KONEPS - mois.go.kr

KONEPS Best Practice of e-Procurement

Republic of Korea

Republic of Korea

e-GP

KONEPS (Korea oN-liNe e-ProcuremeNt SyStem)

Best Practice of e-Procurement

16 Transition to e-Procurement System: Implementation of KONEPS

25 Success Factors and Benefits of KONEPS

37 Innovative Seamless Procurement Service

- Background

- Goals and Strategies

- Establishing KONEPS Implementation Plan

- Implementation of KONEPS

- Success Factors

- Key Benefits

- International Recognition

- Advancement of KONEPS

- International Cooperation of PPS

06 Overview

08 Transition and Development of Korean Government Procurement Policies and Systems

13 Changes in Procurement Administration Environment and Innovation of Government Procurement

- Definition of Public Procurement

- Main Characteristics of Procurement Administration

- Government Procurement Policies

- Transition of the Korean Government Procurement System

- Public Procurement Service (PPS)

- Changes in Procurement Environment

- Role of Digitalization in Innovating Procurement Administration

Contents

KONEPS : BESt PracticE Of E-PrOcurEmENt 0706 PuBlIC PrOCurEmENT SErvICE

Overview Definition of Public Procurement

● Government organizations require a vast amount of human and material resources to perform not only basic functions for a nation to exist, such as diplomacy, national defense, and security, but various other missions including education, environment, society, welfare, and transportation.- The taxes collected from citizens are the main source of revenue to procure such

human and material resources, which are then properly allocated through the budgeting process

● Financial resources are largely allocated into personnel expenses for managing human resources and material costs required to obtain and manage material resources.- The process of obtaining material resources is called procurement and the concept of

procurement generally refers to purchasing and supplying goods and services. In specific, the act of obtaining materials resources to be used in the public sector1) is called government procurement 2).

● The categories of government procurement are largely divided into goods purchases for supplying material goods, service contracts for providing various services, and construction contracts for providing office environment or buildings and other facilities.- In a broader sense of supplying, in addition to human resources, all the environments

and resources required for government organizations to perform their tasks, government procurement also includes real estate, lease, insurance contracts, etc.

main Characteristics of Procurement Administration

The basic concept of procurement, which is to supply resources required for managerial activities in a more economical and effective way, is the same both for the public and private sector, but what is different in government procurement is that the financial resource to purchase public goods for the public activities of a nation mainly comes from the taxes collected from its citizens.

● High standards of fairness, transparency and ethicality required- Since a large portion of the national budget is allocated to procurement, it is more

likely to involve corruptions and special treatment benefits compared to other administrative acts and considering that the source of revenue for public procurement comes from citizens, the benefits and opportunities from procurement administration should be equally given to the general public.

- Any suppliers wishing to participate in public procurement should be given equal access and be assured that the selection process of the winning bidder is always fair and transparent.

● Function as efficient means to attain policy goals- Since procurement in most countries accounts for 10-15% of GDP and holds a

powerful purchasing power, it is the leading player of the market.- It is also necessary that procurement administration should perform political

functions such as ensuring responsible growth of the procurement market through fair competition between the existing participants, protection of socially disadvantaged businesses, preferential purchase of environmental products, and providing opportunities for new businesses that have potential to enter the market.

● A high level of professionalism required- There are numerous laws and regulations to ensure fairness of procurement and

perform political functions. Therefore, to have a thorough understanding and interpretation of these laws and prevent any possible conflicts in advance, abundant experience and a high level of professionalism are required.

● Appropriateness of specifications and prices as more critical factors relative to private sector- The ultimate goal of government procurement is not to seek profits but to supply

resources necessary to perform public missions and functions. Therefore, it is important to procure goods with appropriate quality and specifications to perform tasks of government agencies.

1) Public sector: includes the central government, local governments, public agencies, and national and local public enterprises. The public sector defined by Public Procurement Service, the central procurement agency of Korea, comprehensively includes all the organizations that have public characteristics, such as private schools, the union of farmers and fishermen, and nonprofit corporations.

2) Here, the concept of public procurement and government procurement will not be strictly distinguished and both will mean to include the public area where the Korean government can act as a procurer.

Overview


Government Procurement Policies

● Classification based on end user- Centralized procurement: A single specialized purchasing organization orders all the

goods and services- Decentralized procurement: Each government agency purchases the resources they

need autonomously⇒ Even in countries that pursue centralized procurement, small amounts of

purchases are left to each government agency’s discretion and generally, local governments and public enterprises make purchases autonomously.

⇒ Even in countries that pursue decentralized procurement, certain types of products such as medical supplies which are demanded by all government agencies alike are ordered in large quantities through centralized procurement.

● In Korea, the history of centralized procurement began after Public Procurement Service, the central procurement agency, was established in 1962 to efficiently carry out the national economic development plan.

Korea pursues both centralized and decentralized procurement policy.

- National agencies: are basically subject to centralized procurement except for the Ministry of National Defense, but each agency is free to make purchases below a certain maximum amount3).

- Local Governments and public enterprises: are free to make purchases without the amount limit and can request the central procurement agency to make purchases for them as required.

Transition of the Korean Government Procurement System

[ Era of Establishment ]● In the absence of an integrated procurement policy, each public agency made purchases

on their own decentralized procurement systems.

3) Up to 100 million won (USD 85 thousand) for goods and 3 billion won (USD 2.56 million) for construction contracts

● As the need arose to establish an organization to manage aid goods, centralized procurement appeared.- The Provisional Office of Foreign Supply (POFS) and the Office of Foreign Supply with

Exclusive Responsibilities for Foreign Procurement were established in 1949.- The Provisional Office of Foreign Supply was consolidated into the Office of Foreign

Supply in 1955 to become the foundation of Public Procurement Service, the central procurement agency in Korea.

[ Era of Industrialization ]● In 1962, when industrialization began, the Korean government established and initiated

a 5-year economic development plan for economic reconstruction. For the efficient execution of the plan, Public Procurement Service, the central procurement agency, was established in 1962.- Good purchases and construction contracts above a certain threshold became subject

to centralized procurement.⇒ At the time, local autonomy was not available, so local agencies were also subject

to centralized procurement.

● Centralized procurement continued to be expanded and strengthened such as through the government stockpiling project for daily necessities and key materials including raw materials and facility materials.

<1st Stage of Digitalization >

● Data management-level computerization for systematic management of procurement data (1977~ 1986)

- Stage-by-stage computerization of contract management work in the field of procurement (foreign procurement, accounting, construction work contracts, domestic procurement, management of commodity stockpiling) starting from government goods management (1977-1986)

● Online work processing started from 1987 limited to construction work contracts, distribution of supplies, registration of suppliers, etc.

[ Era of Globalization ]

After 1993, drastic changes occurred in the public procurement environment, including decentralization, globalization, and digitalization.

● Decentralization: Since the autonomy of local governments in 1995, purchasing became gradually decentralized.

