Title : Design of e-Procurement system for Govt. of Chhattisgarh

Description

As part of various IT initiatives, the Government of Chhattisgarh has launched a project to implement a single, unitary, end-to-end e-procurement solution across the State. The project, being implemented in the public-private partnership mode, envisages collaborative procurement of goods, works and services using electronic methods at every stage for securing multiple benefits, particularly efficiency and transparency, to all stakeholders.

Client Name : Government of Chhattisgarh

Client Type : State Government

Project Description

The government chose to implement the project as the State's annual public procurement expenditure, currently about Rs. 4000 crores, is estimated to increase significantly in the years ahead due to rapid developmental efforts. The idea is to consolidate the gains of e-tendering, which the government introduced in 2004 to bring about transparency and efficiency in public procurement, and implement a complete e-procurement solution across all State agencies.

Under the project, the government's procurement activities will be channeled through the e-procurement infrastructure in a phased manner. The efficiency of government organizations in handling public procurement will be enhanced through automation and process reengineering.

The e-procurement system is expected to help the government maintain a clear picture of its procurement activities on a real-time basis. Transparency in public procurement will be enhanced, with suppliers and contractors having equal and fair access to opportunities advertised online.

The government has enjoined the private partners to provide a packaged, customized and time-bound e-procurement solution. Initially, the service provider will be responsible for maintaining the system on an on-going basis and for administering the use of the system.The government has reserved the option to take the role of a system administrator at a later stage in the PPP.

The private partners will train end-users on the e-procurement system, provide IT and networking infrastructure required for training, and prepare user / administrator manuals as well as e-learning material. The government has required the private partners to develop, maintain and update electronic catalogues. They are also responsible for building and maintaining the data centre, back-up and a disaster recovery mechanism.

The government and the private partners will jointly finalize and implement the roll-out plan.Under the project, a help desk will function from 0900 hours to 2100 hours on all days of the week with staff competent to answer queries.

Project Genesis

A key issue facing government projects is time and cost overruns that are attributed to delays in the procurement activity. Procurement activity takes approximately three to five months or even longer.The existing system is negatively impacted by heavy paper work, multilevel scrutiny, and allegations of cartel formation by contractors.

Due to lack of information at certain levels, the government is not in a position to leverage its buying power while negotiating prices for various goods and services. Therefore, sometimes government agencies end up paying different prices for the same items without any valid reason.

Manual processing of paper-based tenders is time-consuming.The government has to incur substantial expenditure for putting out the tender notice in newspapers. Despite efforts to prevent the formation of cartels, the bidding process is at times marred by interested parties clandestinely joining hands.The government's existing database on goods, services, works and contractors is sketchy, disorganized or unwieldy, preventing quick decision-making.

In the absence of an effective Management Information System, the government is unable to correctly estimate its procurement expenditure. The time spent on procurement-related activities also remains unclear.

The Chhattisgarh infotech and biotech Promotion Society (CHiPS), a registered society promoted by the government and  headed by the Chief Minister of the State, is the driver of the e-procurement project.

Vision

The vision of the e-procurement project is: "To enhance the efficiency and transparency in public procurement through the implementation of a comprehensive e-procurement solution to be used by all government organizations in the State, including the public sector undertakings."

Mission

The government wants to implement the e-procurement system in a phased manner across all offices in the State by the year 2011. The government will consult stakeholders while implementing the project, which will be piloted initially in four departments.

Government process reengineering will ensure compatibility with e-centric operations. Suppliers and government employees will be trained for engaging in e-procurement. The ICT infrastructure in government departments will be strengthened to suit e-procurement.

