Govt of AP Experience

K.Bikshapathi, Project Manager

Information Technology & Communications Dept Government of Andhra Pradesh

Agenda for PresentationeProcurementSituation before eProcurementSituation after eProcurementImpactChallengesLearningsCritical Success Factors

e-Procurement :The GovernmentGovernment – Probably the “single largest buyer”e-Procurement, “a killer opportunity”, of E-GovernmentImportant Value Drivers

Potential savings – aggregated demandProcess efficiencyInstitutional complianceInstitutional MemoryTransparency

What is eProcurement

Doing procurement activities electronically over Internet with vendors/ suppliers.

RequestRequest SourceSource ReceiveReceive PayPay

eProcurementeProcurement

eTenderseForward/Reverse auctionseRate contractseCatalogues

eprocurement – A Global practice

North Carolina

Virginia

Florida

District of Columbia

California

Governments are aiming to manage 100% of their procurement electronically to cut lead times by 50-60% and cost savings 10-25%

Brazil Governement

UK

3

TIP OF THE ICEBERGTender scam busted in MCD office

Tribune News Service New Delhi, August 19The Crime Branch of the Delhi Police today claimed to have unearthed a tender mafia racket in the Municipal Corporation of Delhi with the arrest of eight contractors and an employee of the corporation.

Situation before eProcurement

Situation before eProcurement

Discrimination in issue of tender schedulesCartel formation - suppresses competition Physical threats to biddersManual movement of tender files – Cause of delayHuman interface – Manipulations, tampering or loss of recordsLack of adequate transparency Adverse Press coverage on Tender fracas

GoAP eProcurement Calender

Cabinet sub committee recommended eProcurement in 2000eProcurement identified as a core eGovernance in 2001 - project with relevance across the governmentFirst among governments to implement eProcurementAppointment of consultants in 2001Pilot launched in January 2003Scale up in July 2004

eProcurement Roll out

12 Govt DepartmentsIrrigation, Roads&Buildings, Panchayat Raj Engg, Public Health Engg, Animal Husbandry, Horticulture,Tribal Welfare,Fire Dept, Education

18 Public sector UnitsAPTS, AP Police Housing, APSRTC, APHMHIDC, APSTC,HUDA, HMWS&SB, APGenco, Singareni Collieries,APHB, APSHC, APSIDC,AP Beverages,APIIC, APCSCL, APTransco,AP Tourism

62 Municipalities4 Universities , IEG, TTDTurn over

2003-04: Rs.1,982 Cr (564 Nos)2004-05: Rs 15,600 Cr(2215 Nos)2005-06: Rs 15,808 Cr (9981Nos)2006-07: Rs 3722 Cr ( 5496 Nos)

18256 Tenders

Rs37112 CroresOr

US$8 Billions

eProcurement Roll out trendYear No of

DeptsValueTransacted in US$

No of transactions

% of eProcurement out of total govt spend

2003-04 8 447 564 20%

2004-05 7 Depts9 PSUs17 ULBs

3522 3746 85%

2005-06 8 Depts13 PSUs51 ULBs5 Univ

3740 9981 90%

Range of procurementsHardware, software, Office automationDrugs, Medical equipment, FurnitureVeterinary drugs, PesticidesPaper, Office stationaryCow ghee, Sugar, gingelley oilElectricity Sub-stations, Transmission equipmentAuto spares, Transformers, PumpsWorks contractsEPC - Turnkey contracts

Situation After eProcurement

A Supplier submitting Bids from Internet Kiosk

Department officials opening tenders in Computer

Contractors seeing the bids on Plasma screen connected to computer

Tender opening projected on Plasma screens

IMPACT

ImpactTransparency brought improved imageContractors cartels dismantledCost savings

Rs 2400 Cr on account of competitive bidsAdvertisement costs in Print media reduced

Bidder Participation increased by 25%Reduction in transaction time

120 days to 35 daysEmpowerment of biddersMIS for decision supporting system

Cost savings- AnalysisCase 1:COT

Year No. of tenders ECV(Cr) TCV (Cr) %2001-02 188 755.29 735.57 (-)2.652002-03 125 558.36 510.07 (-) 8.652003-04 160 1101.69 884.21 (-) 19.742004-05 94 755.56 667.09 (-) 12.02

Type No. of tenders

ECV (Cr) TCV (Cr) %

eProcurement(2003-04) 107 733.55 549.93 (-)25Conventional(2003-04) 53 368.14 334.78 (-) 9eProcurement(2004-05) 90 725.52 638.29 (-)12.02%

Conventional(2004-05) 5 30.04 28.80 (-) 4.12%

Comparison between two systems

COT derived Additional savings due to eProcurement

Estimated/ Tender Contract Value

Cost savings- in Municipalitiessource- MA&UD Department

Type No. of ULBs

No of Procureme

nts

ECV (Cr) %

eProcurement for State Govt funded schemes

52 383 60.33 (-)10.31

Conventional for World Bank Schemes

35 173 29.33 (+) 7.4

Comparison of two systems in 2005-06 (up to Oct’05)

Effective cost savings due to eProcurement is 17.71%

Economy in Advertising !