Transition and Development of Korean Government

Procurement Policies and SystemsTransition and Development of

Korean Government Procurement

Policies and Systems


- Centralized procurement work was gradually transferred to the local governments and they became absolutely free, regardless of the amount, to purchase products in 2008 and execute construction work contracts in 2010.⇒ The existence of Public Procurement Service, the central procurement agency, was

threatened and Public Procurement Service pushed to innovate the procurement administration to strengthen the efficiency of centralized procurement and shift to a consumer-based service.

● Globalization: After the 1993 Uruguay Round negotiations, Korea joined the WTO Agreement on Government Procurement in 1994 and opened the government procurement market in 1997. - In line with this, contract policies and procedures were modified to meet the world

standards and related laws were improved and revised.⇒ The opening of the government procurement market should ensure transparent

government procurement and market accessibility not only for domestic suppliers but for foreign suppliers as well. At the same time, it brought about the tasks of strengthening global competitiveness of domestic suppliers and supporting them to enter the global procurement market.

● Digitalization : Digitalization of procurement administration emerged as a very important agenda in the reformation of the public sector.- Especially, in the process of seeking a democratic administration model in the 1990s,

the need arose to implement an efficient and fair procurement administration system for the procurement market that greatly affects national economy,

- Also, the digitalization of procurement administration was an essential task to respond to the environmental changes such as decentralization and globalization of government procurement.

<2nd Stage of Digitalization>

● In 1994, PC and OMR card-based e-Bidding was applied to all the biddings.● Procurement EDI project, where main procurement documents were distributed in

the form of e-Documents (1996-2001)● Following the implementation of an online e-Bidding system in 2001,● A comprehensive national e-Procurement system was implemented in 2002. - Not only for Public Procurement Service but for all the government agencies

making purchases by themselves, all the public procurement in Korea is now conducted online through e-Procurement.

management of foreign aid supplies and procurement of financial revenues (1949 ~ 1960)

Provisional Office of Foreign Supply (1949) ▶ Office of Foreign Procurement (1949) ▶Office of Foreign Supply (1955) ▶ Public Procurement Service (1961)

● Manage foreign aid supplies (1949)● Purchase foreign goods with financial aid assistance

Establishment and development of centralized procurement, supporting economic development (1961 ~ 1992)

● Manage foreign aid supplies, purchase foreign goods with financial aid assistance● Domestic procurement, contracts for construction work (1961) and centralized

procurement structure (1962)● Stockpiling management(1967), government goods management(1971), provision

of stored goods & quality management (1976)

Globalization, Decentralization, and Digitalization of procurement administration (1993 ~ )

● Joining WTO Government Procurement Agreement(1994), Opening the government procurement market(1997)

● Launch of e-Bidding (1994) and procurement EDI system(1997)● Autonomy of local government (1995), decentralized procurement of local governing

bodies (2010)● Transition to e-Procurement by establishing a comprehensive national

e-Procurement system, KONEPS (2002)● Introduction of MAS contracts(framework contracts), Launch of KONEPS online

shopping mall (2006)

(table 1. transition of Korean Government Procurement)


Procurement Policies and Systems




Public Procurement Service (PPS)

[ Vision & Mission ]

(Fig. 1 Vision, mission & main Services of PPS)

Changes in Procurement

Administration Environment and

Innovation of Government

Procurement

Changes in Procurement Environment● Autonomous management with decentralization

- Administrative functions and authority began to be transferred to local regions and decentralized as the local government heads initiated local self-government in 1995.⇒ In the procurement administration sector as well, the issue arose to redefine the

role of PPS so that it could support local governments through centralized procurement without limiting their autonomy.

- The introduction of local self-government was significant not only in political terms of increased autonomy of local governments but in terms of efficient procurement and distribution of resources.⇒ It served as an opportunity to shift the traditional centralized procurement method

by the central procurement agency to a decentralized procurement method based on local autonomy in an attempt to pursue efficient procurement and distribution of resources autonomously required and determined for the local issues faced by each local government.





Maximizing budget usage and guaranteeing customer satisfaction through efficient acquisition,

supply and management of government resources

To become a world-class professional procurement agency to procure and management material resources

for the public sector

motto

vision

① Provide the best value service to customers② Save national budget③ Contribute to developing the national economy through

transparent and efficient procurement and management of resources of resources necessary public administration

mission

Goods & Property management

•Goods(12M items, 13B USD)•Property(794B USD, 24.5%)

E-Procurement System

• Centralized Procurement system• Korea ON-line E-Procurement

System

Procurement Service•Goods Procurement(17B USD)•Service Contract(4B USD)• Construction Contract

(9.7B USD)•Construction Management

Stockpile management• Nonferrous Metal(6) ,

Rare Metal(9)• Reserved(226M USD)

Released (205M USD) → Stability of Price and Supply

Public Procurement

Service

[ Main services ]

● Procuring for Korean public organizations- In 2015, Public Procurement Service purchased goods worth 17 billion dollars, service

worth 4 billion dollars, and construction works worth 10 billion dollars.- PPS also acted as an agent taking care of various processes of construction works

such as construction management and cost review.● Government Stockpiling

- To ensure short- and long-term supply of goods and price stabilization, PPS directly purchases and stockpiles necessities and raw materials. PPS also manages related businesses such as transportation, manipulation, storage, and supply.

- Currently, PPS is focusing its efforts on stockpiling raw materials and its stockpiling projects involve 6 types of nonferrous metals and 9 types of rare metals.⇒ In 2015, its stockpiling and supply amount reached 200 million dollars, respectively.

● Management of government goods and nation-owned properties- PPS is in charge of managing approximately 13 million items of national goods owned

by 50 Korean central government offices and also takes charge of managing real estate assets owned by the nation.

● Operation of KONEPS- KONEPS is a comprehensive e-Procurement platform not only for centralized procurement

but also for 50 thousand public agencies (national agencies, local governments, national public organizations, etc.) and 340 thousand suppliers,


● Realizing customer-oriented administration- As the central agency for government procurement administration, Public Procurement

Service manages a large portion of national fiscal spending involving clients such as purchasing agencies and suppliers.⇒ Therefore, PPS gave various efforts to realize efficient customer-oriented

administration in response to the emergence of e-Government and the trends of democratization of the civil society, economic autonomy, and open administrative service.

- To realize customer-oriented procurement administration, most of all, it was necessary to take into account each purchasing agency’s satisfaction in relation to securing quality procurement items, a wider range of choices, etc.⇒ Until now, procurement administration had problems such as price-based

procurement for each purchasing agency, limited diversity and range of choices, slow processing of contract and supply, and insufficient post-contract management service.

- Since PPS services, which included provision of accurate and various information of the goods to be procured and public construction works, post-management, etc., were directly related to efficiency management of national finance, evaluation of each purchasing agency’s satisfaction level was very important.⇒ PPS needed to present objective and clear bidding contract criteria to ensure

suppliers’ competitive supply and the accuracy of evaluation criteria and appropriate comparative evaluation were required not only to ensure fair competition between the participants but to ensure transparency.

