E-Procurement Practices in the developed Countries

Abstract:- Procurement of Goods and services is a primary activity for the government or public
sector because it has deep impact on the country economic standing , Competency of the nation ,
Affects the Citizen Welfare , Country Judicial System is connected with the policies of procurement
and many more. Even after this for the E-procurement, this is never found an optimal solution that is
universally applicable. Country e-procurement differ country wise and none of them has proven
Optimal. The aim of this paper is to compare the different e-procurement practices of Developed
country Vs Indian Public sector companies. Country were chosen on the basis of their strong economic
Standpoint and found a optimal solution that can solve the problem of e-procurement. For that we
have chosen six country based in their export and import level like USA , UK , China , Japan , France
and Germany. Based in this we will study the different policies and methods used by the respective
and draw a framework based on that.

First the paper will analyse and compare the country wise comparison of the e-procurement policies
formed by the countries and analysis the merits and de-merits of the policy followed. Later do a deep
rooted analysis and provide a framework that give a list of optimal practices that can be used by the
country to have a optimal E-procurement Practices.

Keywords:- E-procurement , Country wise comparison , Framework and optimal.

Literature Review :- E-procurement is a range of different technologies that can be used or
applied to make the sourcing and ordering process of goods and services at the internal and external
level fully automated. Throught the globe the e-procurement is at an revolutionary stage. Irrespective
of that the e-procurement has some variation while implementing it. It seems that every country or
region try to apply it on the basis of its personal or government needs. The technology is accepted by
major segment of the globe and the trends is towards the development of e-procurement but its still
not fully functional.

E-procurement has different purpose and usage as per the demand and need. For some areas it is
applied for managing the direct production of goods and services by implementing the Enterprise
resource planning(ERP) in the production line. Later on, as the time passes on , In the late 1990’s the
Production start shifting to the in-direct goods production line which was earlier ignored due to the
low volume size. Later as the technology and demand shifted the importance of low volume
transaction increases and dedicated information system and software were developed to streamline
the Indirect material supply of goods. (Alt, 2012). To support this argument Elliot rendy said in this
paper that the purpose of the ERP in the E-procurement synergises the intra-organizational
technologies. It helps the firm to repair and maintain their operation and help them to save some cost
over it. (Bendoly, 2005).To support the input that there is a positive relation between ERP usage and
E-procurement practices. Gioconda and its follow research scholar studies has proven that there is a
relation between the ERP and e-procurement that tends to be positive. (Quesada, 2013)

As on during the last few years there are large number of e-procurement technology has been
introduced and innovated. Mostly concerning the private sector for increasing the productivity. On
this the main objective of the introducing of these techniques is to fulfillment of the indirect goods
procurement process. Nikolaos A Panayiotou has said in his paper that objective of innovation and
development is to identify the potential problematic areas and design new process to implement the
successful and fully operational e-procurement system. The outcome of this system will be enabling a
analytical functional specification to provide an appropriate solution. (P.Tatsiopoulos, 2003)
As the e-procurement is developing and adopting by the major firms in the globe. An article wrote by
William D. Presutti said that the Increasing emphasis on supply chain management and keeping the
company cost efficient is making the company to adopt the e-procurement practices as quick as
possible because of the rising competition. Company who used combination of e-procurement and
internet have a competitive advantage. For this the supplier need to understand the impact of
technology and gain competency in making the business fully adopt the methods of e-procurement.
(D.PresuttiJr., 2003).

Thompson S.H. Teo suggest few factors that affect and involves in the e-procurement services those
are Firms size , involvement and support of the top level management , Perceived values , benefits in
adopting those practices and market influences affect the adopting of e-procurement practices.
(S.H.TeoaSijieLinaKee-hungLaib, 2009).

As the demand for the procurement is growing. It tends to increasing the globally and internalization
is increasing. It is forcing the firms and companies to develop there purchasing department to
completive with the rising competition. (Herbig, 2012). This apply also to the SME companies to
develop their internal management to outgrow the competition and be cost efficient. (Loader, 2011)

Research Methodology :-
In order to understand the requirement and modernisation need for the development of the e-
procurement in the public sector companies. We have to analyse the different methods and policies
used by the other countries for the e-procurement services. In these countries we have observed that
the process and procedure varies from country to country depending on the requirement and
technology advancement like In Germany all the procurement practice are automated and centralised
as per that the rules and regulations are formed but In case of China the procedure is semi-automated
and requirement manual entry system. Hence the procedure and methods varies from country to
country , region to region. In order to understand that where our Indian Public sector companies are
lacking behind. We have to measure and understand the different practices used by the country and
compare it with the Indian companies and find the difference between them. To help to find out where
are we lacking behind and what modernisation we need.