Awards 2006: Topped the independent assessment study conducted by MIT, GOI- Score 83.72006: A case study hosted in World Bank website2005: Recognised as best practice by GOI, All GOI, States asked to migrate by 4/20072005: Best egov project in country by PCQUEST for creating Social Impact2003: Golden Icon award by GOI

Awards

Golden Icon Award-2003 from Ministry of Administrative Reforms, GOI

Best IT Implementation-2005 for Maximum Social Impact from PCQuest

http://www.worldbank.org/egov

Ministry of Information Technology, GoI

www.mit.gov.in/SA/index.asp

39 Summary Assessment Projects Details

E-PROCUREMENT

Implementations in IndiaS.No State / Department Level of eprocurement Service Provider URL

1 Andhra Pradesh Indent - Award of Contract C1 India Pvt Ltd www.eprocurement.gov.in2 Punjab, DoIT Indent - Award of Contract C1 India Pvt Ltd https://punjab.govtprocurement.com/3 Gujrat Tender publishing - Award (n) Code Solutions of

GNFCwww.nprocure.com

4 Karnataka Tender publishing - Award / Auctions Wipro / Antres www.tenderwizard.com5 Assam Tender publishing - Award Wipro / Nextenders http://pwd.as.nextenders.co.in6 Chattisgarh Tender publishing - Award Wipro / Nextenders http://pwd.cg.nextenders.co.in7 Rajasthan Tender publishing - Award Tender City-eNucleus

8 DGSND Indent - Award of Contract C1 India Pvt Ltd http://dgsnd.govtprocurement.com/9 Northern Railways Tender publishing - Award Broadvision/HCl www.nreps.com

10 South Central Railways Tender - Contract Management C1 India Pvt Ltd www.etendering.scrailway.gov.in11 Hindustan Shipyard Ltd Indent - Award of Contract C1 India Pvt Ltd12 Neyvelli Lignite Corpn Tender publishing - Award Tender City 13 NTPC, Mumbai Tender publishing - Award Nex Tenders http://www.ntpctender.com14 Municipal Corpn of Delhi Tender publishing - Award Wipro / Nextenders www.mcdetenders.com15 Kerala State Civil Supplies corpn ltd Pilot phase Antares Systems www.pilottenderwizard.com16 ASRTU, Delhi Tender publishing - Award Antares Systems www.tenderwizard.com/asrtu17 NIC, Delhi Tender publishing - Award C1 India Pvt Ltd

Implementation

Challenges

Challenges in Implementation

Sustainable Business ModelChange ManagementSecurity & Authentication issues

Setting up an eProcurement Exchange is not mere Technology but a Major Reform

PPP Business Model

No Capital cost to the GovernmentState of the art technology High quality resourcesLow RiskCombining accountability with efficiencyServices are governed by SLAs

Role of Private Partner/ Service Provider

Implementation of the E-Procurement functionality across all departmentsCustomizing softwareSetup and management of hardware and software for the PortalTrainingsHelpdesk servicesOperation & Maintenance

GOAP e-Procurement Architecture Diagram

Change Management

E- Govt Procurement is not an off the shelf softwareImplementation involves cultural change, attitudes, perceptions, ProcessesIt is not mere IT but more of Reform

Change Management

Steering committee chaired by the Chief Secretary- Inter Departmental coordinationCapacity Building in DeptsInvolvement of stake holders right from conceptual stageTrainings to suppliersPost implementation support- Help DeskSecurity & authentication

Security & AuthenticationSecured Hosting facilityWeb security

SSL technologyFirewalls, Anti Virus, IDS

Two factor authenticationPasswordDigital Certificates: IT Act 2000

Bid encryption at data base- Asymmetric public key Cryptographic method.Audit trail of each activityGood backup policySecurity audit by independent third partyTime stamping.Access control systems

Business Process Reengineering

BPR- StandardisationCut down non-value processesRedesign bid formsStandardisation of processes

Sub-committee Secretary(Projects)Universal item codesAuto Bid EvaluationContractors DatabaseEstimations modules

Standardisation reduces customisation- facilitates quick scale up

Online MIS

Learnings

Reforms/ BPR in Procurement processes and eProcurement to synchronise to derive full potential of eProcurementStatewide eProcurement portal beneficialSuppliers adaptability to change is betterStakeholders are demanding for complete automation- Auto Bid EvaluationDesirable to Develop a Monolithic platform with all modules, but implement incrementallyHoD support is criticalPPP Model useful for rapid Scale up

Critical Success Factors

Top Political leadership supportHigh level Project Implementation CommitteeRight policies, ObjectivesSignificant Process Re-engineeringActive involvement of StakeholdersWorkshops/trainingsPublic Private Partnership ModelCIOs from domain are project leadersActive Helpdesk

Thank You

For more detailsVisit

www.eprocurement.gov.in

Project manager, eProcurement , IT&C Department,217, A- Block, Secretariat,

Hyderabad, Andhra Pradesh.Phone 040-23451055, mobile 98490 93397

Email: pmeprocurement@ap.gov.in

Question & Answers