⇒ Ensuring fair competition between suppliers helped not only to reduce unnecessary costs but improve the quality of goods and public construction works.

● Support for decentralized procurement- Public Procurement Service started providing its centralized procurement services,

such as e-Bidding, e-Contract, and e-Guarantee, online through its procurement EDI4) project in 1996.⇒ However, unlike computerized centralized procurement, IT technology was still

unable to be applied to each purchasing agency’s decentralized procurement and was based on paper administration.

- By converting the e-Procurement knowhow gained from centralized procurement into an online environment, all the agencies in need of public procurement were able to use e-Procurement.⇒ It was possible to share the technology and knowhow of increasing efficiency and

transparency of procurement, which were the advantages of centralized procurement. ⇒ Local agencies became possible to receive excellent quality procurement services

by selecting suppliers from across the nation without being limited to the region they belonged to.

4) EDI : Electronic Data Interchange

Changes in Procurement Administration Environment

and Innovation of Government Procurement



● Globalization with open government procurement market- As the Korean government procurement market opened in 1997, the need arose to

ensure transparency in procurement administration and fair competition.⇒ Led by the multilateral trading system and regional trade agreement, there was an

increasing demand for the opening of the procurement market in each nation.⇒ Since government procurement is a major agenda in FTAs, which are increasingly

spreading around the world, the opening of the government procurement market is expected to expand steadily.

• The major assignment is to standardize and liberalize the government procurement market and make the legislative and administrative procedures more transparent, thereby defining nondiscriminatory acts of government procurement.

● Customer-oriented procurement service based on growth of IT industry and demand for innovation - One of the core factors that caused a shift in the paradigm of procurement administration

was the increased possibility of e-Procurement in the digitalization era.⇒ The growth of the IT industry and the common use of the Internet expanded the

cyberspace, presenting each country with an urgent need to realize e-Government.- Along with the trend of openness and decentralization, the procurement needs of

public agencies became more diverse and advanced, leading to the demand for innovation toward a customer-oriented procurement service.⇒ In particular, as administrative reformation emerged as a new paradigm, innovation

for customer-oriented procurement service became more important and the redesigning and applying IT technology to procurement emerged as the most powerful means to realize such innovation.

role of Digitalization in Innovating Procurement Administration● Ensuring of transparency and fairness

- Unlike private procurement, public procurement pursues not only rational values focusing on the consequential aspects of budget execution, such as efficiency and economy, but also moral values focusing on the process itself, such as transparency and fairness.

- The traditional face-to-face method of procurement administration between public officials and suppliers was mistrusted by citizens mainly due to the lack of bidding information, nondisclosure of the bidding process and result, etc., and as a result, contained ample possibilities of corruption.⇒ e-Procurement utilizing information technology was an opportunity and could play

the role of securing innovative means to ensure transparency and fairness in that it can minimize face-to-face contact in the process of procurement administration and guarantee opportunities of fair access to interested participants.


Transition to e-Procurement

System: Implementation of

KONEPS

Background

[ Stable foundation for e-Procurement ]● Large procuring agencies such as Public Procurement Service, Defense Logistics

Agency, and Korea Electric Power Corporation had established internal e-procurement system from the early stages. * As of 2001, public procurement in Korea accounted for 11% of its GDP of 622 billion dollars,

which was 67 billion dollars, so it had a great potential ripple effect on the national economy

overall.

● Public Procurement Service established the e-Procurement Master Plan and procurement EDI/EC system in 1996. The Ministry of National Defense and Korea Electric Power Corporation also took actions such as the automation of their internal procurement information management and other work processes, the partial exchange of e-Documents with other companies, etc.

[Need for an integrated window for suppliers]● The operation of an e-Procurement system by some public agencies was helpful to

suppliers to some extent, but created great inconveniences due to the absence of a single window for public procurement.

Decentralized Procurement Centralized Procurement

• Favorable for purchases that exactly meet the needs of a local agency

• Favorable for purchasing procedures that require urgency

• Possible to promote the growth of locally based small businesses

• Low purchasing costs (economies of scale)

• Easy to standardize product specifications

• Professionalism by division of procurement duties

• Possible to select from suppliers across the nation

• Minimize waste of time and money due to overlapping administrative organizations and processes

(table 2. merits of Decentralized Procurement and centralized Procurement)

- At the time, there was no single window available for suppliers through which they could get information on the procurement needs of all public agencies including the central government departments, local governments and public enterprises. Nor there was information sharing between public agencies.

- Suppliers had to individually check tender information announced by each public agency and get issued and submit the same registration documents for each bid participation.

● Most of public procurement was mainly conducted through paperwork and face-to-face contacts, which was likely to involve corruption between public officials and suppliers.

[ Core tasks for implementing e-Government ]● To resolve the problems with the existing procurement system, a decision was made to

carry out the comprehensive national e-Procurement (G2B5)) system implementation project.- After the G2B system implementation project was selected as one of the 11 core tasks

for e-Government by the Special Committee for e-Government, joint government efforts to implement a pan-governmental system commenced.

Goals and Strategies

[ Implementation goals ]● (Strengthened transparency) To eliminate possibilities of corruption due to face-to-face

contact, disclose each bidding process to the general public on a real time basis, and strengthen transparency and trust in public procurement.

● (Efficient procurement) To minimize the need for personal visits by suppliers through online processing and enhance the administrative efficiency of procuring agencies through automated processing.

● (Government budget saving) By implementing an e-Procurement system that public agencies can also use: ① costs are saved from enhanced efficiency of procurement administration; ② budget required for each public agency to implement their own procurement system can be saved; and ③ costs required to collect and manage procurement contents can be saved by sharing contents required for procurement.

5) Government to Business: government-to-business e-Commerce

Transition to e-Procurement System : Implementation of KONEPS




(Fig 2. Goals of KoNePS implementation)

[ Implementation strategies – three basic directions to achieve goals ]● (Provision of standardized public procurement processes) 50 thousand public agencies

can jointly use the standardized procurement processes through the KONEPS system.- It is possible to prevent in advance procurement public officials from making arbitrary

interpretations of complicated contract-related provisions and to provide predictable procurement services.

● (Single window) For integrated provision of tender specifications, bidding notices, and contract information for all bids- Also, it is possible to disclose to the public in real time each bidding process from

bidding notice to evaluation and selection of the successful bidder.⇒ Suppliers do not need to check every notice announced by each public agency, but

simply see the comprehensive information on KONEPS and participate in any ongoing public biddings in Korea.

● (One-stop processing of procurement processes) KONEPS significantly enhanced the administrative efficiency of procuring agencies and suppliers’ convenience through linkage between various procurement data and automated processing of the data without requiring to submit any paper documents.



- Once documents are submitted, they can be reused by other agencies and for other biddings, so suppliers do not need to get reissued the same documents every time. With the supplier’s consent, online confirmation can be made through the linkage between the related agency systems.

