e-Government Procurement Handbook - Asian Development …

1 e-Government Procurement HandbookElectronic 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.

2 About the Asian Development BankADB s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their people. Despitethe region s many successes, it remains home to two-thirds of the world s poor: billion people who live on less than $2 a day, with 828 million struggling on less than $ a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional 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 Development Bank6 ADB Avenue, Mandaluyong City1550 Metro Manila, Printed on recycled paperPrinted in the PhilippinesISBN 978-92-9254-322-8 e-GovernmentProcurement Handbooke-Government Procurement HandbookPrinted on recycled paper 2013 Asian Development BankAll rights reserved.

3 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 DataAsian Development Bank. e-Government Procurement City, Philippines: Asian Development Bank, Government purchasing. 2. e-Government . I. Asian Development 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 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 encourages printing or copying information exclusively for personal and noncommercial use with proper acknowledgment of ADB.

4 Users are restricted from reselling, redistributing, or creating derivative works for commercial purposes without the express, written consent of :In this publication, $ refers to US CreditsCover: Jingwen Lu, Lei Kan6 ADB Avenue, Mandaluyong City1550 Metro Manila, PhilippinesTel +63 2 632 4444 Fax +63 2 636 orders, please contact: public Information CenterFax +63 2 636 OF TABLES, FIGURES, AND BOXES viiiPREFACE ixACKNOWLEDGMENTS xABBREvIATIONS xiINTRODUCTION 11 THE CASE FOR e-Government Procurement Definition of e-Government Procurement e-Government Procurement Systems Plotted on Timescale Importance of public Procurement and Government Procurement e-Government Procurement Objectives Key Measurable Benefits of e-Government Procurement Common e-Government Procurement Misconceptions e-Government Procurement and Procurement Reform Challenges of e-Government Procurement 192 POLICY, LEGAL.

5 AND REGULATORY FRAMEWORK Policy Centralization versus Decentralization Leadership Institutional Roles Procurement Processes and Practices e-Government Procurement Operational Policies Legal and Regulatory Framework Signatures and Authentication public -Key Infrastructure 303 STRATEGIC CONSIDERATIONS FOR GOvERNMENT IMPLEMENTERS Transition from Manual Procurement Process Choice of e-Government Procurement Business Model Single System or Multiple Systems Software Selection and Implementation Considerations 39 iv Factors to Consider When Selecting a System Contracting Considerations Scalability Flexibility and Customization Data Considerations Special Requirements The Implementation History of the Provider 444 CHANGE MANAGEMENT AND CAPACITY Development Operational Requirements Outsourcing e- Procurement Functionality Independent Software Providers International Cloud-Based e- Procurement of the Future Country Experiences India Indonesia The Republic of Korea The Philippines 525 READINESS ASSESSMENT Risk Assessment Risk Assessment Methodology Strategic and Architectural Alignments Costs and Values Interpretation Using the Comparison Chart Responses to Exceptions Using the Standardized Indicator Detailed Analysis 596 IMPLEMENTATION IN GOvERNMENT Developing an

6 e-Government Procurement Reform Strategy Leadership and Institutional Structures The Project Management Unit A Reengineering Opportunity Change Management Engaging Stakeholders Retain Control of the Project Backup and Security Planning A Phased Approach and Piloting A Pilot Project 69 Contents v Functional Specifications Technical Specifications and Infrastructure Interoperability Considerations Security Policy System Availability Issues Terms of Use Liabilities Bid Securities Risk Management Availability and System Recovery Contractual Risk Monitoring and Evaluation Examples of e-Government Procurement Implementations State Government of Karnataka (India) Zanzibar by the United Kingdom xchangewales by Wales ProcServe in the United Kingdom 797 e-Government Procurement FUNCTIONALITIES Spend Analysis Acquisition Quadrant Leverage Quadrant Strategic Quadrant Technical Quadrant Discussion e-Government Procurement Functionalities Procurement Portal (Web Portal)

7 Procurement Management Information System Standardization of Tender Documents and Interactive Bid Forms 988 e-Government Procurement TECHNICAL REQUIREMENTS AND SPECIFICATIONS Security Encryption of Bids Security Governance Authentication public -Key Infrastructure Authorization 107vi Confidentiality Integrity Non-Repudiation User Security and Administration User Identification and Password Digital Signature Certificates User Profile and Authorization Management Server Certificate Storage Time-Stamping Reporting, Logging, and Monitoring Search Engine Technical Interoperability Application Interfaces and Technical Standards Application Graphical User Interface Graphical User Interface Interoperability Multilingual Requirements Usability Online Help Risk Management Reliability Scalability and Availability Performance Assessment Hardware 1189 e-Government Procurement FROM A SUPPLIER POINT OF vIEW Electronic public Procurement Strategy and Tactics for New Suppliers Develop a Sales Strategy Research and Agency Contact Pre-Contact Preparation Basic Information Technology Capabilities Internet access Software and Websites Contracting and Payment

8 Tools Getting Registered e-Tendering Open e-Tendering Restricted e-Tendering e-Purchasing 125 Contents vii Participating in e-Auctions Post-Submission Activities Getting Information, Training, and Technical Help with e-Government Procurement Online Training Courses and Road Shows Supplier Input Case Studies Supplier Training in the Philippines Supplier e- Procurement Training in the State of Karnataka 12810 REFERENCES 129viiiTABLES1 Key Measurable Benefits of e-Government Procurement 162 Readiness Assessment Values 543 Risk Values 554 Impact Values 555 Architectural Alignment Values 566 Strategic Alignment Values 577 Examples of the Standardized Indicator 598 Traffic Light Display 60 FIGURES1 e-Government Procurement Systems Plotted on a Timescale 92 Government Procurement Processes 253 Assessment Comparative Chart 584 e-Government Procurement Reform Strategy 615

9 e-Government Procurement Road Map: Phases and Stages 646 Explanation of the Four Quadrants 827 e-Government Procurement Applications 828 Classification versus Identification of Items 919 Information Registry and Procurement Management Information System 9510 Authentication for e-Government Procurement 105 BOXES1 Definition of e-Government Procurement 72 Key Policy and Regulatory Decisions 203 Change Management Considerations 334 Leadership 625 System Integration 806 Technical Considerations 1007 Bringing Suppliers on Board 119 Tables, Figures, and BoxesixPrefacePublic Procurement plays a central role in Development and comprises a substantial share of the national economy in nearly every country.

10 Electronic government Procurement , commonly known as e-GP, breaks down the physical barriers of space and time, allowing for more transparent public Procurement work accompanied by wider access to information and markets. e-GP provides opportunities to introduce innovative measures using information and communication technology (ICT) to streamline public Procurement for greater efficiency and economy. It also helps to improve governance and reduce corruption, particularly when it is integrated with other functional areas of government such as budget, tax, and audit. The Asian Development Bank (ADB) is a founding member of the Multilateral Development Bank (MDB) Working Group on e-GP.