On the basis of them we draw a comparison chart or a framework that gives us comparative analysis
on our current standing. As per the representation we draw a conclusion and give recommendation
for the future decision making.

Data collection :-
 Indian Public sector Practices :- Procurement plays a vital role in economic development of
the country and transparency in the procurement plays a pivot role. Government of India has
spend huge amount of money for making the e-procurement process transparent and
manageable. For that government has formed a committee known as Expenditure
Management commission for e-procurement development. The committee target is to
provide transparency , cost and time saving and reduction of corruption.
For the procurement services government has launch a Central Public Procurement Portal
(https://eprocure.gov.in/eprocure) governed and manage by the NIC. Its is for all kinds of
procurement like goods , services and works. The facilities provided by the central Public
Procurement are :-
 i) Registration of entities and vendors VIA Online :-All the entities including contractors and
suppliers have to enrol through the CPP portal by using the assigned digital signature
certificate.
ii) Tender creation and publishing: Al the procuring entities must create and publish their
tender details online by providing viable information of their tender like Opening and
submission date , Pre-bid meetings , Procurement Nature , value of the project , Fees of
the tender etc in a pdf format.
iii) Submitting and publishing of corrigendum and pre-bid meeting decisions: After
submitting the tender documents , sometimes vender or entities need to modify their
tender documents after giving the bid on the portal for that vendor can alter the data by
using the corrigendum platform.
iv) Online bid submission, resubmission, and withdrawal of bids: The bidders need to submit
the bids of their project online as instructed by the NIC with limitation of number of bids
resubmission before the bid closing date and time with properly signed. After this the
bidder gets the online acknowledgment on the submission of bid.
v) Tender Opening date: A vendor or entity can bid after the opening date of the Bid. This if
applicable for the register vendor and entities. After this any change or activity done by
the entity will be timely stamped and register on the server. After this bid will be
evaluation and goes for further processing.
vi) Publishing technical and financial evaluation: After submitting the bids , bidder have a
choice for evaluation either financial and technical evaluation as per the bidder request.
Committees downloads the submitted documents and evaluate the bids. Based on the
evaluation the tender is chosen. A comparative chart is made that can be seen on CPP
portal.
vii) Award of the contract: After the long and detail evaluation the bidder is selected and
officially notified on the CPP portal and the letter is issued. The letter called Award of
Contract.

 United Kingdom Practices:- Procurement in UK is unique and structural to increase the

transparency and reduce the corruption. UK approximately spend 316 Billion Euros on the
procurement system making it the most valuable system in the globe. UK use high restricted
procedure to make it an unbeatable format. Following is the structure of the United Kingdom
Methods :-
i) Governing Body :- Procurement is governed by two sets of laws public contracts
regulations 2006 and Public regulation Act 2015. These acts are designed to make the
public procurement for the small business easily and feasible.
ii) Governing Institutions :- Efficiency and reform group was developed to improve efficiency
in the system in the primary procurement. For the specified procurement it belongs to the
Scottish procurement and commercial Directorate.
iii) Structure :- ERG and CCS groups share responsibility for building the capacity of
procurement practices in UK. While CCS is for providing skilful training on the other hand
ERG is for providing the policies , sampling and verification of the tender documents.
iv) System used :- ERG publishes standardised and procedural templates for procurement
procedure of the tender. It includes goods and service contracts. Afterwards all the
process is going through the LEAN management approach in which a time lag of 95 days
is set from opening bid to closing bid.
v) E-procurement :- More than 50% contact is submitted throught the Online media under
the evaluation of the ERG. The process is fully automatic no chances of data leak and inner
 department communicating. The procurement portal includes a database of the contract
and it allow the potential bidders to prepare for the future procurement. It also used a
spend analysis tool in which regularly information on procurement organised by the
suppliers are updated. As per the ERG evaluation the Contract is awarded.

