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Gi Su KimDirector
Public Procurement Services
ROK New York Office
International Public Procurement Conference
Reinventing Government Procurement
Through Digitalization
October 2004
CONTENTS
1. Why did we develop GePS?
2. What is GePS?
3. What are its achievements?
4. What has made GePS a success?
5. Next steps of GePS
1. Why did we develop GePS?
1.1 Overview of the Public Procurement in Korea
1.2 Understanding Public Procurement
1.3 E-Commerce, the Best Way to Innovation
1.4 Strategic Approach for Adopting E-Commerce
• Combines centralized and decentralized procurement systems
Centralized : Procurement by central and local government agencies over a certain threshold must be assigned to PPS
Decentralized : Procurement under the threshold and state-owned enterprises’ procurement are conducted by themselves
Centralized (17 billion, 30%)
Decentralized(41billion, 70%)
Total Volume: US$ 58 billion(’02)
• May use PPS’ GePS for decentralized procurement
1.1 Overview of the Public Procurement
1. Why did we develop GePS ?
PPS is a centralized procurement agency with a total of 935 employees, and was created in 1949
Importance of public procurement Eases the burden of taxpayers’ by reducing national budgets
Most of public expenditures are distributed by procurement Sharply increases public confidence through the transparent process
Eliminates common suspicions of corruption Plays the role as a tool for fiscal policy
1.2 Understanding Public Procurement
Traditional characteristics of public procurement
High cost
Low transparency
Low service quality
Paper-oriented procedure - excessive paperwork
Labor-intensive work - frequent office visit
Complicated process
1. Why did we develop GePS ?
E-Commerce, the Best Way to Innovation
– To sharply increase transparency and efficiency by online transactions
– To maximize the return on investment by joint use of one system
No need to establish another e-procurement system by each agency
1.3 Need for Enhancing Performance of Public Procurement
To respond to a changing environment
Low cost
High transparency
Greater convenience
Demand for High Quality - Active participation in public affairs
Expansion of e-Commerce
E-Government trend
Digitalization
1. Why did we develop GePS ?
1.4 Strategic Approach to Adopting e-Commerce
To become a professional organization by differentiating us
– Transformed our organization with the use of IT
Took initial steps for e-procurement
– Started with PPS’ own business (centralized procurement)
Exchanged e-documents by using EDI and opened e-mall (1997-1999)
Provided e-bidding and e-payment services (2000)
– Facilitated e-Commerce to the entire public sector including decentralized procurement
Initial operational capability September 2002
– GePS is a Single Window for public procurement which digitalized the entire processes from order to payment
1. Why did we develop GePS ?
2.1 Single Window for Public Procurement
2.2 Digitalized the Whole Procurement Cycle
2.3 Integrated and Shared Service
2.4 Internal & External System Architecture
2.5 Technology base of GePS
Demo : Sample pages of GePS
2. What is GePS ?
2.1 Single Window for Public Procurement
• Single point-of-entry for public procurement opportunities
• Centralized business registration
– With just a one-time registration with GePS, businesses can participate in all government business opportunities
– Repository of vendor data for the public sector
2. What is GePS ?
– All bids are legally required to be announced on GePS
– Examples of bid information : end-users, project size, estimate costs, technical specification, and award criteria
2.2 Digitalized the Whole Procurement Cycle
Automate end-to-end procurement process from requisition to payment
2. What is GePS?
e-Mall e-Paymente-Contracte-Bid
Bid documents preparation and posting
Invitation for bid
Secure submission and storage of bids
Opening of bids
Posting of award decision
One stop shopping source – search products, compare prices, submit PO to vendor
25,000 off-the-shelf products such as office supplies through framework contract
Submission of invoice
Electronic Payment Transfer (EFT)
Fast payment within 4 hours after receipt of invoice
Support electronic contract documents form
Buyers and sellers sign contract documents using digital signature
Storage of contract documents
Submission of inspection request and inspection certificate
2. What is GePS?
Provides one-stop service by linking GePS with 53 external systems including :
– Korea Financial Telecommunications & Clearings Institute for internet banking, National Finance Integrated System by Ministry of Finance and Economy for government financing, etc
– 11 guarantee corporations for warranty of transactions, 6 construction related associations for obtaining business credits, etc
Provides e-procurement services for all public organizations
– Joint use by all agencies from the central and local governments to state-owned enterprises by logging on to GePS
2.3 Integrated and Shared Service
End-userEnd-user
PPS OperationPPS Operation
SuppliersSuppliers
UseUse
Certification-Related agencies
Certification-Related agencies
Ministry of GovernmentAdministration
And Home Affairs
Ministry of GovernmentAdministration
And Home Affairs
Construction-relatedAssociations
Construction-relatedAssociations
Korea Financial Telecommunications& Clearings Institute
Korea Financial Telecommunications& Clearings Institute
Suretyinsurance
Suretyinsurance
Ministry of FinanceAnd Economy
Ministry of FinanceAnd Economy
Construction CALSConstruction CALS
LinkageLinkage
PortalPortal
Integ-Integ-ratedrated
NoticeNotice
Commercial Commercial Products Products catalogcatalog
Contracted Contracted productsproductscatalogcatalog
Goods Goods classificationclassification
systemsystem
Documents distribution and outside linkageDocuments distribution and outside linkage
