E-PROCUREMENT IN THE GOVT SECTOR: BLESSING OR CURSE?

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After the introduction of the first electronic computer in Sri Lanka at the State Engineering Corporation in 1967 and the Internet E-mail service, learn mail by the university of around 1990 and has developed and achieved in the information technology (IT) has significantly changed quality of the lifestyle of many Sri Lankans.

The Government of Sri Lanka has introduced many initiatives focusing on progressive development of the information and communication technology (ICT) sector in Sri Lanka. ICT utilisation is still confined to personal users in various sectors,such as in the Government sector, which is a visible resistance and evolving information technology for their routine works daily.

It has been observed that the Sri Lankan Government Information and Communication Technology Agency (ICTA) which formulated in support of Government initiatives, clearly indicated the commitment of the Government in implementing information and communication technology policy aiming at more effective and citizen-centred and well transparent manner through ICT enabled governance which is commonly known as e-Governance. The electronic Government Procurement (e-GP) is part of e-Governance. The implementing body of the e-procurement in Sri Lanka is e-GP Secretariat of Ministry of Finance, Economic Stabilisation and National Policies.

As per the directive and circulars issued by the Public Finance Department of the line ministry, e-GP process is closely monitored at the line ministry level. All Government agencies had been directed to implement an e-policy in all areas pertaining to such agencies aiming at higher efficiency, accuracy, speed,and transparency.

At present, 225 Government organisations have registered in the e-GP portal of Government of Sri Lanka. e-procurement for the foreign procurement of the Government sector is yet to be initiated and is being processed.

As per the Procurement Guidelines-2006 published by the National Procurement Agency,Procurement entities are only permitted e-Advertising and all other functions of e-procurement such as e-Publication, e-Submission, e-Opening, e-Evaluation and e-Award are not allowed. However, Cabinet approval for e-procurement development and implementation in 2017 supersedes this restriction and the two circulars (05/2018 and 08/2019) which have been issued by the Public Finance Department authorising the e-GP implementation in Sri Lanka.

Implementation of e-procurement in the Government sector is of paramount importance. Up to now, e-process could not be fully utilised in the true spirit, only some features of it can be used effectively as the e-GP development is still underway.

The former Implementing Agency for the Procurement Guidelines which is‘ National Procurement Agency’ is not active at present due to various reasons.

Even though most of the Government institutions are implementing e-GP, the Public Procurement knowledge of their staff is not adequate.

What is e-procurement?

Electronic procurement, simply defined as e-procurement or supplier exchange, is the process of requisitioning, ordering, and purchasing goods and service online. Unlike e-commerce, e-procurement utilises a supplier’s closed system and is only available to registered users.

E-PROCUREMENT PROCESS

In these various stages, many have arrived in different organisations/institutions, it depends on the type of items to be purchased, value of the item, technical specialties, critically of item, and security aspect are looked into.

Above, Flow Chart 1 illustrates a typical purchasing process used in many enterprises/companies. The system can be used only for registered users and procurement entities.

According to empirical evidence and best on experience had guideline involving Government e-procurement by using ICT in the public sector, there are two main broader categories of causes that could be highlighted in this regard. Human and organisational factors.

HUMAN FACTORS

– Lack of knowledge and incompetency in computer literacy

– Fear of losing job

– Fear of losing the grip (bureaucracy)

– Resistance to change

– Less ability for manufacturing or funds

– Easy monitoring by supervisors

ORAGANISATIONAL FACTORS

– Not allocating required provisions, existing rules and regulations

– Organisational culture and environment

– Lack of infrastructure facilities

– Fear of data security

Requirements to establish an effective e-procurement system

To establish an e-GP system, there are the factory requirements:

– Legal framework

– End-user training

– System integration

– Security and access control

– Suppliers’ adoption

– Business process reengineering and updating

– A commitment of high demand

– Security and access control mechanisms

ADVANTAGES OF IMPLEMENTING E-PROCUREMENT

Cost saving in the tender process

Procurement-related expenses can be reduced due to application electronic procurement method. Such as paper advertisement cost, postal cost, stationery cost, staff expenses, etc., in countries such as India, Korea, Brazil. They have reduced 50 per cent from the total transaction cost by adopting this process.

Time saving

All transaction data being transferred. We point to another electronic calmly.

Improved responsiveness to customer’s demand

Procurement lead time can be reduced and reduction of time involvement in tender process will be improved and quick responses to the requirements of the customers.

Transparency and visibility

Transparency of users in the system through access control and to reduce misappropriation of funds at different levels. Introductions are open to all without minding details on transaction within authorised limits.

Improved communication

Two-way communication between buyer and seller is of paramount importance in every procurement method. An effective communication throughout two processes will minimise the communication gap.

Updating market intelligence and improved decision-making

Exchanging two-way communication between two parties, it will enable to collect the market intelligence about the procurement of required items to the procurement entity and further it will allow decision-makers to take reliable procurement decisions at the correct time.

Procurement dashboard

Organisation can utilise procurement dashboard e-GP module to collect market information.

Efficiency

Internal efficiency refers to ensuring that the financial, time, and human resource investments in a procurement process ultimately result in high quality service delivery and value for money. It helps governments to drive best procurement practices and systems while reducing the resources needed, such as money or personals’ time.

Examples from other countries on benefits of e-GP

– Reducing prices of medicine in Chile.

– Savings in price of medicine in Ukraine-Decrease in prices by 40 per cent, and increase in the number of patients treated.

Bottlenecks in implementing

e-GP system in Government sector

– Regulatory and legal aspects must be completed, and e-GP Guidelines should be issued.

– Internet security must be established, and e-GP can be a prime target of online hackers.

– ICT infrastructure should be in place properly in Government and private sector including in rural areas.

– It may be difficult to have internal and external integration.

– Software issues.

– Too much Government regulations will break the continuous process from time to time.

CONCLUSION

Annually, the Sri Lankan Government spends a huge amount of public money through its various Government agencies aimed at efficient and effective public service. Yet, it is difficult to achieve the expected level of transparency and accountability through manual procurement processes.

Most of the time, delays in procurement processes and malpractices which waste public funds are common issues. Implementing transparent, efficient, and economic reforms in public procurement is a timely need. In this backdrop, e-GP could be a very good solution. e-GP will save billions in public funds.

Government policymakers must introduce radical reforms to existing rules and regulations. Apart from that, an ideological change throughout the Government organisations as well as proper infrastructure facilities are essential requirements for success. Only such initiatives would help to eradicate corruption. If all Government organisations could embrace e-GP, it would be a blessing for the public.   

References

– Government Procurement Guidelines-2006-Government of Sri Lanka.

– Information and Communication Technology Agency of Sri Lanka(2014),one gov 2020(available online).

– Logistics journal published by Sri Lanka.

– e-GP guidelines and circulars issued by the Ministry of Finance.

http/scm.nesu.edu.

http/local.Technology.com

About the author

JEEWANANDA WIJESUNDARA.  MBA (LM) KDU-(SL), BSc(Busi.Ad)Special(Hon)Sri (J) – (SL),

LLMC – (SL), SSAC – (BANG), CMILT – (UK), MISMM – (SL), MIM – (SL).

LIEUTENANT COMMANDER (RTD).

GENERAL MANAGER.

PARANTHN CHEMICALS COMPANY LIMITED.

[email protected]

By Jeewananda Wijesundara