Public procurement, also called public tendering or government procurement, is the purchase of goods, works or services by a public authority, such as a government agency. This procedure is strictly regulated to pursue the following objectives:
- to receive the best possible price for goods and services;
- to open up sufficient and fair competition between suppliers;
- to ensure that public contracts are awarded fairly, transparently and without discrimination.
The public procurement method that allows to reach these objectives is open tendering. It requires procurements to be open to all qualified and interested bidders, be appropriately advertised, have objective qualifications criteria, and be awarded to the least-cost provider without contract negotiations.
The law of most countries requires the procuring authority to use public tenders for the procurement if it exceeds a certain threshold. Values and procurement procedures may differ, but it becomes general practice to open as much information as possible in order to prevent fraud, waste, corruption or local protectionism.
To make open tendering even more efficient, increase cost savings and improve transparency public sector agencies can use e-Procurement.
e-Procurement is the usage of Internet-based information/communication/networking systems to carry out one, several or all stages of the procurement process. Ideally, it should be an end-to-end solution that integrates and covers all procurement stages, but such systems may provide separate solutions such as e-Tendering, e-Marketplace, e-Auction/Reverse Auction, and e-Catalogue/Purchasing.
Using email and Internet organizations can trade electronically, so e-Procurement will reduce necessity in paper documentation and accompanying procedures. Moreover, there is no need to buy expensive technology to take part in e-Procurement. For the businesses that are interested, computer and internet connection will be basically enough. As for the governments, they will need to invest into e-Procurement software. There are different options: to use either commercial or open source solutions, to buy ready-for-service software or order custom development. There are a lot of systems currently on the market with different licences, functionality, features and standards.
Interest in e-Procurement has been growing internationally in recent years, specifically as a part of larger e-Government efforts. Initiatives have been implemented in USA, UK, Slovakia, Georgia, Kazakhstan, India, Australia, Singapore, and Malaysia.
Georgia is one of the few countries in the world that have already introduced a centralized and comprehensive electronic procurement system in order to automate the internal and external processes associated with state procurement. Georgian Electronic Government Procurement (Ge-GP) is very innovative system that aligns with EU procurement standards. Its main features include:
- advertising the requirement for goods or services
- suppliers registration,
- issuing and receiving tender documents via the Internet,
- automating the evaluation of responses to a tender,
- Questions/Answers module,
- contract management registry for uploading contract performance and payments data;
- E-PLAN - creation and registration of state procurement plans;
- Black List with dishonest and banned suppliers.
It is time to change how governments implement their procurement processes and what data they release. They need to choose the most appropriate method to meet the needs of both the provider and the public. Especially, when special software can so easily promote accountability and transparency.
Ukraine uses open source Python-based toolkit for its public procurement practices. You can find more information at openprocurement.org.
View our case on Open Procurement for more details on implementation of this initiative in Ukraine: