Status of the Electronic Procurement

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Status of the Electronic Procurement in Korea
and Future Tasks
January 2003
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Table of Contents
1. What is the GePS? 2. Overview of the
procurement in Korea 3. How to promote the
GePS - Success factors 4. Major contents of the
GePS 5. Detailed job improvement through the
GePS 6. Expected effects of the GePS 7.
Future tasks
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1. What is the GePS?
Government e-Procurement System

• A system that digitally processes complicated
  procedures and paperwork
• Digitalizing all the procedure from purchase
  request to payment
• Removing or drastically reducing documents
• 27,000 public organizations and 70,000 companies
  use the system

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2. Overview of the Procurement in Korea

• Centralized procurement system
• Where goods, services and construction works
  exceeds a certain amount has to be entrusted to
  the Public Procurement Service or PPS
• To enhance transparency and save national
  budget
• The amount of the public procurement 56
  billion
• PPS handles about 30 of the total public
  procurement
• ? The total public procurement takes about 47 of
  the entire government expenditure

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3. How to promote the GePS - Success factors
Presidents strong will
Government-widesystematic promotion
Internetinfrastructure
Step-by-stepapproach
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3. How to promote the GePS - Success factor(1)
3.1. Presidents strong will of Powerful IT
Country

• I am going to make Korea the best IT nation in
  the world
• to build solid foundation of IT country.
  (1998 Inauguration)
• Adopting a national-wide strategy Cyber Korea
  21(19992002)
• To build the knowledge-based nation through
  on-line
• To improve national competitiveness and quality
  of life
• To develop as one of the top 10 advanced IT
  countries

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3. How to promote the GePS - Success factor(2)
3.2. Set up a government-wide promotion system

• Organizing e-Government Special Committee
  (Nov. 2001)
• Under the direct control of the President
• Consist of officials and private sector
  specialists
• ? Vice minister level officials planning and
  budget
• ? Private sector specialists applying new IT
  technology
• Selecting 11 tasks for e-Government
• Comprising civil service administration,
  procurement, taxation, education, social
  insurance, etc
• The GePS is one of the most important tasks

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3. How to promote the GePS - Success factor(3)
3.3. Step-by-step approach

• BPR/ISP? by Ministry of Planning and
  Budget(MPB)
• With a neutral and balanced view
• MPB has budgetary authority
• ? BPR/ISP Business Process
  Reengineering/Information Strategic Planning
• System building by PPS
• With rich e-procurement experiences
• PPS has developed EDI/EC system since 1997
• With accumulated work experiences and knowledge
  as the central procurement agency for the
  past 50 years
• ? EDI/EC Electronic Data Interchange/E-Commer
  ce

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3. How to promote the GePS - Success factor(4)
3.4. Well-developed Internet infrastructure

• No. 1 in Internet Connectivity
• Internet users 25 million
• Broadband internet subscribers 10 million
• 70 of total households
• Top Internet using rate in the world
• Stock trading, internet shopping, etc

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4. Major Contents of the GePS
4.1 System architecture(1) - linked to 30
outside systems
Portal
Goods classification system
e-Procurement system
e-Procurement ASP
Supplier supporting service
Contracted products catalog
Unit contract system
Linkage
Use
Integrated Notice
Commercial Products catalog
Documents distribution and outside linkage
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4. Major Contents of the GePS
4.1 System architecture (2)

• In association with 6 authorized certification
  agencies
• Securing the stability of on-line transaction

• By sharing various information including
  suppliers data
• Enhancing convenience of suppliers

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4. Major Contents of the GePS
4.1 System architecture (3)

• By being connected with 11 guarantee agencies
• On-line submission of bonds for prepayment,
  tenders, performance, etc.

• In association with 13 major commercial banks
• Shortening payment time

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4. Major Contents of the GePS
4.2 The GePS technology base

• Adopting encryption technology based on public
  key infrastructure and digital certification
• Based on the world-wide standards of e-document
  (XML, SOAP, EBMS, etc)
• A point-in-time confirmation service and an
  individual ID confirmation service

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4. Major Contents of the GePS
4.3 Major functions of the GePS

• All the bid-info is required to be placed on the
  GePS
• 81 of bids were conducted electronically (As of
  Dec. 2002)

• From specification review to payment

• Information on 420,000 goods, and 70,000
  suppliers
• Purchasing of commodities pre-contracted by PPS

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4. Major Contents of the GePS
4.3 Major functions of the GePS (www.g2b.go.kr)
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5. Detailed job improvement through the GePS
5.1 Integrating the supply of bid Information
The GePS
Bid Info.
PPS
Registration
Use registration Integrated Notice
Bid Info.
Registration
PPS
Construction - Related Associations
Information sharing
Public Organization
Construction - Related Associations
Suppliers information
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5. Detailed job improvement through the GePS
5.2 Simplification of documents and prompt
e-Payment
Before
After
Paymentofficer
Financial officer
Paymentofficer
6.Payment request
2Delivery confirmationand payment request
3.Payment handling
7. National treasury check/payment
5.Payment request
4. Delivery confirmation
SupplierCompany
1.Delivery
Inspectionofficer
Suppliercompany
Inspectionofficer
1.Request of delivery and payment
3.Deliveryconfirmation
2.Request of inspection
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5. Detailed job improvement through the GePS
5.3 Expanding the range of commodity selection
1.Request for quotation
e-Catalog
2.Search
1.Product registration
2. Quotation Submission(off-line)
Suppliercompany
Public Organization
3.Orderplacement
3.Order Placement
2.On line quotationsubmission
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5. Detailed job improvement through the GePS
5.4 Standardization of the classification of
commodities
Different item classification/attributes/manageme
nt system
Application of standard classification/attribute
system
Based On UNSPSC
Localgovernments
PPS classification
Application of differentsystem
Othergovernmentagencies
Publiccorporationclassification
PPS
DefenseClassification
PublicOrganization
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6. Expected effects of the GePS
Transparency
Efficiency
Policy making
Competitiveness
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6. Expected effects of the GePS
6.1 Enhancement of transparency

• By blocking up face-to-face transactions
• Making public in real time of the status where
  the procedure goes
• Disappearance of prearranged bidding
• By enhancement of suppliers competition
• ? The number of bidders increased by three
  times after the e-bid started
• Centralized system to avoid duplicate system
  development

6.2 Saving of government budget
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6. Expected effects of the GePS
6.3 Strengthening corporate competitiveness

• Stimulating the e-commerce in the private sector
• Inducing the competitive environment in price
  and quality
• Unification of commodity classification system
  will also help

6.4 Improving government procurement policies

• Obtaining the statistical data of public
  procurement

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7. Future tasks(1)
Focusing on stable system operation
The Government e-Procurement System(GEPS)
Enhancement of PPSexpertise in procurement
Maximizing customersatisfaction
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7. Future tasks(2)
7.1 Focusing on stable system operation

• System securities strengthened against hacking
  possibilities
• User training to spur on the public
  e-procurement
• Continuous system upgrading to renew the
  functions

• Improving the reliability of the GePS contents
• Broadening the product choices
• Developing more flexible contract methods

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7. Future tasks(3)
7.3 Enhancement of PPS expertise in procurement

• Strengthening procurement-related consulting
  services
• Developing new contents for price, products, etc
• Working out new managerial expertise in various
  areas
• ? IT, research service contract, etc
• Settlement of contract disputes in e-procurement

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• Maximizing the benefits of the GePS
• e-bid, e-shopping, e-payment, sharing information

• Great impact on anti-corruption and enhancement
  of transparency
• Sharing know-how of the GePS with other
  countries
• Training program, system building, problem
  solving