Electronic Procurement in Nepal

NEPAL

Avanindra Kumar Shrestha Tej Raj Pandey Public Procurement Monitoring Office (PPMO)

1. Country Background
Area: Population (2011 Census) 147,181 sq. km. 26.6 million

Religions (2001)

Per capita GNP (FY 2009)

Govt. Expenditure (2010/11) Revenue (2010/11) Govt. spending % of GDP Government procurement

Hinduism (81%), Buddhism (11%), Islam (4%), and others (4%). $427 (World Bank)
US $3.85 billion US$ 2.87 billion 22.5% 55 % of Government Spending

Govt. Procurement % of GDP

11.4 per cent

2. Public Procurement Reform Initiatives in Nepal

Reforms in public procurement initiated based on recommendation made by WB's Country Procurement Assessment Reports (CPAR), 2002.

Public Procurement Act (PPA) and Public Procurement Regulation (PPR) enacted in 2007.
The scope of the public procurement law:

Covers all procurement handled by public entities excluding security procurement. Establishes a fully decentralized system for procurement decision making. Standardizes procurement practices (use of common procedures and standard bidding documents and forms). Provides for an administrative review mechanism for complaint that allows bidder to challenge procuring entitys decision before filing for judicial review (Review Committee). Allows framework contracts.

3. Public Procurement Reform Initiatives in Nepal... ...

PPMO established in 2007 as a central Public Procurement Authority to act as functional and normative body as per the provision made in the PPA. PPMO is under Office of Prime Minister and Council of Ministers. PPMO's mandates are: Formulation of procurement policy and regulations Issue SBDs, technical guidelines and required manual; Monitor and conduct procurement audit and assess country procurement system; Provide advice and opinion to PEs on any matter set forth in the law or guidelines; Develop and operate e-GP single portal; Organize regular training programs; Prepare annual report on procurement proceedings and submit to the Government (Prime Minister).

4. Public Procurement Reform Initiatives in Nepal... ...

PPA includes provision for the use/adoption of eprocurement. Amendment of PPR in 22 July 2011 to strengthen PPMO leadership for the establishment of e-GP. PPMO mandated to establish, operate and manage single portal e-GP system. All Public entities have to carry out procurement proceedings by using single portal e-GP system as per PPMO Directives
World Bank and ADB providing support for institutional development to PPMO. Currently, PPMO is implementing a project to develop e-GP system with the support of WB and ADB (from 2010/11).

5. Development and Implementation of e-GP

To address problems of collusion and tender rigging, Department of Road (DOR) initiated e-submission in June 2007

Is this place to submit bid. We are here with all formalities (?).

6. Development and Implementation of e-GP

Budget speech (2010 &11) made e-GP mandatory for the procurement above NRs. 20 million from 17 April 2011(Approximately USD 285,600). In absence of e-GP central portal, following DOR system, 14 other ebidding portals developed and used by 114 public entities. To stop growth of multiple e-bidding portals, PPMO launched transitional central portal (www.gepson.gov.np) on 17 Sept 2011. PPMO provided e-GP Operation Guidelines and Directives, e-SBD (works) and training for the use of e-GP. Within two months 94 PEs registered , 23 tenders processed in the PPMO portal and 28 bidders registered. At present, all 16 e-GP portals are in use. By 15 November 2011, 289 PEs have adopted e-submission and 3076 e-tenders have been published (about 60 per cent growth compared to 2010) There are 2365 bidders registered in DOR system. Status of e-GP use in Nepal is given in table 1 (up to 15 November 2011)

7 Table 1:Public Entities using e-submission websites in Nepal

PEs' e-procurement websites .eproc.dor.gov.np .e-nea.org.np/tenders.php .doi.gov.np .edolidar.gov.np Active Buyer Start Date Published e-tenders 2010 81 1 25 38 June, 2007 June, 2010 Nov, 2010 July, 2010 1910 81 9 133 2011 (Up to 15 Nov ) 2412 184 45 59

.edudbc.gov.np
.eproc.nepalarmy.mil.np Other 9 individual portals .gepson.gov.np

39
2

Jan, 2011
Sept, 2011

4 -

334
2 19 21

1x9 2009 to 2011 94 Sept, 2011

Total (16 e-GP portals)

289

2137

3076

8 Interim Central Portal of e-GP: www.gepson.gov.np

9 Interim Central Portal of e-GP: www.gepson.gov.np

Facilities in the system (www.gepson.gov.np) Buyer Facility Publish Tender Notice Publish Bid Documents Tender Amendment Response to Tenders Download bids Upload information about award Bidders Facility online Registration Acquire information about bids Download bid documents Participate by uploading bids Amend / Withdraw bids Administrator Facility Managing the overall E- bidding site, Creating a Buyer,

