Unified e-Procurement Platform of the State Govt. of Karnataka

1. Unified e-Procurement Platform of the State Govt. of Karnataka

2. Presentation Overview • Rationale for unified end-to-end e-Procurement platform • Project Development • Project Objectives • Business model • Architecture • Functional • Technology • Institutional • Roll-out status • Process Reforms • Implementation experiences • Perceived impact • Key challenges • Learning’s

3. Rationale

4. Rationale for Unified End-to-End System Unified: A single system meant to be used as a shared infrastructure by all agencies in the State End-to-End: Entire procurement process from estimate/ indent preparation, tendering, contract / catalogue management until e-Payment will be handled

5. Rationale for Unified End-to-End System Rationale • An effective mechanism to enforce procurement policy decisions consistently across all government agencies in the State • Worth the heavy investments • Establishment of PMU • Investments in audit by 3rd party audit agency • Selection of principal bank • Establishment of training centers • Robustness of hardware and software to ensure high Quality of Service (QoS)

6. Rationale for Unified End-to-End System Rationale • Single point integration with external systems such as treasury and payment gateways • Generation of State-level MIS • Contractors view the State as a single procurement entity • Register once, participate on all tenders in the State • Get automated notifications about all tenders published in the State • Government officers get accustomed to a single software • Inter-department transfer of govt. employees Implementation of unified end-to-end e-Procurement is a Vision, Policyand Architectural decision.

7. Project Development

8. Project Objectives • Infrastructure for effective implementation of procurement policy of the State • Enhanced transparency • Ease of access to contractor community • Availability of advanced procurement software to big, medium and small procurement entities alike • Software to handle entire end-to-end procurement processes and not just tendering • Consistent and sustainable contractor development • Less paper; environment friendly

9. Key Decisions Taken • Scope definition • Start point: Estimate preparation by AEE • End point: Payment to contractor • Detailing the processes • Definition of Functional Requirements Specification (FRS) • Additional definitions • Technology requirement specifications • Security requirement specifications • Operational requirement specifications

10. Key Decisions Taken • Service Level Agreement (SLA) Definitions • Operational SLA • Deployment SLA • Business model • Public-Private-Partnership (PPP) model • Transaction based model; “Pay per use” • Contract pays transaction charges • Slab-based payment • Module specific pricing • Separate payments for goods and works procurement • PPP modeling • Bid Process Management

11. Defining Characteristics of GoK’s e-Procurement System • Envisioned as an end-to-end platform (i.e.) all stages of procurement from indenting until payment will be handled electronically • A single platform will be shared by all government agencies in the State • Fully PKI-enabled system • Contractors will not be required to visit government offices to participate in tenders and also for bid submission • Payment due to contractors will be paid electronically using NEFT • Implemented on Private-Public-Partnership (PPP) basis; the private partner is paid on a transaction basis

12. Architecture

13. Functional Architecture e-Tendering Contract Management Indent Management e-Auctions Catalogue Management Suppliers and Buyers Master Data e-Payment, Accounting and MIS Dept. 1 Dept. 2 Dept. n… Supplier 1 Supplier 2 Supplier n

14. Technology Architecture • Flexible design • A single instance of software • Workflow configured as per dept specific requirements • Driven by parameterized understanding of public procurement processes • Programming language: Java • Application server: JBOSS • Database: MySQL • Workflow engine: JBPM • Entirely built upon open source technologies

15. Institutional Architecture Chaired by Additional Chief Secretary, Govt. of Karnataka Steering Committee Chaired by Principal Secretary, e-Governance Project Monitoring Committee Headed by CEO Centre for e-Governance e-Procurement Cell Headed by Project Director

16. Sample Workflow As per delegation of powers Asst Exec Engr (AEE) As per delegation of powers AEE Create abstract estimate Approve abstract estimate Create detailed Estimate & do rate analysis Approve detailed estimate EE as Tender Inviting Authority (TIA) As per delegation of powers EE (TIA) Publish Tender Prepare Draft Tender Schedule Approve Draft Tender Schedule EE as Tender Acceptance Authority (TAA) As per delegation of powers EE as Tender opening official Contractors Evaluate technical Bid Documents Bid submission Unlock tenders & Verify EMD Approval of technical Bid evaluation As per delegation of powers EE as TAA Decrypt commercial Proposals of technically Qualified bidders Award of contract Approval of commercial Bid evaluation EE as TAA Contract Management

17. Roll-Out Status

18. Project Statistics Training Users Tenders

19. Number of Suppliers Registered

20. Value of Tenders Published

21. Number of Tenders Published

22. List of Notified Government Agencies as on May 2009

23. Process Reforms

24. Process Reforms • Karnataka Transparency in Public Procurement (KTPP) Act amended to provide legal backing to the initiative • Centralized Supplier Registration; register once and participate in all tenders floated in e-Procurement platform • Receipt of EMD and tender processing fees using e-Payment • Credit Card, Direct Debit, NEFT and Over the Counter • Administration of software done by Govt. • Workflow management • Implementation of transfers and delegation of powers • Establishment of e-Procurement cell

25. Extract from KTTP Act Section 18-A. E-Procurement (1) There shall be a single unified e-procurement platform for all procurement entity which may be notified under sub-section (2) (2) With effect from such date, as may be specified by the Government, by notification, a procurement entity in respect of a class of procurement, if any, as may be notified shall procure its procurements through the e-Procurement platform. (3) Notwithstanding anything contained in this Act, the Government may make rules, for specifying a separate procedure to be followed by procurement entities notified under sub-section (2) for e-procurement through e-procurement platform, and for non-application of other procedure of procurement to e-procurement.

26. Implementation Experiences

27. Perceived Impact (Business Community) • Enhanced transparency in tendering and procurement • Free download of bid documents • Reduction in travel and other miscellaneous expenditure • Electronic submission of bids • Ease of access

28. Perceived Impact (Government) • Tender opportunities effectively publicized • Development of track-record on contractor’s performance • Rich MIS data on various aspects of procurement at the State government level (both as-on-date and accumulated MIS) • Faster file movements and integrated file monitoring system • Enhanced efficiency measured through faster completion of procure-to-pay cycle • Standardization of procurement procedures

29. Perceived Impact (Citizens) • Better utilization of tax-payers money • Real-time access to the status of works, goods and services procured by the State (to be made available soon)

30. Key Challenges • User readiness • Attitude and mindset • Availability of IT infrastructure • Skilled personnel • Network connectivity in user agencies • Change management • Standardization of procurement processes required for development of a single instance software

31. Learnings • Successful deployment of software in Public Works Department (PWD) in the pilot stage • Amendment to KTPP Act has been very helpful in rolling out the system • Dedicated training centers and facilitation centers • Extensive handholding support requirements • Equitable sharing of risks and responsibilities with private partner in PPP model • System administration by Government is good • Establishment of good robust e-Procurement cell is essential

32. Future Roadmap… • Framing e-Procurement Rules • Organizing seminars and training workshops • Rolling out Contract Management, Catalogue Management and e-Auctions • Implementation in all government departments / organizations by the end of 2010 • Be a Role-Model on e-Procurement implementation

33. Thank You