User registration User registration
suppliers’ suppliers’ performanceperformance
e-Guaranteee-Guarantee
e-payment e-payment
e-Procurement systeme-Procurement system
e-Procurement ASPe-Procurement ASP
Supplier supporting serviceSupplier supporting service
Unit contract systemUnit contract system
LinkageLinkage
2. What is GePS?
2.4 Internal & External System Architecture
2. What is GePS?
2.5 Technology Base of GePS
Adopting encryption technology based on public key infrastructure and digital signature
Based on the world-wide standards of e-document (XML, SOAP, EBMS, etc)
TSS (Time stamp service) and authentication
Combination of Information Protection Technologyand the new eCommerce Model
Demo : List of invitation for bids & Click on e-bid
Click Here for Bid Participation
2. What is GePS?
Demo : Detailed information for each bid
Deadline for participation, estimated costs, technical specification, award criteria, etc
2. What is GePS?
Demo : Bid results on a real-time basis
List of participants and price proposed
2. What is GePS?
Demo : First screen of e-Mall
Lately listed Items on e-Mall
2. What is GePS?
3.1 Enhanced Efficiency of Public Procurement
3.2 Improved Transparency of Public Procurement
3.3 Stimulated E-Commerce in the Private Sector
3.4 Facts and Figures
3.5 Received High Appraisal from the International Community
3. What are its Achievements ?
3. What are its achievements?
• Lower information costs
3.1 Enhanced Efficiency of Public Procurement
– Supplier’s access to business opportunities is timely, complete, and unconstrained by space or time
– Reduce market research time and facilitate strategic sourcing
• Lower transaction costs – Reduce in business hours by document exchanges online – Supplier is not required to visit to government agencies – Research, ordering, bidding, fulfillment, are all more efficient
• Increased competition– The number of bidders has tripled as a result of e-procurement– Electronic bidding allows more dynamic price competition
Reduced US$ 2.8 billion a year by GePS : US$ 2.5 billion(90%) in savings by the private sector and 0.3 billion(10%) by the public sector
• “Before GePS, over 1,000 participants
sometimes arrived for one bid… in that
case regardless of their posts, all mem
bers of our agency had to support the e
xecution of it from the registration to bid
opening for several days… But now I c
an finish all of my work alone at my PC
in ten minutes… A total of 210,000 parti
cipants participated last year…..:” (a
city-official in charge of procurement)
• “I can reassign the employees’ duty because of GePS from the paper or routine work to management or sales divisions for more productivity…:” (a CEO of a private enterprise)
• “Before GePS, the time for participating in a bidding required at least half day, but now… only 1 minutes is enough for the same work, our company participated in bids 2,000 times a year….” (a clerk of a construction company)
• “I used to check the gazette and newspapers at all times for information, but now, I start my day surfing GePS with my morning coffee…” (a businessman in charge of sales)
3. What are its achievements?
GovernmentBusiness
Public, equal announcement and access on a real-time basis
Increase competition of small purchases by using e-Bidding
• Increased the disclosure of procurement information
• Diminished the possibility of corruption
3.2 Improved Transparency of Public Procurement
Online contact instead of face-to-face contact
Substantially reduce the opportunities and incentives for corrupt practices
Increase the likelihood of detection and positive proof of irregular transactions
3. What are its achievements?
3. What are its achievements?
• “Because of the peculiar characteristics
of procurement due to conflicting intere
sts, citizens had doubts about transpar
ency, however hard we may have tried
… But now, most of cases are execute
d by GePS, I feel citizens’ trust improvi
ng…:” (a city-official in charge of procur
ement)
• “Before GePS, sometimes we formed collusion with our rivals in front of the the bidding place for prearranged bidding… But now the chances of such an irregular practices are virtually non-existent…:” (a clerk of a construction company)
• “I used to visit the agency for the contract process, so I sometimes felt uncomfortable, whether I had to give a gift to my clients or not, but now I don’t need to visit the client, so I am happy with the new situation…:” (a businessman in charge of sales)
GovernmentBusiness
Promoted an e-Commerce mindset
Built the Infrastructure
3.3 Driving force of eCommerce in the Private Sector
Accumulated business experiences of online transactions
92,000 companies are required to use GePS, a common mode of e-Commerce
CEOs have emphasized the importance of the Internet and e-Commerce
Created the computer environment such as PC, Internet connection, etc Promoted the use of digital signatures as the best way to ensure security
First adopted and verified digital signature for e-bid (September 2000)
The number of issued signatures rose ten times for first 3 months
Finally, government adopted them as mandatory for the private shopping mall (February 2004)
