e-Procurement Reference Guide
e-Procurement (e-GP), which is procurement of goods, works and services through internet-based information technologies is emerging worldwide with the potential to drive procurement reform, increase competition and promote integrity in public procurement. When properly designed, it can drastically reduce costs, facilitate information accessibility and reduce opportunities for corruption.
This e-Procurement Reference Guide was created for the governments that are trying to embark on e-Procurement implementationagenda. This on-line resource is a compilation of the most useful publicly available on-line materials that cover various issues of e-Procurement implementation
Contents
Overview of e-Procurement Reference Guide
I. THE SCOPE OF THIS E-PROCUREMENT REFERENCE GUIDE
II. WHO IS IT FOR
III. THE MATERIALS USED IN THIS E-PROCUREMENT REFERENCE GUIDE
IV. HOW THIS E-PROCUREMENT REFERENCE GUIDE WORKS
V. OVERVIEW OF EACH SECTION
e-Procurement as a Tool for Promoting Transparency, Competition and Efficiency
I. THE ROLE OF E-PROCUREMENT IN PROMOTING TRANSPARENCY, COMPETITION AND EFFICIENCY
II. BENEFITS FROM E-PROCUREMENT INTRODUCTION
III. CHALLENGES OF E-PROCUREMENT IMPLEMENTATION
Leadership, Change Management and Communications Strategy
I. THE IMPORTANCE OF LEADERSHIP
II. THE NEED FOR CHANGE MANAGEMENT
III. DESIGNING A COMMUNICATIONS STRATEGY: A NEW COMMUNICATION CHALLENGE
Planning for e-Procurement Implementation
I. THE RECOMMENDED STEPS
II. DEVELOPMENT OF E-GP IMPLEMENTATION STRATEGY
III. THE NEED TO PLAN FOR BUYER AND SUPPLIER ACTIVATION
IV. THE CHANGING NATURE OF E-PROCUREMENT
Estimating Costs of e-Procurement implementation
I. COSTING METHODOLOGIES
II. EXAMPLES OF COST REDUCTIONS
Business Models for e-Procurement Implementation
I. MAIN TYPES OF BUSINESS MODELS USED
II. EXAMPLES OF DIFFERENT BUSINESS MODELS
Legislation, Regulation and Policy
I. PUBLIC PROCUREMENT LAWS OVERVIEW
II. LEGAL TREATEMENT OF ELECTRONIC AUTHENTICATION AND E-SIGNATURES
III. CHANGES IN DIGITAL SIGNATURES REQUIREMENTS
IV.THE EU POLICY AND LEGISLATIVE FRAMEWORK FOR ELECTRONIC PUBLIC PROCUREMENT
V.REGULATORY FRAMEWORK EXAMPLES FROM COUNTRIES
Functional and Non-Functional Requirements
I. FUNCTIONAL REQUIREMENTS FOR IMPLEMENTATION PHASES AS DEFINED BY MDB
II. NON-FUNCTIONAL REQUIREMENTS
III. OVERVIEW OF FUNCTIONAL REQUIREMENTS UNDER THE EU FRAMEWORK
Technologies and Applications
I. E-PROCUREMENT APPLICATIONS AND SYSTEMS: A QUICK OVERVIEW
II. THE RESULTS OF E-GP RESEARCH BY MDB'S WORKING GROUP
III. TECHNOLOGY PLATFORMS
IV. ENTERPRISE ARCHITECTURE
V. RISK MANAGEMENT AND ANALYSIS
VI. SECURITY ISSUES
VII. OVERVIEW OF AUTHENTICATION TECHNIQUES
VIII. DIGITAL SIGNATURES, PKI AND CERTIFICATION SERVICE PROVIDERS
Standards
I. OVERVIEW OF STANDARDS
II. E-CATALOGUES STANDARDS
III. COMMON PROCUREMENT VOCABULARY (CPV)
IV.UNSPSC GOODS AND SERVICES PRODUCT CODE
V. E-BUSINESS STANDARTIZATION BODIES
EU's e-Procurement Initiatives
I. OVERVIEW
II. E-PROCUREMENT PROCEDURES AS PER THE EU PROCUREMENT RULES AND REGULATIONS
III. THE E-PROCUREMENT ON-LINE FORUM: SHARING AND LEARNING FROM OTHERS
IV. PEPPOL: A PAN-EUROPEAN PILOT AIMED TO FACILITATE THE EU-WIDE INTEROPERABLE PUBLIC E-PROCUREMENT
V. THE NEW CHALLENGES POSED BY THE TRANSITION TO E-PROCUREMENT
Overview of e-Procurement Efforts in Various Countries
I. REGIONAL OVERVIEW OF E-PROCUREMENT
II. COUNTRY SPECIFIC OVERVIEW OF E-PROCUREMENT
III. ADAPTING KONEPS SYSTEM TO OTHER COUNTRIES
Lessons Learned
Training Resources Available through the World Bank Group
I. OVERVIEW OF TRAINING FOCUS AREAS
II. THE WORLD BANK INSTITUTE: DISTANCE LEARNING TRAINING RESOURCES
III. THE E-DEVELOPMENT THEMATIC GROUP:DISTANCE LEARNING TRAINING RESOURCES
IV. ICT TOOLKIT DEVELOPED BY THE WORLD BANK
Overview of e-Procurement Reference Guide
I. THE SCOPE OF THIS E-PROCUREMENT REFERENCE GUIDE
This on-line e-Procurement Reference Guide attempts to summarize and reference the materials in the area of e-Procurement that are publicly available on-line. The Guide offers a mechanism to easily search and access the information on a particular e-Procurement subject in 15 areas.
