Malaysian govt e-procurement achieves massive savings

Datuk Ibrahim Shukor, director of
e-Procurement Division
under the Malaysian Ministry of Treasury

The government expects an estimated savings of RM1.4 billion (US$ 470 million) or up to 10 per cent of the target annual procurement deals through Malaysian e-procurement system—e-Perolehan(eP)—this year, Datuk Ibrahim Shukor, eP project director under the Ministry of Finance (MOF) told FutureGov Asia Pacific Magazine.

According to Shukor, the eP has reached RM11.04 billion (US$3.7 billion) in the value of transactions last year, an improvement of over the original target of RM10 billion and has generated RM1.1 billion (US$ 370 million) savings.

“These savings were derived from the reduction in price of goods, processing costs and better inventory management, ” Shukor said.

This year, the government is aiming to hit RM14 billion (US$4.7 billion) procurement deals.

Positive annual growth trend, he added, is brought by several notable factors such as the MOF circular requirement for all ministries to carry out at least 70 per cent out of their respective annual procurement budget to be transacted via eP.

The order has made all 2,553 procurement offices nationwide to be eP-enabled.

“There is also a strong sense of ownership of the eP in all Ministries wherein total of 21 out of 25 ministries have exceeded their usage performances as compared last year,” Shukor noted.

The eP has expedited the ICT adoption process and accelerated all government procurement offices nationwide to be ICT infrastructure and eCommerce ready.

“The adoption rate from suppliers has also been positive, from merely 70,000 registered suppliers in year 2000 to approximately 185,000 this year,“ he added.

The eP also enables the government to provide a convenient and low entry cost for SME’s to conduct business. With the supplier registration module, the number of the registered supplier has increased from 30,000 to 185,000 this year.

“As one of the pioneers in the government electronic procurement scene, eP has become a benchmark for local and international organisations and governments,” Shukor said.

futuregov.asia