Single Window

One-stop Service

Standardization of Procurement

(Fig. 3 Directions for KoNePS implementation)

Establishing KONEPS Implementation Plan● Establishment of an innovation plan for activating G2B (Aug.-Dec. 2001)6): establishment

of Information Strategy Planning (ISP) for business process re-engineering (BPR) and a single-window system for procurement.- Determination of the entire project scope of the implementation of a comprehensive

national e-Procurement system and the conceptual architecture of e-Procurement.- Presentation of how each stage will improve and look like, including the scope of each

stage of project, schedule, implementation system and plan, redefinition of the

6) Aug.-Dec. 2001 (5 months) The above project cost 1.25 million dollars and was carried out by an IT company and a specialized consulting company

transparency· Decrease

face-to-face contract· Provide real-time

information

efficiency· Electronic and

automatic process of entire

procurement

Saving budet· Commonage

system for public enterprise


procurement function of the public agencies and establishment of a plan to manage any resulting changes and a single window for procurement, etc.

- Includes role assignments and cooperation plans between government departments and between public and private sector for implementing G2B, G2B system vitalization plan, analysis of the ripple effect from using the G2B system, economic efficiency of e-Procurement for the public and private sector, etc.

Implementation of KONEPS● As the overall control tower, the Special Presidential Committee for e-Government,

played the role of coordinating different opinions between departments and promoting cooperation between them.- Discussion of system development involved 10 government agencies, including the

Ministry of Strategy and Finance, that formed a Supporting Committee for e-Procurement, where they discussed institutional challenges, and related 54 organizations which constituted the working group for each field.

Project Overseer

Special Committee for e-Government

Supporting Committee for e-Procurement

Cross-governmental Advisory Committee

Project Working Group

Director General of Government Goods and Information Management, PPS

Project Support Group

PPS Officials in each field

Project Implementation Group

Development TeamStandardization Team

Infra Team Etc.

reviewer Group

Public InstitutionsPrivate Businesses

Relevant Authorities

(Fig. 4 organization chart for KoNePS implementation)



● (Main areas of project implementation) The KONEPS implementation project was carried out for 10 months from March to December 2002, and the main areas of project comprehensively included infrastructure implementation, program development, standardization, linkage between agencies, law and system modification, etc.

Construction CALSThe Ministry of Strategy & Finance

Guarantee Agencies

Public Authorized Agencies

G4C

Korean Financial Telecommunications

and Clearings Institute

G2BPortal

e-Procurement SystemBuyers e-Procurement ASP

Suppliers e-Procurement ASPMAS contact management system

Item classification

system

Integrated publication

User management

e-ducument excahnge & linkage system

e-Guarantee

Past Performance & Engine

managemente-Payment

Catalog system

KONEPS

linkage

G2BManagement

Agency

Public Agencies

Suppliers

Associations

linkageuse

(Fig. 5 conceptual Diagram for the early Stage of KoNePS Service)

- (Infrastructure implementation) Infrastructure implementation involves the creation of a computerized environment based on which KONEPS is operated. This area includes HW, SW, network configuration, security network for bidding security, and a call center system for customer support.⇒ A total of USD 12.4 million was invested in HW (USD 7.5 million) and SW (USD 4.9

million) and the duplicated or triplicated parallel structure from the DB server to the network enables normal procurement service even when faced with errors in some of the equipment.

- (Program development) Consists of 10 unit services including a portal serving as the framework to overall services, user management for buyer and supplier registration and bidding participation management, goods catalog system for managing the list of goods to be purchased, e-Procurement processing system for processing procurement, etc.⇒ The e-Procurement processing system provides service for each work stage so that

all the procurement processes from procurement request, bidding, contract to payment involving public agencies and suppliers can be handled within the system.


KONEPS System

Service for Public Agencies

Service for Suppliers

Service for Operating Agency

Portal System

- Provide integrated information

- User community- Online education- �Notifications for

operator and public agencies

- �Provide integrated information

- �User community- �Online education

- �Counseling service management

- �Survey management

Integrated Notice

- �Bidding notice registration management

- �Search integrated notices

- �Bid opening management

- �Search integrated notices

- �Check bid opening result

- �Check integrated contract information

- �Integrated notice classification management

user registration management

- �Request for public agency, user registration

- �Search suppliers- �Agency user authority

management- �Ineligible supplier

registration

- �Request for bidding participant registration and alteration

- �User, bidding agent registration

- �Public agency, suppliers registration management

- �User authority management

e-Procurement Processing

- �Procurement request- �e-Bidding and

negotiated contract- �Contract management

- �Goods demand management → ordering management

- �Conclusion of joint supply agreement, bidding, Request for evaluation

- �Unit price contract management

- �Procurement statistics- �Service status

management

e-Guarantee- �Request for

e-Guarantee (bidding, contract, payment, defect)

- �Submit e-Guarantee - �Guarantee agency management

Goods list- �cataloging process- �Assignment of

classification and identification number

- �Request for cataloging- �Search list

- �Classification system management

- �Request and processing status management

Catalog- �Search cataloged

products- �Shopping basket, order

- �Product detailed information registration

- �Cataloged products registration

e-Payment- �Inspection- �Receive request for

payment- �Request for inspection- �Request for payment

- �Determine commission- �Issue notice

management of Documents

Subject to Examination

- �Check suppliers’ performance

- Check information of technical experts

- Check registered Information

- Request for update of registered Information

- Suppliers’ performance information management

- Information update processing

(table 3. unit tasks for the early Stage of KoNePS)

- (System linkage) Linkage with procurement-related systems is one of the key factors that can significantly enhance the effects of e-Procurement by KONEPS.⇒ Without the need for suppliers to get issued and submit any required certificates,

KONEPS obtains the required digitalized procurement information by linking itself with the related organizations.

⇒ In the early stage of implementation, the related systems from about 60 organizations became linked with KONEPS and their various eligibility data required for procurement tasks became directly connected with KONEPS.

⇒ For decision making required for each process of procurement, the procurement documents created by KONEPS became linked in a standardized method with the approval systems operated by each of the related organizations.

Classification linked Organizations linked InformationNational finance and accounting

systemMinistry of Strategy and Finance

- Transmit and receive information related to payment

G4C Ministry of the Interior

- Business registration certification, national tax clearance certification, local tax clearance certification

Public agencies that own a separate

procurement system

8 Public agencies including the Ministry of National Defense

- Receive bidding notice information

Transmit new and changed supplier information

Associations 10 Public agencies including Construction Association of Korea

- Receive technical experts information

- Receive information on suppliers’ performance and business management

Payment gateway

Korea Financial Telecommunications and Clearings Institute

- Receive bidding commission payment information

- Transmit bank account information

- Receive bank transfer payment information

Guarantee9 Guarantee agencies including Seoul Guarantee Insurance

- Receive a bidding guarantee- Receive an advance payment

guarantee- Receive a contract guarantee- Receive a defect warranty

Certification6 certificate authorities including National Computerization Agency

- Receive certificate information

e-Approval system

Approval systems at the organizations involved with KONEPS

- Documents subject to approval

(table 4. linked organizations and information in the early Stage of KoNePS)




- (Standardization and DB establishment) To utilize the e-Procurement infrastructure, which had been mainly used for centralized procurement by Public Procurement Service but now jointly available for all the public agencies, there was a need for standardization and, accordingly, integration and update of the existing DB. To do this, it was necessary to handle mainly three areas: user information integration; catalog information standardization; and procurement document standardization.⇒ User information integration: code and item standardization was conducted so that

public agencies could jointly use the buyer and supplier information prior used only by Public Procurement Service.