 United States of America Practices :-The US procurement Business is the largest market in the
world. Procurement laws and regulations are both complex and mature. It is governing by the
federal procurement law which is independent form of governing body exclusive of other
legislation and government entities. Following are the practices followed in the US
procurement market :-
(1) Access to the procurement market :- There are three barriers by which a firm cannot
easily enter the market. They are transparency in the system , trade agreements and
Invisible barriers that makes the firms to enter the market.
(2) Procedure to enter the market :- A experienced and subcontracting firms can only
enter the market. Than they have to Join an Open identified delivery contract that is
called IDIQ contact than they move to the more specified contracts.
(3) Transparency :- All the identified opportunities and awards have to be submitted and
publish on the “Governmentwide Point of Entry” or at the www.fedizopps.gov.
Related documents like justification for all open and end competition must also be
submitted on the site electronically .
(4) Qualification standard :- A firm or a contractor who wants to bid on the tender must
be qualified by the procurement community. All the details and information must be
register on the www.sam.gov.
(5) Publishing of Awarded contracts :- All the pending and approved purchases through
IDIQ framework must be publish on the Federal site. Also, the first tier contract that
are being approved and submitted must be register on the Federal Site.
(6) International Trade agreement :-Vendors and firms who bid on the international
Tenders must be pre-approved by the Federal Procurement law and Buy America Act.
If the Vendor fails to qualify for any of the above mention law is not approved for
Bidding.
 China Practices :- China one of the leading countries in terms of manufacturing of goods and
services on the globe. In terms of procurement , China has a very advance and regulated
framework this is :-
i) Regulations :- It regulates the inflow and outflow of information those are publishing in
the government procurement Sites. It also regulates the supplier complains of the
government procurement and Biding of Goods and services.
ii) Registration and recoding :- As per the Ministry of finance in china all the procurement
decision and documentation must be done on the WWW.ccgp.gov.cn. The ministry of
Finance develops this platform to have transparency and proper procurement statistics
transfer.
iii) The sub-system of the China Procurement System:-
(1) First the Vendor has to develop a procurement plan.
(2) It will be measured by the experts.
(3) Item of procurement will be recorded.
(4) Recording of procurement will be done.
(5) Mode of payment will be chosen.
(6) Than measured with the Budget System.
(7) Information will be published.
 (8) Bidder will bid Online.
(9) Bid will be evaluated by the committee.
(10) Result will be published on the official site.
(11)Contract will be awarded.
iv) For the e-procurement :- All the information will be published, and experts will give their
opinion on the Bids. All the documents and bid information can be downloaded from the
site.

 Germany Practices :- Germany is a federal state that is govern under the European Union. In
terms of technology advancement and innovation. Germany has one of the world leading
automobile companies and manufacturing companies. The system and procedure for goods
and services is transparent and rigid. Following are the practices that are followed by the
German government :-
i) Obligation :- It is the mandatory and obligation for the companies to use ICT for data
transfer and communication. ICT is the governing committee that monitors the
procurement of goods and services.
ii) Documentation :- All the tender documents and notices to publish on the internet.
iii) Services :- It offers e-evaluation , e-award , e-communication , DPS , e-auction and e-
catalogue option for the vendors will biding.
iv) Limit for e-procurement is 25000 euros.
v) Steps Involve in E-procurement :-
(1) Procurement data is publicly regulated and available.
(2) Technical provision for data communication and necessary provision.
(3) A comprehensive Beta Test is conducted.
(4) Documents and guidelines are applicable for all goods and services.

 Japan Practices :- Electronic Bidding system is becoming a trending topic in the Japanese
market. All the tender and the procurement process are done through
GEPS(www.geps.gov.jp). It has reduced the time of bid submission and documentation in the
bidding process with proper transparency in the system. Following are the practices followed
in the Japanese procurement system:-
i) Tender Notice :- In the detail information of the tender is given by which the supplier can
decided whether to bid for the tender or back-out.
ii) Doing Explanatory Meetings :- In this all the interested vendors will organise a meeting in
which they discuss the details of the tender and express their opinion.
iii) Tender documentation :-All the documents of the tender are kept quite short and simple
to remove the complexity of the data. All the documents must be submitting throught the
online media.
iv) Standards :- In order to ensure quality , the Japanese has set some benchmark for the
supplier those who are willing to bid. Failure to meet the benchmark will lead to withdraw
from the bid program. These standards are evaluated by the Japan Industrial Standards
Committee.
v) License :- It is required for the medical and construction tender in which a specified license
is required for the vendor to Bid.
vi) Submission of Tender :- All the documents prepared for the tender must be submit on the
specified time and location given on the tender notice earlier.
vii) Electronic Bidding :- when the bid is open all the vendor can bid online on the GEPS site
for the tender.
 viii) After the evaluation and bidding contract is awarded.

