Public e-procurement involves the use of electronic communications and transactions by government institutions and public sector to tendering services or public works. Beyond the simple transition from systems based on paper to those which use electronic communications, public e-procurement can provide significant improvements in the effectiveness of individual markets and the overall functioning of the markets. In 2009 over 150,000 contracts were awarded in this way throughout the EU, with an estimated value of around 3% of the EU GDP.
On 18 October 2010 the European Commission launched a consultation on electronic procurement in the public sector. In the now standard form of the Green Paper, consultation will seek to gather the views of stakeholders on how the EU can help Member States to accelerate and facilitate the procedures for issuing public tenders.
Their gradual introduction is part of an ambitious e-government program aimed at transforming the delivery and performance of public administration. The European Commission's digital agenda foresees the approval of the White Paper, which outlines the steps to be taken by the Commission for the creation of interconnected infrastructure of public e-procurement.
Public procurement consists of eight phases: publication of notices, access to tender documents, submission of bids, evaluation, contracting, ordering, invoicing and payment. Some stages, such as the invitation, submission and evaluation stages, require bespoke solutions. The submission, evaluation and order stages are the most complex, requiring a common set of protocols and standards in order to organise the exchange of complex documents and the interaction between public purchasers and suppliers.
For some aspects of public procurement, manual processing is still necessary. For example, some stages of complex contracts such as projects or tasks can be difficult to reduce to standard formats and may require human intervention. However, there are possibilities for a large part of the procurement activities to be transferred to an electronic database. The experience of South Korea, where more than 90% of total government procurement is achieved by the use of a centrally managed platform, shows what can be accomplished.
What does public e-procurement offer?
According to the European Commission, the expanding use of public e-procurement will present advantages such as increased accessibility and transparency, because with the automation and centralisation of information flow on individual tender opportunities, public e-procurement can improve firms' access to public tenders. In addition, benefits are expected from the reduction of administrative costs and streamlining of procurement procedures. Further, there is the possibility of consolidation of public procurement markets in the EU, as the barriers of distance and information gaps reduce and broader participation is encouraged, increasing the number of potential suppliers, and possibly expanding the markets.
All these benefits contribute to achieving the desired results by creating better conditions for taxpayers and by saving costs in public expenditure management.
Facilitating cross-border participation
Public e-procurement systems should be as widely accessible as possible. This means that technical, legal and administrative requirements for participation in procurement procedures should be fair, proportional and not create unjustified barriers to the participation of economic operators from other Member States. In this area, action at EU level could help to clarify the access conditions to be met by the systems and procedures for public e-procurement and to facilitate mutual recognition of electronic identification, evidence and other conditions, so that operators have the same opportunities to participate.
Major success has been achieved through the establishment of a common infrastructure at EU level with the implementation of TED (Tenders Electronic Daily), which helped spread the use of electronic communication in the European Union.
In general, it is clear that while progress has been made in the introduction and use of electronic contracts, the overall goal of unrestricted cross-border operation has not yet been achieved. Given the complexity of changes required and the inherent challenges in moving towards the adoption of electronic systems, these goals were always likely to take some time to realize.
The EU's role in the promotion of public e-procurement
In 2005, EU ministers expressed the hope that by 2010 at least 50% of public procurement, which exceeds the target for EU procurement, would be carried out electronically. However, the Commission's assessment shows that in the leading Member States, less than 5% of the total budgets for contracts are realized through electronic systems.
Alongside its strategic study the EU has identified the main obstacles and risks in different national approaches to cross-border participation in electronic public procurement and has set out the options to confront these challenges.
Many public services have created portals for the publication of notices providing access to documents for tendering. However, the real objective is to automate the whole contract process, from opening until payment.
Successful e-government platforms have been established in many regions and Member States and, given that the technological capacity exists, the Commission considers that it should focus its efforts on supporting the introduction of public e-procurement to national, regional and local administrations.
Most of the required investments in public e-procurement need to be undertaken at national or regional level, since there are identified needs and resources. The EU will focus on creating a broader legislative and operational framework and will play a coordinating role in efforts to harmonize EU methods, at the same time ensuring consistency with the anticipated developments in other related fields, such as legislation for e-signature or e-billing.
The interest of national ministries and contracting authorities, through the submission of their proposals to the Commission, will create the conditions for exploiting the potential of ICT to improve public procurement in Europe. The process is to be completed during 2011.
Moreover, it presents the opportunity to adapt procedures to ensure that key components of the infrastructure of public e-procurement support cross-border involvement. While cross-border participation in public e-procurement is not widespread, it is prudent to undertake concrete actions for harmonization in order to establish a regular operational cross-border system.
Public e-procurement in Cyprus
Cyprus has a fully functional e-procurement platform and an attached subsystem for electronic catalogs and online ordering since 2009. The implementation of the application is linked directly to a web application, providing electronic procedures for the conduct of public procurement tendering in Cyprus.
Under Laws 11 and 12(I) of 2006, on the coordination of the procurement process and procurement procedures and Regulations 149/2009 and 150/2009 governing the conduct of contract procurement and use of electronic media, Cyprus regulated and organized procurement, at governmental, national and regional level.
The Public Procurement Directorate of the Treasury of the Republic of Cyprus is responsible for managing the system. In 2009 this Directorate received the Best Practice Award in the fourth European e-Government Awards.
Services for the contracting authorities include provision of an online collaborative environment to organize activities related to public procurement, providing the tools for managing electronic tendering and emphasizing, among other things, the possibility of electronic preparation and delivery of procurement notices in the Official Journal of the European Union (OJEU).
Services for operators include tools for automated and secure electronic preparation and submission of applications and bids in tendering for public procurement. There is an electronic catalog (e-Catalog) which is a standard application offered to public officials and economic operators, consisting of the electronic catalog and online ordering, essential to the buying process. According to a study commissioned by DG Information, Cyprus achieves the total of 58% for the availability of reference, compared with a European average of 56%.
Dual publication of notices of public procurement at national level and in the OJEU is mandatory in order to create the same opportunities for access in accordance with the general principles of European competition. It is necessary, of course, to obtain better transparency and training in the use of public e-procurement from all economic factors. This will create conditions for wide use of the application not only nationally but also at a cross-border level.
(HG.org)
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