⇒ Product information standardization: to standardize the procurement and purchase products, a four-level classification system and United Nations Standard Products and Services Code (UNSPSC7)), an international classification system for procurement items based on a unique identification system, were introduced.

* To manage product information, a separate product catalog management system was implemented, enabling integration management of a total of 480 thousand product items including 350 thousand product items from Public Procurement Service and the rest from other public agencies.

⇒ Procurement document standardization: the e-Document format was standardized based on ebXML, the international standard for e-Commerce, and the items and attributes of the documents used for each process of procurement were defined (the procurement e-Documents standardized in the early stage of implementation included 169 types for 9 work processes).

Classification of Work Processes Number of Types of e-Documents Developed

user management 8 types including the application form for competitive bidding participant registration (alteration)

Product management 18 types including the product listing request form

Product Purchase 38 types including the product purchase request form

Facility Construction 34 types including the construction contract request form

7) An abbreviation of the United Nations Standard Products and Services Code, which is a product and service classification code for e-Commerce developed by United Nations Development Program (UNDP), the UN’s global development network. It is the world’s most widely used e-Commerce product classification system for all the industries (source: Naver Encyclopedia).

Service 16 types including the service contract request form

Applied in Common to Facility Construction/

Service

20 types including the request form for the release of retention money

Common Documents 20 types including integrated bidding notice

linkage with centralized

procurement10 types including the withdrawal and payment receipt

Documents subject to approval

5 types including the product eligibility examination result report

Total 169 Types

(table 5. Status of e-Documents Developed in the early Stage of KoNePS

Success Factors ● (Amendment of the laws and institution related to procurement) To ensure smooth

operation of e-Procurement, related laws and institutions needed to be amended.- In the early stages of KONEPS implementation, most government agencies’

procurement administration was paper-based, so there was a lack of institutional basis for electronic processing.⇒ A specialized law and institution amendment team consisting of experts was

formed to review and amend any regulations relating to the implementation of the system.

- Based on the G2B innovation plan, it turned out that regarding the effect of e-Documents, Electronic Transaction Act and Digital Signature Act could be invoked.

- However, amendments were necessary for Enforcement Decree of State Contract Act, Enforcement Decree of the Government Procurement Act, Enforcement Rule of State Contract Act, and Enforcement Decree of the Local Finance Act.

Success Factors and Benefits of

KONEPS




Name of law Description of Amendments Date of Amendment

Enforcement Decree of State

Contract Act

- Implemented a single window for procurement by making it obligatory (Article 33) to publish bidding notices not in the official gazette or newspaper but through the designated information processing system

- By strengthening the legal status of e-Procurement (Article 39), it became legally possible to allow only e-Procurement excluding offline bidding

- It became legally obligatory (Article 76) to publish and deliver a notice of sanctions to ineligible suppliers only through the designated information processing system, enabling systematic supplier information management.

- It became legally obligatory (Article 94) for suppliers to report all their past performance as contractor through the designated information processing system.

- A legal basis (Article 96) for using the designated information processing system was prepared.

Amended: July 30Effective: Sept. 30

Enforcement Decree of the Government Procurement

Act

- The introduction of the MAS contract system where higher quality and more reasonable price are ensured through competition by allowing buyers to select from multiple contracted suppliers (Article 7)

- The purchasing agencies should pay for the goods they procure by themselves, but upon request, due to budget reasons and such, PPS can pay instead (Article 12).

Amended: July 30Effective: Sept. 30

Enforcement rule of State Contract Act

- Prepared a legal basis allowing all the public agencies to use supplier information available on G2B (Article 15).

Amended: Aug. 24Effective: Sept. 30

Enforcement Decree of the local Finance

Act

- It became legally obligatory to publish all the regional-limited bidding notices through the designated information processing system (Article 70).

- It became legally obligatory (Article 76) to publish and deliver a notice of sanctions to ineligible suppliers only through the designated information processing system, enabling systematic supplier information management.

Amended and Effective: Nov. 29

(table 6. amendment of laws related to G2B)

8) An underlying technology that enables perfect encryption by making a sender and a receiver use a different public and private key for certification and through non-repudiation, etc.

Success Factors and Benefits of KONEPS


● (Mutually compatible systems available through open technical standards) The underlying technologies for the G2B system include PKI8)-based electronic signature and document security, ebXML e-Document standards, SOAP-based document distribution, and Java-based web service implementation technologies.- Through these technologies, a foundation was laid for not only ensuring stable online

service for e-Commerce which can be very sensitive, but also facilitating document and information exchange with any systems in operation at the time by reflecting the technology trend.

- Especially, to ensure stable e-Transaction, certified e-Signature was applied to all the work processes and an electronic document-based end-to-end security system was established by allowing e-Documents created and transmitted from a sender’s PC to be accepted on a receiver’s PC.

● (Establishment of an inter-agency cooperation system through a pan-governmental implementation system) The G2B system was a project that required cooperation with the related departments on such matters as the amendment of the related laws and plans to make the system widely used.- Two great challenges emerged. One was consulting with a large number of related

agencies because implementing the system required the over 60 external systems to be linked, and the other was effectively identifying each agency’s user requirements and reflecting them in the system.

- To overcome these difficulties, in the G2B innovation plan establishment stage, a Working Group for Activating G2B was organized as a standing consultative body mainly consisting of the Ministry of Planning and Budget.⇒ The direction of system implementation was finalized after collecting ample

opinions from related government departments, Construction Association of Korea, Korean Standards Association, etc.

- In order to promote active participation of public agencies and close cooperation with the private sector, various opinions were collected from related government departments and nongovernmental experts by holding commencement, interim, and final briefing sessions, two workshops, public hearings, three advisory committee meetings, etc.

- In addition, in the beginning of system implementation, led by Public Procurement Service, which holds experience in implementing and operating an e-Procurement system, a joint implementation platform consisting of the Supporting Committee for e-Procurement, Reviewer Group, etc. was established and coordinated various opinions from the related organizations.


⇒ In principle, individual consultations are required with each entity, but if there were any differing opinions or pending issues, prompt decision making was pushed by the Supporting Committee for e-Procurement and Special Committee for e-Government.

- The Supporting Committee for e-Procurement and Reviewer Group which being comprised of about 60 organizations also served as the windows for collecting user opinions and especially, Reviewer Group which mainly consisted of the expected purchasing agencies played a leading role in work analysis and system verification.