II. WHO IS IT FOR
The principal audience is the practitioners in the developing countries who are either embarking or already implementing e-Procurement solutions in their countries. The audience may also include some who have little background in e-Procurement and who need to be better informed. A secondary audience is the staff members working in the project implementation units [and borrowers / beneficiaries] to provide them with a primer on good practice in order that they might better prepare for and monitor e-Procurement components.
III. THE MATERIALS USED IN THIS E-PROCUREMENT REFERENCE GUIDE
The reference materials used in this Guide include the research materials developed by the Multilateral Development Banks’ (MDB’s) working group on e-Procurement as well as their e-Procurement assessment methodology. It also refers to the numerous documents that describe the experience of e-Procurement development in the European Union countries, documents developed by the PEPPOL and the e-Procurement Community of Practice members under EU ePractice.eu. The e-Procurement Reference Guide also references to numerous training materials developed as part of the distance learning series on e-Procurement organized by the World Bank institute in 2009 and 2010. Additionally, it links to country specific presentations made at various e-Procurement conferences around the world. These country presentations should not be viewed as a suggestion to follow the same path of or consider being the best practice.
IV. HOW THIS E-PROCUREMENT REFERENCE GUIDE WORKS
Each of the 15 sections presents an overview of a particular subject matter and is aimed to outline the summary of the main issues. The main text provides links to the reference materials that were selected to provide more information and insights. The reader is taken to a particular portion of the document that either presents a chart, table or more details on a subject.
V. OVERVIEW OF EACH SECTION
1. Overview of the e-Procurement Reference Guide
This section provides an overview as well as a one paragraph description of each section.
2. E-Procurement as a Tool for Promoting Transparency, Competition and Efficiency
This section describes the role of e-procurement in promoting transparency, competition and efficiency. It also talks about the benefits and challenges of e-procurement introduction.
3. Leadership, Change Management and Communications Strategy
This section talks about the importance of leadership as one of the key components for the successful e-procurement implementation. It also presents practical steps and recommendations for development of an effective Communications Strategy that is based on the principle that e-procurement are a part of the broader procurement reform agenda.
4. Planning for e-Procurement Implementation
This section is based on the materials developed by the MDB’s working group. It presents the recommended sequence and steps for the e-procurement implementation, including 1) Preparation/Readiness Assessment; 2) e-Tendering; 3) e-Comprehensive Contract Management; 4) e-Purchasing. This section also describes critical success factors that are generally found in any successful e-GP strategy and highlights the importance of having a plan to create a marketplace by activating the Buyers and Suppliers.
5. Estimating the costs of e-Procurement Implementation
This section presents a methodology that can be applied in order to cost e-procurement solutions. It also provides links to the detailed costing tables that can be used as a basis for costing exercise. This section also provides links to the power point presentations made by the countries that demonstrate the cost savings from e-procurement implementation.
6. Business Models for e-Procurement implementation
This section provides information about the main business models used to implement e-procurement systems. The models vary from complete in-house solutions to various types of third-party partnerships. It is not intended to recommend one model vs. other but to present an overview of what others have done.
