E Procurement

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270    e-Governance: Case Studies

Chapter 22

Implementation of e-procurement in the Government of Andhra Pradesh: A Case Study K Bikshapathi Project Manager, eProcurement and P Raghuveer IFS Addl. Secretary (e-gov) Information Technology & Communications Department Government of Andhra Pradesh, Hyderabad

AbstrAct
Procurement is generally regarded as a sensitive function in the public sector and is rarely transparent . It is for this reason that public procurement is one of the areas in governance that remains insulated against any process improvements. Governments the world-over are under constant pressure to meet the expectations of the citizens and to do more with the less resources that are available to them. There is a growing realisation in governments that usage of information and communication technology (ICT) can remove the existing administrative barriers and make the government’s procurements more efficient, accessible and transparent, besides being cost-effective. E-procurement implementation is an attractive quick-win solution for governments, since it results in cost cutting, introduces different sourcing practices, and delivers other quantifiable benefits. However, there is little history of extensive use of e-procurement in the public sector in India. The present case study highlights the successful implementation of a state-wide e-procurement platform across several government departments, public sector units, urban local bodies in the state of Andhra Pradesh and the quantifiable benefits it has delivered to the suppliers and the government directly, and to the society, indirectly. This path-breaking initiative has provided transparency, fairness and equal opportunity to private entrepreneurs who are now able to submit bids online on an anywhere and anytime basis for government contracts and sell products or expertise to government agencies through the e-procurement portal.

Introduction / Background
The traditional systems of procurement in government departments through manual modes suffered from various problems such as inordinate delays (approximately 4 to 6 months) in tender/order processing, heavy paper work, multi-level scrutiny that consumes a lot of time, physical threats

Implementation of e-procurement . . .    271

to bidders, cartel formation by the contractors to suppress competition, human interface at every stage, inadequate transparency, discretionary treatment in the entire tender process, etc. Though it is known to the departments that their traditional processes are inefficient, hardly any effort was taken to improve the system for obvious reasons . The Andhra Pradesh government had felt a need for wide-ranging reforms in the public procurement process in order to achieve simplification of procedures, greater transparency, better quality of work, fair competition etc. The cabinet sub-committee set up for this purpose has recommended eprocurement, a web-based government-to-business IT project in September 2001 as a solution for all these problems. The plan was to effectively implement and sustain public sector reforms and to bring in new channels like auctions and reverse auctions online for greater efficiency. It was envisaged to revolutionise the manner in which procurements are done in government. The government departments would be conducting their end-to-end procurement related transactions, right from invitation of tenders to issue of supply order remotely in a new environment facilitated by the emerging internet technology. The initiative was taken up in an innovative Public Private Partnership model and the private partner was selected in July 2002 through a competitive tendering process. A pilot project was launched in January 2003 and the operations were rolled out to all departments of the state government in July 2004.

Core Functionalities of e-procurement Marketplace
Extensive studies were conducted to document the procurement practices across several...
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