 France Practices :- Procurement practices have been introduced in France in early 2000 and
start implemented in the 2005. It is applicable for all the purchases of goods and services
beyond a certain level of amount. Later France adopt the e-procurement because it provides
transparency in the process , reduces the length of the project time and contribute in the
European market. Following is the procedure for the procurement services :-
i) Lenders calling :- A call for lender is the procedure in which the person chosen with the
most economic advantage offer on the basis of the tender criteria is chosen. It is open for
all the candidates those who want to offer.
ii) Negotiated procedure :- In this the public person talks with the selected candidates and
negotiate the offer with them.
iii) Procedure of competitive dialogue :- It is resort method for the candidates or the firms
who are not qualified on the basis of the technical specific required. In this a meeting is
held between the public person and the candidate to drill down the requirement and let
him apply for the purchase.
iv) Design and implementation :- In this the purchaser will proceed when the project design
is matching with the project.
v) Contest Procedure :- In this a contest is held by the purchases to chosen between the
qualified candidates based on the jury decision in a prize wining contest. After this the
candidate is chosen and contract is awarded.
vi) Sites for the e-procurement :- www.ixarm.fr , www.achats.defense.gouv.fr ,
www.achatpublic.com and www.adema-mp.com.

Analysis of the Data :- After reading the different method and practices done by the various
countries. Following are the common factors that are required for e-procurement format :-

 Governing Body :- To establish a proper e-procurement process and operations. There must
be a standardised body to overlook the process and check the validity of the functions. For
example, to check the bidding is done timely , length of the transaction is managed , Tender
cost and bidding cost both are valid and not biased to someone, Proper documentation is
going on and recording of every transaction goes through the proper channel and in case of
error accountability should be done. In many countries such as United Kingdom has EGR and
CCS or China has CCGP for overlooking the transaction.
 Transparency :- E-procurement was introduced to establish a transparency in the system and
making sure there no under table or corruption took place. For that all the bidding system ,
offers , meetings between buyer and seller , awarding of contract and evaluation are done
throught the online portal. By this it makes sure that all the event took place we available to
public to show the level of transparency. In case of any error or fraud people can be take
accountable for their error.
 Evaluation :- While the entity or vendor quote their bid for the tender after the opening bid.
All those bids are evaluate and measured by the experts or the committee to make sure
proper tools and methods are used with no clerical error on them. These evaluation methods
differ from country to country and are done through the online platform. By the vendor can
know its error and rectify it before closing the bid time. All the report are publish on the online
portal.
 Documentation :- All the documents required for the tender bid as per the practice used and
followed by the country must submit the documents on the online portal. By this any falsified
person can’t bid for the tender or neither can duplicate the bid. This approve the authenticity
of the vendor and entity to apply for the bid and process.
 Online platform :- A online portal to be made or develop by the governing committee for the
bidding process. In this vendor can bid , modify the bid , auction for the bid , submit the
documents , use the e-resources and many more to make the length of the transaction
shortened and efficient.
 Procedure:- The process of bidding must be rigid and must involve a series of steps to be
followed by the Purchaser or the bidder. By this there will be a pattern in the process and
duplication of task will be reduced with no overlapping. This makes assigning the responsibity
easier and accountability more efficient.

Recommendation :- Following are the recommendation for the e-procurement in the

Indian Public sector:-
 Reduction in the procurement project timeline :- To make the procurement process more
feasible and efficient we need better and competitive pricing of the procured material and
negotiated contract to reduce the procurement timeline.
 Developing a secure system :- In the Indian PSU the system is not centralized or govern by a
single entity which the process more insecure. For that we need a independent governing
body that is not affected by the central or state government decisions reduce the chances of
fraud and data Manu plication.
 Fairness in the transaction :- For this every bidder must give the equal and proper treatment
for the bidding process with no biasness. This makes sure every person has equal rights to
bid.
 Transparency in the system :- Due to the long and delayed process of the procurement
system in the Indian PSU with no proper documentation. It causes a lack of transparency in
the system. Governing body must mandate the timely submission of documents with proper
disclosure of their Bid price and reports. Those must be evaluated by the authorised person
to improve transparency.
 Remove the foreign trade Barriers :- To remove the trade between the Indian PSU and
foreign entities and allow them to invest in the bidding process to widen the scope of the
market.

Conclusion :- For government to implement a successful e-procurement initiative in the

Indian Pubic sector companies it must :-
 Analyse the market system and process going on.
 Identify the opportunity to manage the system.
 Spend on strategy development and formation.
 Do establish a strong supplier management relationship.
 Centralized the contract management process.
 Perform control management system.
 Give supplier access to the resources and past data.
 Reduce the cycle time.
 Offer discount for the timely submission.
 By applying this a system can transparent and efficient that is required for the Indian
procurement system.

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