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Chennai-based RN Lal has been a Railway contractor for the last two decades
but somehow, for the last 5-6 years, he kept loosing out on all the lucrative
railway contracts. His grouse was against the powerful railway tender mafia
which managed to support smaller contractors.
But those worries are now a thing of the past. As part of its overall reform
process and to increase transparency in its dealings, the Indian Railways
decided to adopt and implement e-procurement systems, with Northern Railways
(NR) taking the lead. NR successfully started using e-Procurement from May 2005
and presently covers all types of tenders issued by the Stores Department. This
has hugely benefited small contractors like Lal who can now easily apply for
contracts from anywhere in India without coming to the Railway office. The
adoption of e-procurement has released the contracts from the fetters of the
mafia.
A well-implemented e-procurement system can enable government departments to
connect directly with their suppliers including management of correspondence,
bids, previous pricing, etc. The objective of e-procurement was to bring about
wider publicity of government procurement opportunities and ensure transparency,
not to mention cost saving through higher competition and demand aggregation.
Doing away with the physical interface with government staff itself is a major
catalyst in bringing down corruption.
However, one needs to make clear that while e-procurement includes
e-purchase, e-inspection, e-tendering and e-payment, most states and government
departments are currently only using e-tendering.
Taking the lead in popularizing e-procurement by government departments was
the directorate general of supplies & disposals (DGS&D). Functional under the
Commerce Ministry, DGS&D entered the era of e-governance when it launched the
live opening of e-bids for DGS&D rate contracts from April 1, 2006 thereby
marking the computerization of all its major procurement and related-activities.
DGS&D initiated e-tendering as one of the components of its e-procurement
platform for bringing in transparency and simplifying the tendering process,
said Jairam Ramesh, minister of state for commerce at the launch.
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E-tendering or online tendering is an electronic tool for intending bidders
to download tender forms, fill them up, even submit online and attend the
opening of bids onlineall from within their office premises. E-tendering would
ultimately reduce cost of procurement for both government and trade and industry
besides ensuring bigger participation of trade as even suppliers based in far
flung areas.
The Early Movers
Northern Railways is using e-procurement in its stores departments and till
date more than 3,000 e-tenders have been uploaded and 1,500 opened
electronically. And 800 e-tenders have been decided through e-procurement.
Around 3,287 suppliers are registered with Northern Railway.
From July 2008, the existing application software (stores tendering module)
developed by HCL and running successfully at NR in ASP mode, has been extended
for use by other railway departments and production units on a centralized data
center. A single portal ireps.gov.in has been developed for the tendering
process for all Railway units, and there is a single login registration for
vendors.
The e-procurement application system has been designed to facilitate online
participation in the procurement process by buyers and suppliers using a common
platform and to bring in transparency and access to information. The application
has also been equipped with the latest digital security features.
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| The manual system of tenders
had drawbacks: possibility of cartel formation, threats to bidders; unwanted
pressure on department officials; delays in tender finalization; and lack of
MIS reports Suresh Chanda,
IT secretary, Andhra Pradesh |
The e-procurement model
followed by the Gujarat government is being done on SaaS which means that
the government does not have to pay any upfront capital cost and a fixed fee
is paid by the departments for every tender
Raj Kumar, secretary, department of
Science & Technology, Gujarat |
Taking a cue from these departments, Coal India, a mini Navratna company too
has taken a step towards making the procurement system more transparent. After
the implementation of the Integrity Pact and signing of MoU with Transparency
International, Coal India has now entered into a contract with MSTC which will
act as a service provider for e-tendering and reverse auction services for the
procurement of materials ranging from equipments, consumables and spare parts
etc.
The estimated value of purchase, to be handled through e-procurement will be
about Rs 3,400 crore in the first year. The contract to MSTC has been finalized
through competitive bidding process and with the issue of this contract, CIL and
its subsidiaries will enter into a new era of transparency and speedier decision
making and objectivity in decision making. This would also reduce the time
consuming procedural delays in purchasing, says PP Sengupta, chief general
manager, material management division, Coal India.
Defence too Moves in
For long the Indian defence forces have been kept behind closed doors. Most
of the defence procurement purchases have been, until now, cloaked under the
security secrecy veil. But now one of the defence arms, the Indian Navy has
taken it upon itself to come out in the open. For the last eleven years Indian
Navy has been using an in-house inventory management application operating over
a wan called Integrated Logistics Management (ILMS). In order to make ILMS even
more transparent and to cut down on manual involvement and avoidable paperwork,
it was decided to interface ILMS with the e-procurement solution, says a Navy
spokesperson.
Presently only the department carrying out the material management functions
is using the ILMS platform that is using the e-procurement facility. A number of
key procurement processes like tendering, processing of quotes and placing
purchase orders still involve file handling and manual intervention. These
processes would now be made available electronically through implementation of
e-procurement.
For addressing the security concerns, the e-procurement solution has a
plethora of security features, says the spokes person. These include secured
hosting facility, web security in the form of firewalls, password and digital
signature authentication, digital signing of the bid, bid encryption, audit
trail and security audit by third party.
There will be challenges associated with the transition from manual to
electronic procurement. Which the Navy is addressing We are constantly engaged
with private vendors so that they too can be a part of the same. We are also
involved with educating them so that they can see the benefits for facilitating
flow of transaction, adds the spokesperson. With ILMS, the Navy was able to
transit easily to an electronic application and for overcoming the challenges
associated with e-procurement they engaged the users and carried out relevant
training.
Presently e-procurement is being implemented in Mumbai and others will follow
suit.
State of the States
Although most states in India are now actively adopting e-procurement for
tendering and purchase purposes, a few have led from the front. States like
Andhra Pradesh, Karnataka and Gujarat are a few noteworthy ones which introduced
e-procurement in government departments even before DGS&D did. They managed to
achieve early what no other state coulddoing away with tender mafias to ensure
equal participation of contractors and bringing in transparency in tender
opening and making information available to all bidders once the tender was
opened.
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Following Suit: E-Procurement in Uttar Pradesh |
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As Part of the NeGP Mission Mode Project, the e-procurement project was
launched in the state in December 2007, post which orders were passed in
January 2008 for introducing e-procurement in six departments. These six
departments are irrigation and public works department (for all tenders
above Rs 1 crore); health and medical services (all tenders coming under the
purview of the high power committee); commissioner industries, World Bank
and externally aided projects, printing and stationery, IT & Electronics
department (all works and materials above Rs 10 lakh and services above Rs 5
lakh). The implementation of the scheme is on the platform developed by NIC
and already in use in states like Tamil Nadu, Haryana and Orissa.
All the six departments are expected to roll out the pilot project by
September 30, however, the central zone of the Lok Nirman Vibhag has already
published two tenders out of which one is already in the final stages while
the next is in the process. The printing and stationery department too has
come out with tenders for thirty-two materials out of which three tenders
(12 materials) are in the final stages while for the fourth tender
(including 20 materials) technical part has been opened.
NIC, apart from being responsible for maintaining the UP e-procurement
portal, is also responsible for providing digital signatures for the
department officials. UP Electronics Corporation has been designated as the
nodal agency for coordinating with key departments, NIC and other
departments while UPLC is providing hands-on training and mock tender
submission. Under the chairmanship of Principal Secretary/Special Secretary,
an e-monitoring cell has been formed which will ascertain the progress of
the project. |
The manual system of tenders had drawbacks associated with it like
possibility of cartel formation along with physical threats to bidders during
filing of bids; unwanted pressure on department officials and inordinate delays
in tender finalization; and lack of MIS reports on past procurements, says
Suresh Chanda, IT Secretary Andhra Pradesh.
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