PRESENTATION
ON
E-PROCUREMENT
BY Mrs. ARCHANA TALWAR SR. AO.,
MR. ARUN KR. CHAUDHARY SR. AO. &
MR. RAVINDER KUMAR SR.AO.
A three day training programme on
e-Procurement conducted by the
Administrative Staff College of India,
Hyderabad from 30-6-14 to 2-07-14
was attended by the officers from
HVPNL namely Mrs. Archana Talwar,
Sr. AO/Budget,
Mr. Arun Kr
Chaudhary, Sr.AO/Vigilance and Mr.
Ravinder Kumar Sr.AO/Tariff.
Assumptions of A S C I about
participants
• Participants are Managers engaged in materials
function or are IT managers entrusted with EProcurement implementation.
• Procurements in the participants’ organizations are
handled through manual or computerized systems.
• As Procurement Managers they have multiple
responsibilities
-Formulating and implementing procurement plans
-Floating tenders, receiving offers, negotiations
-Vendor development
-Managing a team of professionals, employees as
well as from outsourcing vendors
What is E-PROCUREMENT
• E-procurement
(Supplier Exchange) is
purchase and sale of supplies and services
between business to business or business to
consumer or business to government through
the Internet.
• The e-procurement value chain consists of
indent
management,
e-tendering,
eAuctioning, vendor management, Purchase
order integration, order status, ship notice, einvoicing,
e-payment
and
contract
Why e-Procurement
Before eGP
3
Situation before eProcurement
TIP OF THE ICEBERG
Tender scam busted in MCD office
Tribune News Service
New Delhi, August 19
The Crime Branch of the Delhi Police today claimed to have
unearthed a tender mafia racket in the Municipal Corporation of
Delhi with the arrest of eight contractors and an employee of the
corporation.
Issues in Manual Mode of Procurement
•
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Lack of standardization
Discrimination
Inadequate transparency
Physical platform facilitates cartels - suppresses competition
including physical threats to bidders during filing of bids.
Pressures on dept. officials
Inordinate delays in tender finalization
Human interface – Manipulations, tampering, Subjective
evaluation
Adverse Press coverage on Tender fracas
A comparison
• Manual Tendering is expensive whereas e-tendering has fixed costs
and is economical
• Manual Procurement has restricted monitoring whereas eProcurement is anytime anywhere.
• In manual tendering no work on holidays and after office hours
whereas in e-procurement bidding is possible on holidays and after
office hours.
• Manual procurement prone to human errors whereas eProcurement is automated and accurate.
• In Manual procurement contents are not shareable whereas in eprocurement contents are shareable.
• In Manual procurement wastage of space to store whereas in eprocurement lifelong storage in softcopy.
• In manual procurement record is difficult to retrieve whereas in eprocurement it is one click access.
Benefits of eProcurement
• No bidding after due date and time. Contractors are not
permitted to submit electronic bids after stipulated date
and time of tender opening.
• Bids can not be opened before due date and time.
• Bids can only be opened by Authorized officials.
• Reduces purchasing cost and improves efficiency
• Standardized purchasing processes across the organization
• Reduces administrative costs with better effectiveness
• Single Stop Shop
• Increases price transparency
• Increases internal efficiency
• Best value for money
• Paper consumption is less and environment friendly.
Some more benefits
• Confidentiality, integrity and authenticity of all transactions
and data
• Enhanced citizen confidence.
• Efficient procurement process and lower procurement cycle
time.
• Optimized inventory levels
• Value-for-money
• Enhanced decision-making capabilities through MIS.
• Greater participation and competition among suppliers.
• Use of digital signatures for E-Transections.
• Use of Public Key Infrastructure (PKI) for data
encryption/Decryption.
BENEFITS TO THE ORGANIZATION
•
•
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Completely automated process
Shortens Procurement cycle.
Economical and Environment friendly
Greater Transparency.
Work culture improvement in the Organization.
System aided Evaluation process
Minimize storage space
Organizational growth by change in perception
Ensure highest level of security.
BENEFITS TO THE ORGANIZATION
• The information regarding purchase order or
acceptance letter and other post contract
correspondence etc. is conveyed to the concerned
contractors through e-mail.
• The e-Procurement system is governed by digital
security features as provided under Indian IT Act 2000.
• No vendor can interact with the e-Procurement portal
unless they possess a legally valid digital certificate
from a licensed certifying authority.
• Public
Key
Infrastructure
(PKI)
for
data
encryption/Decryption.
• Time stamp by certifying Agency.
BENEFITS TO
SUPPLIERS/CONTRACTORS
• Anytime and anywhere bidding. Contractors can participate
and submit online offers in e-Tenders directly from the
website.
• Fair, Free, Fearless and Transparent participation for
vendors.
• No dependence on Newspapers, Couriers, banks etc. all
tender notices are published on organization/Govt. website
from where tender documents can be downloaded by the
contractors directly.
• No administrative hassles.
• All activities can be carried out from any computer. The
offers are submitted electronically with Digital signatures.
BENEFITS TO
SUPPLIERS/CONTRACTORS
• Economical due to saving on Travelling cost.
• Reduces efforts & cost of bidding.
• No tenders can be missed because of distance
and multiple tenders at different places.
• Can submit bid on last minute.
• The tenderers can see the tabulation statement
of all offers after opening of advertised tenders
and also the status of their tenders.
• The security money can be deposited
electronically.
Key e-Procurement areas
•
•
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e‐Tendering,
e‐Auction or Reverse Auction,
e‐Catalogue/Purchasing,
e-Market Place
WHAT IS E-TENDERING
• E-Tendering is a process of carrying out entire
Tendering Cycle Online, including submission
of Price Bid to harness Efficiency, Economy
and Speed of Internet.
• In other words, the E-tendering process
means transformation from a traditional
Tendering System to an online process making
huge advances in Efficiency, Transparency,
Data Storage and Retrieval Systems.
E-Auctions are of two types –
e-RA -- Reverse Auctions
this is used for the Buying/Purchasing
process
e-FA -- Forward Auctions
this is used for the Selling/Marketing
process.
A variation of this process is used for the Buying
process where there are discounts to be incremented
so that the rate contract can be entered into at the
maximum discount on the list price of the
manufacturer.
General Requirements of eProcurement System
• Addresses the Requirement Of GFR:
For public procurement of goods, services, works compliance with GFR
rules, processes, roles are mandatory requirements and system shall be
designed as per workflow with adequate security measures.
• Confidentiality and Integrity Information:
As the platform transacts confidential procurement data and is exposed to
several security threats, it requires employing combination of security
technologies and security best practices.
• Addresses CVC Guidelines:
Should meet guidelines issued from time to time by CVC.
• System Adaptability and Customization:
Should have templates to adapt bidding methodologies.
Software packages for E-Procurement
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Ariba ( now acquired by SAP)
Emptoris
Oracle
Perfect Commerce
My SAP SRM
SAS SRM
Vertical Net
Current Scenario of e-Procurement in States
State
Status
Tendering
Andhra Pradesh
Well established
Yes
Karnataka
Well established
Yes
Gujarat
Well established
Yes
Rajasthan
Established and growing
Yes
Odisha
Established and growing
Yes
Chhattisgarh
Established and growing
Yes
Puducherry
Somewhat established
Yes
Maharashtra
Somewhat established
Yes
Punjab
Established and growing
Yes
Bihar
Somewhat established
Yes
Uttar Pradesh
Somewhat established
Yes
Madhya Pradesh
Somewhat established
Yes
PSU
E-GP module
indicative List of PSUs implementing e-GP systems
Bharat Petroleum Corporation limited
(BPCL)
e-Auctions, e-Tendering
Bharat Heavy Electricals Limited (BHEL)
e-Auctions, e-Tendering
Coal India Limited (CIL)
e-Auctions
Delhi Transport Corporation (DTC)
e-Auctions, e-Tendering
Gas Authority Of India Limited (GAIL)
e-Auctions, e-Tendering
Gujarat State Fuel Management Company e-Auctions
(GSFMC)
Hindustan Aeronautics Ltd (HAL)
e-Tendering
Hindustan Latex Limited (HLL)
e-Tendering
Hindustan Petroleum Corporation Limited
(HPCL)
e-Auctions, e-Tendering
Hindustan Shipyard Limited (HSL)
e-Auctions, e-Tendering
PSU
E-GP module
Indicative List of PSUs implementing e-GP systems
HSCC (India) Limited
e-Tendering
Indian Oil Corporation Limited (IOCL)
e-Auctions, e-Tendering
National Mineral Development
Corporation
e-Tendering
National Thermal Power Corporation
Limited
e-Tendering
Oil And Natural Gas Corporation (ONGC)
e-Auctions, e-Tendering
State Bank of India (SBI)
e-Auctions
Singareni Collieries Company Limited
e-Auctions, e-Tendering
(SCCL)
E-Tendering module includes Vendor registration and Indent management modules
Steel Authority of India Limited (SAIL)
e-Auctions, e-Tendering
Risk of e-Procurement Systems
i.
Security
-Compromise through potential
weaknesses in the system
ii. Availability
-The need for services to be `on’ all the
time
iii. Authentication
- Masquerading identity or repudiation of
message
iv. Access
-To ensure users only have access to the
functions required to do their jobs
v. Audit Trail
-Recording of who did what and when at
various key stages of the purchasing process
vi. Liability
-Through employment or legal contractual
obligations
vii. Survival:
E-procurement service is rapidly growing multiple
standards. Both suppliers and buyers are uncertain of which
service provider will survive or become obsolete.
Computer Fraud
Internal abuse and misuse
Breach by external party
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External attack by various parties whether
corporate espionage or terrorists
Virus affecting the system
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Email viruses such as NIMDA which have capability
of crippling systems
Denial of service
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Flooding a computer’s internet connection with
requests to disrupt traffic flow
Intellectual property
Misappropriation or release of intellectual property
Remedial measures
• We should remember that it’s important to make sure that the
procurement solution we are using is efficient, can support the
entire supplier network and is easy to use for both us and our
suppliers. Keeping these things in mind when choosing or
evaluating a procurement solution can be an important step on
our path to reaching more savings in our procurement.
• Before the implementation of e-procurement, the organization
must first clearly define the business problems its eprocurement solution is intended to address. Furthermore,
before an e-procurement solution can be deployed, the
department must undergo thorough procurement process
reengineering
• Department should encourage using new e-procurement
technologies through intensive training and educational
sessions with end-users.
• e-procurement needs to be integrated into the heart of a
Department’s IT infrastructure. This would also solve the
problem of directing a lot of resources for the planning
and execution of e-procurement implementation.
BY SMT. ARCHANA TALWAR SR.AO, MR. ARUN KR. CHAUDHARY, SR.AO & MR. RAVINDER KUMAR SR.AO.