7. Legislation, Regulations and Policy
This section provides an overview of the legal and regulatory issues that pertain to e-procurement. The section’s primarily focus is the issues of legal treatment of electronic authentication and e-signatures in the European context.
8. Functional and Non-Functional Requirements
This sub-section is designed to provide the responsible decision makers on what functions or qualities they could seek from the eGP system that is either developed by an agency or purchased as a solution or implemented through a third party provider. This section describes specifications of the desirable systems that are defined in terms of functional requirements and the systems qualities are defined in terms of non-functional requirements.
9. Technologies and Applications
This section presents an overview of the e-procurement applications and systems, technology platforms, digital signatures and authentication techniques, the underlying security issues and technical specifications. It is followed by risk management analysis and concludes with the presentation of findings from the survey of e-procurement systems done by the MDBs in jurisdictions of Asia/Oceania, South America and Europe.
10. Standards
This section provides an overview of Standards as it pertains to e-procurement, including the standards for e-catalogues and Common Procurement Vocabulary. It also includes a list of business standardization bodies.
11. EU’s e-Procurement Initiatives in Europe
The countries of European Union have implemented numerous projects and initiatives in Europe in the area of eProcurement. This section attempts to summarize these initiatives that tackle different subjects, issues or aspects of modernizing public procurement and are targeted at speeding up the uptake of e-procurement, promotion of interoperability and cross-border cooperation. The text provides links to guiding documents, summaries and major studies undertaken in the last few years that are found to be useful for any practitioner. It also provides the explanation for the contract types in accordance with the EU rules and regulations including for Individual contracts (open procedure and restricted procedure), repetitive contracts (dynamic purchasing systems, and framework agreements) and extensions (electronic auctions).
12. Overview of e-Procurement Efforts in Various Countries
This section presents the selected case studies from various countries. Where available, the case study presents the information about the location (country and city), responsible government agency, implementation period, current status of the case study, business model used, number of staff members working on this project, technology choice, funding sources and implementation costs as well as description of the main results, benefits and impacts and lessons learned.
13. Industry Solutions
This section points the user to the e-procurement vendors, their proposed e-procurement solutions and the costs. In addition, it describes the available demonstrators which is a special tool developed in open source that could serve as a prototype interface of the actual e-procurement system.
14. Lessons Learned
This section documents a number of lessons learned from e-procurement implementation around the world. These are not intended to be comprehensive but indicative of what other practitioners found of a value and shared.
15. Training Resources Available Through the World Bank Group
This section describes the training provided by the World Bank Institute and the World Bank’s e-thematic group in the area of e-procurement. It also provides links to the ICT toolkit that is intended to be a practical guide for the task managers in preparing for and supervising the implementation of ICT projects and components.
e-Procurement as a Tool for Promoting Transparency, Competition and Efficiency
I. THE ROLE OF E-PROCUREMENT IN PROMOTING TRANSPARENCY, COMPETITION AND EFFICIENCY
e-Procurement, which is procurement of goods, works and services through internet-based information technologies is emerging worldwide with the potential to reform processes, promote competition, promote integrity in public procurement, enhance transparency and accountability. It is also believed to be a driver of procurement reform. The European Commission refers to it as “high impact e-service” ( that is highly desirable.
It is important to understand that e-Procurement is not simply the application of a new technology to existing processes, but a reform process in itself that requires in many instances, that traditional processes be modified or abolished - that management processes, protocols and procedures be standardized, reformatted and often simplified, all of which are conducive to greater transparency. e-Procurement also requires new training both of the procurement officials and business stakeholders, and even a public awareness programme to develop civil oversight.
When properly designed, e-Procurement can drastically reduce the cost of information while at the same time it can facilitate the information accessibility. The strength of e-Procurement in the anti-corruption agenda arises from this capacity to greatly reduce the cost and increase the accessibility of information without having to go through human channels.
Well-designed and implemented e-Procurement methodologies and applications can strengthen oversight and reduce opportunities for the improper exercise of discretion. Thus, e-Procurement is emerging as a tool for promoting transparency, competition, efficiency and a mechanism to reduce corruption.This research( recently published in the Journal for International Policy Solutions presents how implementation of Brazil’s e-Procurement system COMPRASNET created a relatively successful system for battling corruption.Additionally, mandating the use of electronic auctions under Brazil’s COMPRASNET resulted in a substantialincrease of SMEs participation ( starting from R$ 108.4million on 2004, and go to R$464.4 million in 2005 and R$ 822 million in 2006.
