Streamlining Procurement

Therefore,
implementing e-procurement with C1 India has several advantages, which includes
reduced tender time, improving the government image and also provides a level
playing field and fair platform for vendors to compete on.

With an aim to streamline the procurement process, the
Directorate General of Supplies and Disposal (DGS&D) has engaged itself
towards implementing e-procurement with the help of C1 India. DGS&D is a
Central Government body entrusted with entering into rate contracts with vendors
on behalf of Central Government departments.

Moving to online procurement has cut down on paperwork and
administrative costs. Moreover, with the e-procurement engine in place, buyers
can do more work themselves, while budgets are tracked automatically and updated
instantly.

In the past, some vendors have been reluctant to go online.
Small focused companies often don't have the resources or wherewithal to deal
with electronic ordering. With the new system however, a supplier can do that
easily, thanks to a small and medium-size enterprise portal.

Most importantly, the system has put the much needed
transparency in the whole process of procurement in the government sector.
“All other Government institutions in the country are authorized to place
their supply order with selected vendors at the established DGS&D rates.
This e-procurement engine is helping them towards automating their complete
tendering process. This is certainly aimed at bringing a lot of transparency to
the overall system,” explains Vivek Agarwal, President and COO, C1 India.

At the basic level, e-procurement means being able to
perform the full procurement process electronically on the Internet. That
includes identifying buying requirements and requisition processing, soliciting
and receiving bids of all sorts, negotiating and establishing contracts and
processing overall purchases.

Bird's eye view of e-procurement

From a financial management perspective, e-procurement really means the
electronic automation of associated financial management processes to support
practical procurement functions. Asset management is key along with accounting
and analysis processes and core business management systems. And one certainly
cannot forget about financial accountability and auditing systems. All of these
functions must be compatible and interactive.

The public sector has a reputation of being a worthy but
dull marketplace, dogged by strict purchasing procedures that are at times
complex and rigid. Moreover, contracts have been tainted by the 'value for
money' mantra, and usually interpreted as 'invite lots of tenders, than buy
the cheapest'.

In public sector procurement, not only do you deal with
business complexities but with the financial administration act, trade
agreements, contracting policies procurement, government contract regulations
and the obligation to be open, fair and transparent.

“E-procurement is doable and there is a reward. When we
succeed, that entire context will be in place, but in the background. The
complexity will be transparent. The user will be able to procure electronically
with full confidence, within the legislation framework and still point, click,
order and receive,” he explains.

C1 India'S solution

When C1 offered a solution to DGS&D it suggested the setting up of an
e-tendering platform for all 15 directorates with features including PKI, two
factor secure authentication, digital certificates and asymmetric key
encryption. A call center and a help desk would be established to record and
address all issues of participants and also to train vendors. A Security Audit
by a leading Government Agency (STQC) would ensure that the processes are
followed thoroughly.

As a result of implementing this project, there would be a
drastic reduction in the processing time vis-a-vis the same when it was
processed through the traditional tendering process. There would also be a
significant annual saving for suppliers.

Additionally, small and medium suppliers would be empowered
to submit their bids. There would be a reduction in the subjectivity during
tender evaluation. An instant management information system would be available
on all the tenders. Lastly, there would be an elimination of paper and
paperwork. This solution has received the award for Exemplary Leadership and ICT
Achievement of the year 2004-05 by the

Government of India.

DGS&D Directorates in India reflects the wide variety
of products and services, which can be procured using the e-Procurement
solution. They include paper and products, automobile, IT services, mechanical
engineering, workshop machine and tools, oil and chemical, hardware, structural,
wool and leather, electrical store, steel and cement and textiles.

This site can be accessed at https://dgsnd.govtprocurement.com

The AP experience

The same e-procurement engine has done wonders for the government of Andhra
Pradesh. The state is well known for its commitment to technology. Its capital
city Hyderabad (with a population of about 7 million)) serves as a major center
for global IT players.

“Andhra Pradesh is one of the largest states in India
with a total population of 80 million and it spends in excess of $4 billion (Rs
18,000 crore) annually on Government procurements. The state government needed
to replace its paper-based system for handling bid requests to cut procurement
time and to increase competition by making it easier for vendors to
participate,” Vivek added.

This project was awarded best-implemented e-Governance
project 2003-04, by Government of India. The objective of this initiative was to
leverage the buying power through demand aggregation and significantly reduce
cost and time of doing business, for both the government and industry.

The highlights of the project are that it is used by over
62 Government departments including public sector undertakings, universities,
municipal corporations and municipalities. A total of 9,500 tenders, amounting
to over $7.6 billion (Rs 35,000 crore) have been processed with this facility.

Around 200 Government users and 5,000 suppliers are
currently using the platform. A single procurement transaction ranges from
$1,000 (Rs 45,000) to $620 million (Rs 2,800 crore), which shows how successful
it has been in terms of making paperwork redundant and boosting transparency.

The principal benefit of this initiative has been the
savings that the Government of Andhra Pradesh enjoyed. This amounted to savings
at $57 million in 2003-04 and $225 million in 2004-05. The savings in 2005-06 is
expected to stand at $500 million or Rs 2,200 crore.

The lead-time for the tendering process has shortened from
120 to 36 days. This has improved the Government image and has eliminated
cartels and syndicates that were otherwise operating in this spectrum.

There is a greater transparency in the process and bidders
are now empowered to place their bids without going through several channels.
The average number of suppliers per tender has increased by over 50%.

Procurement transactions have crossed $7.6 billion (Rs
35,000 crore) in two years making it the largest business portal in India.

This site can be accessed at http://www.eprocurement.gov.in

ZIA ASKARI

(ziaa@cybermedia.co.in)