Block the non relevant Bidder, if necessary

10 Interim Central Portal of e-GP: www.gepson.gov.np

Prevailing Security Feature

Data Base encrypted Access with own users name and password Users password encrypted form Server data access control
Accessible through PPMO IP address only Three level password security Access authorization controlled Automatic Log maintained

11 e-GP Planning
For e-GP development in Nepal: WB consultant prepared report "Nepal e-GP Readiness Assessment and Roadmap" in October 30, 2007. ADB consultant prepared report on "Towards Instituting an e-GP system in Nepal" in September 10, 2009. PPMO prepared Nepal Public Procurement Strategic Framework -2010/ 013 (NPPSF-I) and Strategic Policy Document for the implementation of e-GP approved by Prime Minister on June 2010 . The plan has focused reforming country procurement system including development of e-GP system . A High level Coordination Committee chaired by Chief Secretary has been formed on July 2010 involving secretaries of major ministries. PPMO in support of WB and ADB procured consultant services to review existing e-GP software and develop e-GP software Phase-I which will be completed by March 2012. Strategic Policy Document for the Implementation of e-GP has mentioned conceptual framework and action areas for developing e-GP

12 Action plan for developing e-GP: Schedules & Achievements (based on NPPSF-1)
Fiscal Year July 16 2010/ July 15, 2011 Planned Activities Achievements

Establish High Level NPPSF Coordination Committee; 100 % Policy Decision by Government of Nepal to implement July 2010 e-GP; Institute a Core Task Force in PPMO and provide policy guide for e-GP Development; August 2010

Review existing e-procurement system in the country and define e-GP requirements and develop terms of reference (TOR) to design and develop e-GP
Hire consulting firm to design, develop and launch eGP single portal (Phase -I) Set up e-GP section/Division in PPMO

August 2011

Nov. 2011 Not achieved yet

13 Action plan for developing e-GP: Schedules & Achievements (based on NPPSF-1)
Fiscal Year July 16 2011/ July 15, 2012 Planned Activities Develop interim single portal to manage transition Schedule / Achievements September 2011

Develop e-GP Operation Guidelines and manuals;

Familiarize e-GP to bidders and buyers Organize training for bidders an buyers

September 2011
Continuous Continuous

Carry out system Audit and testing of e-GP software phase I

Launch and operate e-GP software phase I

December 2011
January 2012

Conduct study and define requirement to establish PPMIS

Hire consulting firm to develop e-GP phase-II

July 2012
July 2012

14 Action plan for developing e-GP: Schedules & Achievements (based on NPPSF-1)
Fiscal Year July 16 2012/ July 15, 2013
Planned Activities Collect and analyze Baseline data for monitoring framework Schedules Sept 2012

Develop NPPSF-II for 2013-2015

Organize training for bidders an buyers Procure necessary equipment for e-GP and PPMIS

Feb 2013
Cont. June 2013

Carry out system Audit and testing of e-GP software phase II

Launch and operate e-GP software phase II Establish PPMIS with linkage with e-GP

July2013
July 2013 July 2013

Develop e-GP guidelines and manuals to operate E-GP Software (Phase-II)

July 2013

15 e-GP: Architecture
e-GP Phase-I is designed to include : bidder and buyer registration, central database system of bidders, central bid notice publication, e-submission for the procurement of goods, works and consulting services e-GP Phase-II is designed to include: Bid-evaluation, contract award, contract administration, payment, and archiving, e-catalogue,

16 Major Issues and Challenges

e-GP is at basic stage it is only involved in e-submission Weak technological infrastructure to implement e-GP Digital signature system not in place Capacity gaps in PPMO and in the procurement units of line ministries as well as in suppliers Weak Institutions to manage e-GP Weak organizational set up Weak training capacity Legal framework not harmonized to support e-GP

17 Identify areas that need MDBs assistance

PPMO proposals to ADB is in the process of approval which include following components: 1. Human Resource Development (develop human resources to establish e-GP system and PPMIS) 2. Planning, Programming, and Budgeting (develop NPPSF-II and create baseline data for Monitoring Framework). 3. Public Procurement Management Information System (establish PPMIS and linakage with IFMIS). 4. Component 4: e-Government Procurement (Develop e-GP phase II and operate full e-GP module).

Thanks