Objectives of efficiency, transparency, enhanced policy-making capacity and greater competition are the major driving forces for e-Procurement. e-procurement can also be a catalyst for the accelerated take-up of new technologies into the economy generally.
A presentation on this subject was made by Jose Edgardo Campos on March 24th 2010 as part distance learning series, ( Another useful presentation describing ChileCompra’s agenda for reforming the state and reducing corruption opportunities is presentedhere ( It was delivered by José Miguel de la Cuadra, Head of Public Procurement Division of ChileCompra, Ministry of Finance in Washington, in April 2010.
II. BENEFITS FROM E-PROCUREMENT INTRODUCTION
MDB’s e-Procurement working group identified significant potential outcomes from the introduction of e-Procurement capabilities and applications. While there has yet to be a definitive study to quantify the impact of technology on procurement corruption, research made by the MDBs has revealed some supporting information.
Specifically, the study by the Curtin University of Technology, sponsored by the MDBs, has reported the experiences from 14 countries from Europe, Asia-Oceania and South America. The comments from respondent countries have been provided in terms of the providers of the procurement services and systems (Providers) as well as for the buyers and suppliers that use the services and systems (Users).
Reported benefits of e-Procurement from this sample are listed in thisTable 3 ( This Table, summarizing the benefits of using the system, demonstrates that the providers of e-Procurement services ranked greater transparency as its most significant benefit while users (suppliers) also gave this a high ranking. Both providers and users also identified greater competition as a significant outcome which also has a counter-corruption influence. As expected both groups were also able to cite various forms of efficiency gains, which in turn also promote competition. This study has further reported a significant reduction in supplier complaints since the introduction of e-procurement.
Other effects of e-Procurement that also enhance transparency are that it acts as a catalyst for the standardization of documentation, tendering templates, tendering rules, policies and procedures and enhances supplier and civil access to the oversight of procurement processes. These effects are evident in the responses listed in thisTable 4 ( which summarizes the ability of the e-Procurement systems to support the integrity and transparency processes.
Similarly,Table 5 ( which presents a summary of the technology driven reform, suggests that e-Procurement is in fact a catalyst for significant reform of traditional procurement. This is encouraging, given the fact that there has sometimes been a tendency for authorities to regard e-Procurement as simply a technical matter.
Chapter 3 on The potential of new technologies to prevent bribery in procurement ( from “Fighting bribery fighting bribery in public procurement in Asia-Pacific”, prepared by as part of the ADB/OECD Anti-Corruption Initiative for Asia and the Pacific Report by Paul Schapper of Curtin University of Technology, talks about the potential of teh new technologies to prevent bribery in procurement - electronic media have the potential to contribute to reducing bribery risks in public procurement.
While more studies are needed, these results seem to support the proposition that e-Procurement can be a significant influence in the reform of procurement and in the anti-corruption agenda.
III. CHALLENGES OF E-PROCUREMENT IMPLEMENTATION
Implementation of e-Procurement can present significant challenges. Some of the stumbling blocks identified during the eGP Research undertaken by the MDB working group in 2007 include the following:
- Lack of leadership
- Lack of Strategy or systematic planning
- Adopting the idea of the ‘big bang’ solution
- Inadequate expertise applied to the task or lack of existing expertise
- Reinventing the wheel
- A focus on technology over process management
- Vendor-driven e-GP solutions
- Consultants that seek to modify government to match the technology
- Absence or insufficiency of policies, regulations and procedures
- Unsustainable business case
An overview of opportunities and challenges can also be found inthis presentationby Sanjay Pradhan ( Vice President, World Bank Institute, which he made at the e-Procurement knowledge sharing event that took place in December 2008.
Leadership, Change Management and Communications Strategy
I. THE IMPORTANCE OF LEADERSHIP
An essential element for successful e-Procurement implementation is government leadership, which will deliver the sponsorship, endorsement and authority for the vital ingredients of:
- A vision and objectives for e-Procurement
- Lead agency role definition and coordination
- Procurement management reform and implementation
- Stakeholder activation and commitment (government, business, community)
- Resource support (funding & expertise) for implementation and sustainability of e-Procurement
The effective operational translation of this leadership is crucial and the government will need to nominate a lead agency to implement its policy and manage the risks. A suitable agency may already exist (State Procurement Agency, for example, may be the most appropriate). Lead agency endorsement identifies an authority to lead and manage the development and operation of the transformations required for government e-Procurement.