Objectives

The project objectives include:

  • Maximizing transparency by making available online vital information related to procurement
  • Ensuring wider and stiffer competition among contractors and suppliers
  • Saving in costs of publicity to procurement plans
  • Striking a good bargain through demand aggregation and leveraging of buying power
  • Reducing inventory costs by optimizing stock levels
  • Ensuring that all departments procure every item of goods and services at best prices consistently
  • Developing a pool of reliable contractors and enabling prequalified vendors to access other government departments
  • Streamlining procurement steps to enable efficient and effective processes
  • Reducing business costs to government and suppliers through better understanding of supply chains and procurement life cycle costs
  • Ensuring better prices for government through an improved tender process linked to e-auction
  • Providing suppliers a level playing field and a fair platform to compete

Stakeholders for the project

The stakeholders of the e-procurement project are:

  • Departments and corporations of the Government of Chhattisgarh
  • The political and administrative set-up in the Government of Chhattisgarh
  • Suppliers and contractors from across India and the globe who participate in the government's procurement activities
  • Residents of the State of Chhattisgarh & Citizens of India

Benefits provided by the project

The e-procurement system is designed to take the procurement process to the next level through appropriate use of ICT. The services provided under the project include:

  • Improved efficiency through reduced cycle time for processing tenders
  • Saving in costs and time, as there is no need to publish tender notice in newspapers
  • Since bidders participate with anonymity, there is no scope for cartel formation
  • Those who want to tender can participate freely and fearlessly in a fair environment
  • Transparency in the process of tendering
  • Improvement in work culture in all the participating departments
  • Build-up of valuable database on goods, services, works and contractors
  • Economies of scale due to aggregation of requirements
  • Improved access to procurement information and analytical reports

In other words, administrators, politicians, suppliers and citizens will reap the benefits of transparency, efficiency, cost savings, monitoring & control, transactional effectiveness and improved accessibility.

  • At the government level, the unitary e-procurement system is expected to result in
  • Enhanced monitoring, leading to timely completion of projects
  • Timely procurements & supplies
  • Better procurement planning

Implementation detail

The government has required the private partners to provide e-procurement as a service. That is, they need to provide an entire suite of e-procurement services to the departments and agencies of the government. This entails establishing infrastructure, deploying an e-procurement solution that is in sync with government requirements and maintaining the entire system. The government will pay a service charge for building this e-procurement facility.

The e-procurement model goes beyond the existing e-tendering process. It includes:

  • Centralized registration of suppliers / contractors
  • Indent management
  • e-Tendering
  • e-Auction
  • Contract management
  • Catalogue management
  • e-Payments
  • Accounting
  • Management Information System

The government proposes to implement e-procurement in a phased manner across departments in the State. The private partners will help implement key modules such as e-tendering, e-auction, indent management, contract management, catalogue management and e-payments initially on a pilot basis in a few select locations. Once the private players' capabilities are established, the system will be gradually rolled out across offices in the government.

Under the project, the pilot phase was scheduled to last six months and the roll-out was expected to take five years. At the end of the five-year period, the government will review the situation and decide on outright purchase of the system. Meanwhile, the private partners are expected to:

  • Implement e-procurement solution as per the government's requirements
  • Deploy the system proactively across the State in an expeditious manner
  • Work with the government in building the ecology required for expeditious implementation of the project
  • Continuously improve offerings and the quality of service
  • Work in a consultative manner by taking into account the viewpoints of various stakeholders
  • Help increase the uptake of e-procurement
  • Procure and deploy 200 computers in select government offices within two years

The Government involved Wipro and Next Tender as partners in the e-procurement implementation effort. The private parties are expected to exhibit service orientation and make sincere efforts in ensuring that the quality of service provided is appreciated by all stakeholders.

As part of the project development effort, the government constituted an Empowered Committee, which takes critical decisions concerning the project. In December 2005, a team of procurement experts attended a training program on e-procurement held in Hyderabad.

Current Status

The project has been implemented in five pilot departments viz. Public Works Department, Water Resources Department, Public Health Engineering Department, Health Department and Chhattisgarh State Industrial Development Corporation. The system would be subsequently rolled out to all the departments statewide in a span of 3-5 years.

The Project was inaugurated by the Hon'ble Chief Minister on 14th August 2007.

Published On : 11th July, 2013