● (PPS that played a leading role) Another key success factor of KONEPS is the role of Public Procurement Service, the central procurement agency.- Public Procurement Service had already partially realized the digitalization of

government procurement through the procurement EDI project before KONEPS was implemented.

- Starting with PC-based computerized bidding, PPS initiated its e-Bidding service in 2001, followed by e-Guarantee and e-Contract service and online order service.

- Such existing e-Procurement infrastructure was integrated into KONEPS and also the network of user entities and suppliers were successfully transferred to KONEPS, thus newly creating a large-scale government procurement network.⇒ Utilizing PPS’s existing infrastructure and the knowhow obtained from implementing

its existing e-Procurement system, the G2B development period was shortened, and user demand in the early stage of the system was stably secured by absorbing 24,000 public agencies and 65,000 suppliers from PPS’s existing e-Procurement system.

- Public Procurement Service played the leading role in the system design, implementation, and operation and activation stages.⇒ PPS played the role of the leading agency in activating KONEPS by enabling, from

the beginning stage of KONEPS, all the biddings, contracts, and payments to be carried out online on KONEPS.

Key Benefits ● (Growth into the world’s largest government e-Marketplace) Through such efforts,

starting from the commencement of the service in Oct. 2002, to developing various contents, amending laws, etc., KONEPS quickly became widely used as a single window.- (Transaction amount) As of the end of Dec. 2015, KONEPS accounts for 67% (USD

74.56 billion) of the Korean public procurement market (USD 111.9 billion)- (Supplier users) 50 thousand user entities and 320 thousand suppliers are registered

with KONEPS to use procurement services.

⇒ By enabling 5 times more suppliers to participate in government procurement than before KONEPS was implemented (65 thousand suppliers), small and medium enterprises(SMEs) were given more opportunities to participate in public procurement.

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

350000

300000

250000

150000

50000

0

200000

100000650,000

50,366

343,512

(Fig. 6 trend of increasing Number of KoNePS users)

- (e-Bidding) As of 2015, 247 thousand e-Biddings were held and 24.7 million bids were made, recording an average of about 100 suppliers participating per bidding.

- (e-Contract) Through KONEPS, not only biddings are held, but also 710 thousand contracts and 830 thousand payments are made electronically.⇒ The reason for a relatively high rate of contracts and payments made compared to

the number of bids made is not only competitive bids but also negotiated contracts are processed through KONEPS.

- (Shopping mall) KONEPS provides a comprehensive online shopping mall, which allows public entities to purchase products they frequently use by simply ordering them online. Currently, the shopping mall has a list of about 400 thousand registered product items previously contracted, so all user entities can simply order them. The number of annual transactions made on the shopping mall amounts to 800 thousand.



No. of suppliers No. of public entities


(Unit: Million, Billion USD)

Type of Organization

Centralized Procurement

Decentralized Procurement Total

Amount Percentage Amount Percentage Amount Percentage

National agencies 907.7M 29.5% 307M 9.6% 1.21B 19.3%

local governments 1.17B 36.0% 1.63B 51.1% 2.74B 43.7%

Educational institutions 258.8M 8.4% 393M 12.3% 652M 10.4%

Public enterprises 226.2M 7.4% 90M 2.8% 317M 5.0%

Quasi-governmental organizations 233.9M 7.6% 357M 11.2% 591M 9.4%

Other public organizations 97.8M 3.2% 70M 2.2% 168M 2.7%

local public enterprises 109M 3.6% 206M 6.4% 316M 5.0%

Other organizations 134.8M 4.4% 141M 4.4% 276M 4.4%

Total 3.07B 100.0% 3.25B 100.0% 6.28B 100.0%

(table 7. 2015 KoNePS usage Status by type of organization)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

711,461700,000

800,000

900,000

600,000

500,000

300,000

100,000

0

400,000

200,000

827,753

246,960

Num. of Bid Num. of contract Num. of Payment

(Fig. 7 the trend of increasing Number of Bids, contracts and Payments after implementing KoNePS)

● (Significantly improved efficiency of government procurement) The greatest achievement of implementing KONEPS is the enhanced efficiency of procurement by enabling the whole process to be digitalized and reducing time and money spent by suppliers and public entities.- According to a study conducted in 2008 by Hanyang University in Korea, KONEPS’s

electronic procurement services save about 8 billion dollars annually.⇒ Among the 8 billion dollars, the 6.6 billion dollars was the amount saved from the

private sector and the remaining 1.4 billion dollars from the public sector. The saving effect from the private sector was mainly due to a reduction in time and money spent through personal visits, while the saving effect from the public sector was owing to a reduction in administrative costs from enhanced work efficiency, the reduced amount of paper documents used, etc.

(Unit: Million USD)

Classification National agencies

local governments

Public enterprises PPS Subtotal

Public / Private Sector

Public sector 146 129 196 69 1,440

Private sector 975 4,807 815 13 6,610

Subtotal 1,121 5,836 1,011 82 8,050

Procurement Category

Goods 155 963 190 57 1,365

Facility / Service 967 4,874 822 25 6,688

Subtotal 1,121 58,36 1,011 82 8.050

(table 8. Saving effect of KoNePS by Public/Private Sector and Procurement category)

- In the past, suppliers had to apply for a bid published by a public entity and then later visit the entity to submit their bids. Now, however, they are able to check tender notices on the KONEPS system and simply electronically submit their bids in time, which will not take more than a minute.⇒ In the case of public entities, it used to take more than 30 hours to review bidding

documents to select a winning bidder. However, using KONEPS, the same process takes them less than 2 hours.

- Before KONEPS, suppliers had to spend 100 to 300 dollars annually to obtain their credit rating certificates and additional costs had to be made such as issuance fees required documents for bid participation and transportation costs when visiting related entities, etc.




⇒ However, with KONEPS in full operation, both public entities and suppliers can benefit from accessing the system anytime, anywhere to conveniently check supplier information or be registered as a bidding participant, saving a large amount of unnecessary costs.

Class. Before KONEPS After KONEPS

Supplier registration

- Suppliers applied for every bid they wish to participate in.

- Once suppliers are registered with KONEPS, they can immediately participate in every bid.

Tendernotice

- Public agencies published a tender notice in the official gazette or newspaper

- Public entities publish all their tender notices on the KONEPS portal.

- Suppliers had to check public agencies one by one to obtain procurement information including tender notice, etc.

- They can get all the necessary bidding information in one place at one time on KONEPS.

Bid submission

- Suppliers had to personally visit the agency to submit their bidding application or send it by mail, after which they visited the agency later for bid opening.

- They can submit an electronic bidding application and check the result of bid opening online at home or office.

Contract request

- Contract requests were made through paperwork.

- Contract requests can be made online.

Contract management

- Contracts were written by attaching the required documents and putting a seal upon them.

- Contracts can be written and altered online using e-Signature.

Payment - Inspection and payment requests were made manually.

- Inspection and payment requests are made online.

