Transparency by design

By Pia Rufino | 10 August 2011 | Permanent link | 0 comments

Governments in Asia are emphasising openness and fairness in building their e-procurement systems.

Procurement plays a central role in delivering all government priorities – from the free drugs and medicines at public hospitals, the public school buildings, desks and chairs, to the guns and ammunition of the military and police etc.

The government spends hundreds of billions to buy the goods and services it needs to operate the bureaucracy, carry out projects and deliver services to its citizens. The activity also plays a very important role in ensuring the health and development of the economy. This was seen during the recent crisis, where government increased spending to boost economy.

My colleague recently had a chat with Jolly Wong, Chief Telecommunications Engineer of Hong Kong Police Force, who manages a 200+ team delivering communications capabilities to more than 33,000 police officers in the territory. He said that the moment government launches a tender, GDP of the country will be affected. Therefore, the effectiveness of the government procurement body greatly affects the whole economy.

This, I find, is an interesting area that academics should be looking into.

“For Malaysia, transparency in public procurement is very important as procurements are directly exposed to mismanagement and abuse of power and this reflects the overall identity and business conditions in the country,” Datuk Shukor Ibrahim, Director of Malaysian E-procurement project under the Ministry of Finance, recently told me.

With electronic procurement system, the government can efficiently streamline public procurement and achieve massive savings. But among the main benefits e-procurement brings is, it enhances transparency in procurement practices and administration, thus promotes healthy competition and dynamics in economy. And transparency should be rooted in e-Procurement systems design. Besides, such an important system inherently needs to be transport in order to be creditworthy.

Malaysia’s e-procurement system, called ePerolehan (eP), is also designed to help the government eradicate the negative perception of public among the public agencies and services in the country.

Certain features are being developed by governments to make procurement activities as much as possible available to the public. One of which is the electronic bidding functionality.

The eBidding has three underlying features namely price transparency, stimulation of greater competition and innovative government procurement procedures.

Price transparency by selection based on the lowest price has avoided the conclusion of overpriced procurement contracts. The real-time bidding features provide a level-playing field for all suppliers thus increasing their participation in government procurement.

The eP system also has an electronic tracking Audit Trail functions to ensure the efficient management of government supplies or enable government agencies and auditors to track the procurement process and transactions.

Malaysia is certainly not alone in using e-Procurement to reducee corruption and increase integrity in public procurement systems. Another good example is the Korea’s Public Procurement Service—Nara Marketplace.

Nara Marketplace is a unified channel of Korea’s public procurement that handles the entire procurement process of registration, bidding, contract and payment online. It is used by more than 40,000 public institutions and 190,000 enterprises.

The Korean government ensure that the system reveals all information on procurement service real time, securing transparency and cutting costs on procurement transactions.

Same goes with the Philippines. I have spoken just couple of days ago with Rosa Cemente, Director of the Philippine Government E-procurement system (PhilGePs) on how the system helps the government promote transparency since its inception in 2000.

PhilGEPS is the single e- portal for registration of suppliers and advertisement of bid opportunities in the country.

The Philippines’ procurement system used to be described as cumbersome and prone to corruption as there were many outdated and inconsistent laws and many agencies dealing with issuance of guidelines and procedures in procurement.

The procurement process across all government agencies, from all branches of government, to local government units and public schools and universities, now involves announcing and advertising all procurement opportunities, inviting qualified parties to bid, evaluation of bids, awarding of contracts, monitoring of delivery and performance and payment. The whole process is recorded and posted electronically for others to see.

Through the use of the PhilGEPS, transparency in government procurement is enhanced since opportunities to trade with government and the ensuing transactions are provided online. Information on changes in terms of references, bid schedules and on the winning bidder and contract amount are all accessible through the system.

In addition, the electronic catalogue, which provides information on pre-approved cost of commonly used items, will help government auditors check that supplies purchased by a government agency are not grossly over-priced.

As of September 2010, the PhilGEPS hosted bid opportunities posted by 11,147 government agencies and accessed by 45,955 goods and services providers. Over 1,080,000 bid notices have been posted by various procuring entities

“If there is transparency (of services) we will be able to increase competition (in the bidding process)which result in getting more quality service and better prices and also it helps the government to implement the law. ”

Like Malaysia, the Philippine government also plans to launch the eBidding feature by the end of the year to enable online submission and opening of government bid projects.

“Information will become transparent not only in the bidders but also in the civil society organisation, the auditors; even the public can see information in the system,” Clemente told me.

A local government in China even went a step further. In addition to having an electronic system, all subsequent meetings with providers are monitored real time by high resolution video surveillance system, making under the table transactions very difficult.

To achieve all these is of course not easy. As Clemente said, compliance from the government side is greatly needed. “If no one is using the system, it will be unsuccessful”.

That is why, the issuance of administrative order of the President which requires all the government agencies in the country to use the PhilGePS in their procurement activities will create a big push for the government to promote transparency.

The World Bank, a development partner, cites that for the past four years, an average of Php121 billion (US$2.8 billion) worth of infrastructure, equipment, materials, supplies, and services pass through government procurement processes each year which accounts for 15 per cent of the country’s annual budget.

“We also hope to level the playing field. It’s not the IT which solves the corruption, we cannot do away with it, we should improve transparency to minimise corruption,” she said, stressing the importance of design to correctly leverage e-procurement systems.