3. What are its achievements?
3.4 Facts and Figures
3. What are its achievements?
Registration
ElectronicBid
e-Contract & e-Payment
•92 thousand registered businesses •26 thousand government agencies utilize GePS •More than 80 thousand visits to GePS daily
•92% of all bids are conducted online through GePS•140 thousand tenders published annually 3500•15 million businessmen participated on the web (1.25 million a month) •Total transaction value a year : $21.5 billion (FY 2003)
• No of purchase orders issued online a year : 0.5 million (99% of all purchase orders )•Total e-Mall transaction value : $4.3 billion (FY 2003)
ElectronicMall
• 23 thousand electronic contracts a year • 99 % of PPS payment transactions are electronic(FY 2003)• 213 thousand electronic payments a year
3.5 Received High Appraisal from the International Community
World Bank Conference on Transparency (Jan. 2003)
11th IACC(International Anti-corruption Conference) (May 2003)
UN/CEFACT(United Nations Center for Trade Facilitation and Electronic Business) (Sep. 2003 & Feb. 2004)
5th Global Forum on Re-inventing Government (Nov. 2003)
Recipient of the first UN Public Service Award(UNPSA) 2003
Selected for innovations in the public service for Asia Pacific Region (June, 2003)
International Recognition (presentation)
3. What are its achievements?
4. What has made GePS a success ?
4.1 Government-wide steering organization
4.2 World-class Internet Infrastructure
4.1 Establishment Government-wide Steering Organizations
Establishment of “special committee for e-Government” as a supreme taskforce for building e-government (JAN 2001 ~ JAN 2003)
Strong will for pan-government initiative
The Committee assumed full management of e-government project
Joint efforts from public sector and private sector
Public sector : planning and budgeting
Private sector : applied new IT
11 e-government initiatives under the principle of selection and concentration
GePS is one of e-government initiatives ; including government-wide civil
service, tax, national finance, education, social insurance, integrated
personnel management, etc
4. What has made GePS a success ?
4.2 World-class IT Infrastructure
– Ranked first in internet connectivity 30 million Internet users(65.5% of the population), 11 million households with broadband Internet subscribers(75%), etc– By solving the Digital Divide in business, e-Commerce was not
considered a barrier to public procurement
Well-developed Internet Infrastructure
Demands of the stakeholders– Voluntary use due to profitability No more red tape, no more suspicion of corruption, no more wasted time, etc– Transparency from Public– Accumulated experiences of PPS’ staff, for example, continuous
practical training of users (23,000 customers in 2003)
4. What has made GePS a success ?
5. Next Steps of GePS
5.1 Customer Relationship Management (CRM)
5.2 leading eCommerce through standardization
5.3 Ubiquitous e-Procurement environment
5.1 Customer Relationship Management (CRM)
• Deliver personalized service to each customer
– Give the customers what they want, when they want it
– Create the optimal channel mix combining new channels (PDA, mobile, web call center) with conventional methods (phone, internet, e- mail)
• Real-time access to and use of customer data
5. Next Steps of GePS
• Offer ongoing customer care across all channels -- with a customer interaction center
– Capture complete history of customer activity across channels and products
– IP based call center, Inbound & outbound call, escort browsing, voice chatting
• To standardize electronic documents in compliance with global standards– Appling IT infrastructure based on global standard
– To participate actively in United Nations Center for Trade Facilitation and Electronic Business (UN/CEFACT)
• To discuss the GePS standards as the global one of e-document and business process, etc
• To expand standardization of e-catalog – GePS adopted United Nations Standard Products and Service Classifica
tion (UNSPSC) as a standard for commodity classification (410,000 items)
– Partnership with private industry to ensure e-catalog interoperability between public and private
5. Next Steps of GePS
5.2 Leading eCommerce through Standardization
5.3 Ubiquitous e-Procurement Environment
• Mobile service
– Providing Access to procurement information through internet-connected
mobile device such as PDA (Personal Digital Assistant) – Presently running Wireless PDA service through WLAN or CDMA – Off-line web browser service will be available in September 2004
• Wireless e-bid pilot project
• RFID-based personal property management
– Radio Frequency Identification (RFID) allows government to more efficiently manage asset management
– Phase 1 : High-value equipment such as computer in PPS (Dec 2004) → Phase 2 : all assets exceeding given amount in government (2005 ~ 2006)
– PPS will pilot e-bid through mobile device such as PDA by wireless digital certificate technology (December 2004)
5. Next Steps of GePS
Demo : Mobile Service
Main pageSearch
results of bid information
Detailed bid
information
Thank YouThank You