(table 9. Before and after KoNePS)

- One of the most important factors that made it possible to enhance the efficiency of KONEPS e-Procurement services was the linkage and sharing of procurement related data.⇒ KONEPS provides online linkage with all the resources required for every process

of procurement and shares its procurement information with 188 government organizations and suppliers.

Standard linkage System

certificate authorities

8

Supplier

58

Bank

6

Government / Public org

34

other Bidding System

23

credit certificate authorities

10

Product Quality

certificate authorities

15

related associations

12

Surety company

22

cred

it in

fo.

tax calculation Sheet,

Billing Statement,

order Sheet

Quality certified info.

catalog info.

cert

ified

info

.

cont

ract

info

.

Pre-

perf

orm

ed

res

ultBid, contract in

foGuaran

tee

contract

invitation

tender

catalog info.Housing Bond,

Development Bond,

Network loan

Bid, contract info

registration info

(Fig. 8 organizations linked with KoNePS)

- Despite the reduction in the number of employees at PPS, PPS achieved enhanced procurement efficiency as the number of purchases made and processed has increased greatly.

total No. of employees No. of contracts and orders Processed

No. of contracts and orders Processed per employee

1,058 950

19972014

220,000912,000

19972014

208960

1997 2014

4.6-fold

(Fig. 9 Number of transactions Processed per employee at PPS)

● (Enhanced government procurement transparency and fairness) All the information including bidding application and results are disclosed in real time, and all the procurement processes are automated, reducing face-to-face contact between public officials and suppliers, thus ensuring more transparent procurement administration.




- All the specifications of public entities are provided in an integrated manner, enabling to compare and identify if any specification contains any description that limits competition in any way, thereby promoting fair bidding competition.

- The fact that the system’s standardized work processes relatively reduced public officials’ discretion also played an important role in increasing transparency.

- With all the information including bidding and its opening results disclosed in real time, the integrity of Public Procurement Service has increased annually, proving that the government procurement process has become much more transparent after implementing KONEPS.⇒ The Korea Independent Commission Against Corruption announced that the

integrity of Public Procurement Service increased by 27.2% from 2002 to 2005.⇒ KONEPS was selected as the best practice of having significantly increased

transparency in procurement through digitalization and was introduced by Transparency International, UN Anti-Corruption Forum, OECD Global Forum on Integrity in Public Procurement, etc.

● (Function of policy support) After establishing itself as an effective means to implement public procurement policies, KONEPS strengthened its function of providing policy support by supporting green procurement, socially disadvantaged businesses, new technologies, environment-friendly suppliers, etc. and creating and promoting related markets as well.- Among all the suppliers registered with KONEPS, 97.2% of them are socially

disadvantaged SMEs whose transaction volume amounts to USD 59 billion, which accounts for 78.7% of the total transaction volume on KONEPS.

Company Type

2013 2014 2015No. of

Companies registered

PercentageNo. of


PercentageNo. of


Percentage

large companies 871 0.33% 919 0.31% 955 0.30%

medium companies 2,047 0.76% 2,127 0.72% 1,294 0.40%

Small companies 259,827 96.96% 284,541 96.97% 311,971 97.19%

Nonprofit corporations 5,218 1.95% 5,831 1.99% 6,763 2.11%

Total 267963 100.00% 293418 100.00% 320983 100.00%

(table 10. Status of KoNePS registration by company type)

(Unit: Million USD)

Company Type

2013 2014 2015

Transaction amount Percentage Transaction

amount Percentage Transactionamount Percentage

large companies 13,042 17.93% 8,621 12.81% 8,405 11.27%

medium companies 6,587 9.05% 5,007 7.44% 4,700 6.30%

Small companies 48,380 66.49% 51,526 76.53% 58,668 78.68%

Nonprofit corporations 4,749 6.53% 2,171 3.22% 2,792 3.74%

Total 72,758 100.00% 67,325 10.00% 74,565 100.00%

(table 11. Status of KoNePS transaction amount by company type)

- In addition, KONEPS monitors in real time the procurement status of local companies and socially disadvantaged businesses such as those owned by females or people with disabilities and, based on their procurement results, gives feedback to the related organizations to help attain their policy goals.

- Regarding its support for new technologies, KONEPS supports products that use a new technology, products that have obtained quality certification, designated products with excellent quality, etc. As for its environment-friendly policies, KONEPS supports recyclable products, products that have obtained high-efficiency energy certification, environment-friendly products, etc. (KONEPS is currently pushing a policy to support social enterprises.)

- According to a survey, the online process of KONEPS itself cuts down on carbon emissions by about 600 thousand tons through the reduction in personal visits and the use of paper documents.⇒ Based on the EU Emissions Trading System (EU ETS), the amount reduced

corresponds to an annual amount of USD 26 million saved and is about 5 times the amount of carbon emitted from LG Chemical Ulsan Plant, the largest chemical factory in Korea.

⇒ According to an analysis of the work processes, bid application (49%) and bid participation (45%) had the greatest carbon reduction effects.




18,144Inspection & payment

17,302Contract & guarantee

288,695registration

27PQ validation

371Eligibility test

268,404

Submit tender

Process reduction amount(unit: ton)

Economic effect (unit: m ton)

registration for bidding 288,695 12

Application for PQ validation 27 0

Submit eligibility test document 371 0

Submit tender document 268,404 11

Contract and submit guarantee 17,302 0.7

Delivery inspection and payment 18,144 0.8

total 592,944 25

(Fig. 10 analysis of carbon reduction effects created by KoNePS, 2009)

International recognition ● The innovations KONEPS achieved in the field of e-Procurement were not only awarded

domestically, but also by the international society as the most advanced e-Procurement system, raising the status of Korean e-Government to a higher level.- KONEPS won the Public Service Award, an award given by the UN to the public agency

that has achieved the greatest innovation in administrative service in the world.⇒ As an award made by the UN Economic and Social Council in an attempt to raise the

level of global public service and citizens’ awareness of public service, Public Procurement Service was given this award for the first time in the Asia-Pacific region, having been recognized its achievements of digitalizing and disclosing all the procurement processes, converting procurement service into customer-oriented and ensuring transparent and fair procurement.

- According to an OECD report on corporate information policy in Korea, ‘no further action is required’ for Korea’s e-Procurement system.

- The UN selected the world’s 23 best practice models of e-Government classified into different categories and KONEPS was selected as a representative best practices of procurement.

- In the 6th UN/CEFACT Forum, a conference on international standards in the field of trade and e-Commerce, a proposed standard reflecting PPS’s e-Bidding procedures was passed.

- Being awarded the Global IT Excellence Award by being selected as the public agency that showed the world’s most innovative example of IT-applied service at 2006 World Congress on Information Technology.

- Under the sponsorship of UN/CEFACT (UN Center for Trade Facilitation and Electronic Business), AFACT Conference biennially selects the best practices of trade facilitation and electronic business classified into 4 categories in the public and private sector in the Asian region and KONESP was given the 2007 e-ASIA Award.⇒ Awards are given for 4 different categories including Trade, Public Sector

e-Business, Private Sector e-Business, and Bridging Digital Divide.- According to the OECD report, The Korean Public Procurement Service: Innovating for

Effectiveness (Feb. 2016), it states, “Korea shows the best practices that can inspire public procurement innovations in other countries.”

- Reform, one of main think tanks based in the United Kingdom, mentioned the procurement system in their country in 2016, saying “Britain should strongly push a conversion into e-Procurement, and recommended that their country’s system be benchmarked from the internationally recognized Korean e-Procurement system.”

● KONEPS has established itself as an internationally recognized brand of e-Procurement system which has so far been exported to 7 countries in the world.- Among the countries that have adopted the e-procurement system based on KONEPS,

Costa Rica’s e-Procurement system (Mer-link) was awarded the grand prize at 2012 South America e-Government Conference.

- As another example, Tunisia was given the Regional Award for Improved Public Service at OGP Global Summit 2015.

Innovative Seamless

Procurement Service

Advancement of KONEPS● Even after implementing KONEPS, which integrates main government procurement

processes with various related networks, Public Procurement Service has given continuous efforts to expand e-Procurement services.- PPS gradually expanded its system so that all the detailed procurement work can be

processed online by adding the online technology assessment system, online eligibility examination system, construction cost calculation system, etc.




2002

2004

2006

2007

2008

20102012

20132014

2015

KONEPS launched

Integrated Shopping mall

Crm based service enhancement

On-line Technology assessment system

Construction cost management system

On-line evaluation system

Biometrics based bidding

Next-Generation KONEPS launched

mobile KONEPS

Subcontract management system

Statistics system for public procuremen

IT contract integrated management system

KONEPS private purchaser

(Fig. 11 a Series of System expansions after implementing KoNePS)

● Recently, the achievements of government procurement have also been applied to private bid contracts that influence the general public, some of which include the Subcontract Management System (2013) for subcontract and payment management guaranteeing fair subcontracts and e-Procurement System for Public Housing Management and Nonprofit Organizations (KONEPS for Private Purchaser, 2015).

(Fig. 12 Subcontract management System of KoNePS)

● The public procurement statistics system implemented in 2014 maintains an integrated database by collecting information on not only the contracts made through KONEPS but all contracts made by public agencies in Korea.- The collected information is again analyzed from various different perspectives and

provided for end users in the form of reports. 110 types of various procurement statistical data provided by this system are utilized for making procurement and policy decisions, drawing up and executing budget, etc.

● The Integrated IT Contract Management System, initiated as a 3-year plan in 2014, is a system to manage the entire life cycle of IT procurement including supporting RFI (Request for Information) and RFP (Request for Proposal), allowing suppliers to submit their proposals online, conducting online/offline technology assessment, and project management after contract.

Construction Cost Estimate System

cost management Portal

KoNePS Single logine

External System

KONEPS

DW

Shopping mall

Catalog Info

user

cost management

material code

cost estimate Specification evaluation contract

Default

common library

user management

System Announcement

Portal management

e-Gov. Standard Framework

Execution Operation Development management Component

Contraction material code management

Labor costMaterial cost

ExpensesQuantity details

Review detailsCreate

contract details

1st phase evaluation

2nd phase evaluation

PPS

Public Agency

Supplier

(Fig. 13 it management System of KoNePS)

Banks

Gov. Finance System

Surety Company

Sub Contractor

Public Agency

main Contractor

Employee

linkage with other systems

user

mobile

Internet

linked Org.Subcontract management System

Statistics of Subcontract

KoNePS(G2B)

agency info. Supplier info. contract info.

linkage

Contract

Agreement

Draft

contract

Payment

Verification

Request

Payment

Issue

Verification

Request

Past-performance certificate

Innovative Seamless Procurement Service



International Cooperation of PPS ● International financial institutions such as the World Bank are recognizing the worldwide

spread of e-Procurement systems like KONEPS to increase public procurement transparency and efficiency in developing countries.- Especially, many countries including developing countries are paying attention to

PPS’s example of innovative procurement administration and positively reviewing the adoption of an e-Procurement system.⇒ PPS started to export its e-Procurement policies based on international recognition

it had gained since 2007.

Costa rica

e-GP System(mer-link, 2010)

vietnam

e-GP System(muasamcong,

2010)

Tunisia

e-GP System(TuNEPS, 2013)

Cameroon

e-GP System(COlEPS, 2016)

rwanda

e-GP System(rONEPS, 2016)

mongolia

e-GP System(mEPS, 2012)

Jordan

e-GP System(JONEPS, 2017)

(Fig. 14 Global KoNePS)

● PPS participated as a member in the Multilateral Meeting on Public Procurement consisting of 6 member states; Korea, U.S., Canada, U.K, Italy, and Chile.- PPS also participated in the OECD-MENA international procurement network, and

jointly conducted a review of the operation direction of the public procurement consultative body and of the procurement system and status in the MENA region with OECD.

● Currently, PPS is cooperating with 25 countries signing 27 MOUs regarding the development of the procurement system and worldwide spread of e-Procurement including U.S., Canada, etc.- PPS conducted feasibility studies for introducing an e-Procurement system in 13

countries around the world starting with Vietnam in 2005. Among them, the KONEPS

model of an e-Procurement system has been implemented in 7 countries9), and is currently in operation.

- By regularly interacting with China on government procurement, PPS is continuously giving efforts to expand cooperation in government procurement, especially through e-Procurement, between Korea and China.

● As of 2016, PPS was visited by 298 foreign public officials from 80 different countries. The visits were made for various purposes such as benchmarking, international conferences, and training.

In particular, PPS hosted the Asia Pacific Public Electronic Procurement Network at the PPS Hall on 10-11 October 2016 where about 90 procurement officials and experts participated from governments and international organizations of the World Bank and ADB. In addition, capacity building courses for procurement officials of Uganda, Mongolia, and Afghanistan were held in the PPS training institute in cooperation with KOICA in 2016.

● With KONEPS providing e-Procurement services, PPS holds a long history of efforts to enhance the efficiency and transparency of public procurement in Korea, and based on these efforts and experiences, PPS will continue its international cooperation and the role to keep on contributing to increase the transparency and efficiency of public procurement in the international society.

9) Vietnam (2010), Costa Rica (2010), Mongolia (2012), Tunisia (2013), Cameroon (2016), Rwanda (2016), Jordan (2017)



Cover design “Korean Public Service! Fly High with the World!”Gold symbolizes wealth, wishing for global sustainable development and prosperityDiagonal motif Korean public service flying high with the world through international cooperation

Government Complex-Daejeon, 189 Cheongsa-ro,

Seo-gu, Daejeon 35208, Republic of Korea

Website : www.pps.go.kr/eng

Contact : +82-70-4056-7470 / [email protected]

Publication Date : Dec. 2016

Planned & Sponsored by ministry of the Interior

Public Procurement Service