Procurement Templates

Global Procurement

procurement

Global Procurement or Procurement around the world

In this article, I have chosen a select few countries to shine a spotlight on how procurement differs around the world

USA

Source:  Practical Law

Regulatory framework

The US federal procurement system is subject to numerous statutes and international agreements. US state and local government procurements are not examined in this article, but are subject to similar requirements; indeed, many of the requirements discussed apply to state and local procurements when they are funded with federal monies.
The Federal Acquisition Regulation, 48 C.F.R. (FAR) (available at www.acquisition.gov/far) is the principal regulation governing federal procurements. The FAR applies to all executive departments, military departments, and independent establishments as defined in 5 U.S.C. §§ 101, 102, and 104(1), as well as to wholly owned government corporations as defined in 31 U.S.C. § 9101. These departments and entities have separate supplements to the FAR that apply to their procurements (see Question 3). There are some entities not covered by the FAR (see Question 5, Exemptions).
Two statutes are the foundation for modern federal procurement:
  • Federal Property and Administrative Services Act of 1949 (41 U.S.C.) (FPASA).
  • Armed Services Procurement Act of 1949 (10 U.S.C.) (ASPA).
Other applicable statutes include:
  • The Federal Acquisition Streamlining Act of 1994 (FASA) and the Federal Acquisition Reform Act of 1995 (FARA) which:
    • simplified some aspects of the federal procurement process;
    • encouraged federal agencies to procure commercial items.
  • The Competition in Contracting Act of 1984 (CICA) which:
    • requires that federal procurements be competed on a “full and open” basis;
    • provides for competitive negotiations;
    • substantially restricts the use of sole-source and other non-competitive contract awards.
  • The Truth in Negotiations Act of 1962 (TINA), which requires in many significant negotiated procurements that bidders submit formal cost or pricing data to permit the government to determine whether the contract price is fair and reasonable (see Question 7, Thresholds). Failure to provide complete, current, and accurate cost or pricing data may entitle the government to adjust the price and to impose additional penalties after award.
There are many other federal laws that govern or affect federal procurement. The US became a party to the WTO Government Procurement Agreement on 1 January 1996, and various submissions that summarise US federal procurement law, policies, and procedure are available at www.wto.org.

Regulatory authorities

The Office of Federal Procurement Policy (OFPP) in the Office of Management and Budget (OMB) has primary responsibility for public procurement policies and regulation. The OFPP shapes the policies and practices that federal agencies use to acquire the goods and services they need to carry out their responsibilities. Under FAR 1.202, the FAR is maintained through the co-ordinated action of the Defense Acqusition Regulations Council (which represents the US Department of Defense) and the Civilian Agency Acquisition Council (which represents non-defence US government agencies).
2. What are the overriding principles of the legislation listed in Question 1?
The overriding principles of the legislation listed are set out at FAR 1.102, and include:
  • Delivering the best quality products or services on a timely basis while maintaining the public trust and fulfilling policy objectives.
  • Maximising the use of commercial products and services.
  • Using contractors who have a demonstrated record of superior past performance.
  • Promoting competition.
  • Conducting procurement with business integrity, fairness, and openness.
  • Fulfilling public policy objectives (such as promoting small business and maximising use of products from the US and from qualifying countries with which the US has open trade agreements).
  • Exercising sound business judgement.

Regulation of specific industries

3. Are any industries subject to specific regulation?
The FAR contains many provisions that apply to particular industries, specifically:
  • Construction.
  • Manufacturers and providers of supplies.
  • Providers of services.
The FAR provisions relating to inspection and acceptance, terminations, and other clauses can differ significantly depending on whether the contract involves the acquisition of construction, supplies, or services. In addition, each of these industries is subject to different statutory and regulatory labour standards requirements, including minimum wage and benefit rates, and record-keeping requirements.

Recent trends

4. What are the recent trends in the public procurement sector?
In the 1990s, the federal procurement system was reformed to more closely resemble the commercial marketplace. Reforms included FASA’s streamlined procedures for purchasing commercially available off-the-shelf items and re-organisation of the simplified acquisition procedures for small procurements.
Since then, however, federal procurement policy has largely reversed course. Over the past years, the federal government has imposed a considerable number of new requirements that apply to many contractors, including:
  • Mandatory disclosure of known violations of federal criminal laws or of the civil False Claims Act.
  • Creation of business ethics awareness and compliance programmes.
  • Participation in the Department of Homeland Security’s E-Verify employment system.
  • Creation of screening systems to prevent employee conflicts of interest.
Many of these new regulations relate to other current trends in government procurement including:
  • Contractors’ increased use of bid protests. Contractors are increasingly using bid protests to pursue government contracts. In recent years, the percentage of successful bid protests (that is, those in which the protest was sustained or the agency took voluntary corrective action) has climbed, from 33% in 2001 to 42% in 2011. With a higher success rate, contractors have a greater incentive to file bid protests. Consequently, the number of bid protests filed before the Government Accountability Office (GAO) has also grown, from 1,146 in 2001 to 2,353 in 2011.
    Attention has also turned to reforming the bid protest procedures at the Court of Federal Claims, where unsuccessful bidders can either file an initial bid protest or file a subsequent protest if they are unsuccessful before the GAO. There is concern that this procedure may unduly delay procurements. Recently, the Department of Defence proposed legislation requiring the Court of Federal Claims to follow the same prompt timelines as the GAO, which would eliminate the practice of protesters who are unsuccessful with the GAO trying their case a second time before the court. This proposal was rejected, but more substantive action may be taken on this issue in the future.
  • Regulatory reform of conflicts of interest. Actual and perceived risks of conflicts of interest by contractor employees (known as personal conflicts of interest (PCIs)) and companies (organisational conflicts of interest (OCIs)) have prompted new and proposed regulations, primarily directed at contractors and employees that provide advisory and technical services, or that have access to sensitive non-public information during contract performance. To address these risks, the government has established rules governing PCIs for the first time and begun reforming its regulation of OCIs:
    • regarding PCIs, in December 2011 the FAR was amended to include a set of rules for contractor employees who perform acquisition functions closely associated with governmental functions (FAR 3.1103(a)). The new rules require these employees to be screened from projects in which they may have a financial or employment interest and to refrain from using non-public information gained through performance of a government contract for personal gain;
    • the government is also re-evaluating its rules for OCIs. In 2010, the Department of Defense issued a limited rule prohibiting firms that engage in systems engineering or technical assistance for major defence acquisition programmes from participating in the performance of the programme as either a prime contractor or a subcontractor (FAR Subpart 209.571). A proposed draft of more general OCI rules is pending, which focuses on contractors’ access to non-public information obtained under contractual duties to assist the government. The draft proposes several mechanisms for preventing the wrongful disclosure of information to others within the contracting firm, to subcontractors, and to third parties. The draft also proposes safeguards to ensure that employees with non-public information are screened from situations where that information might influence competitions for new contracts.
  • Sequestration and the prospect of decreased government spending. Sequestration is a product of the Budget Control Act of 2011. Among other things, the Act provides that if Congress fails to achieve significant reductions in the federal budget (a target amount of US$1.5 trillion), then automatic, across-the-board cuts (known as sequestration) to most discretionary government programmes will occur on 1 January 2013. It is projected that sequestration would result in reductions of 7.6% to 10% in most discretionary and some non-discretionary government programmes. Regardless of whether sequestration occurs, contractors and their government counterparts must be prepared for smaller budgets and increased competition. Austerity measures in Europe may foreshadow a US government budget that either shrinks or grows more slowly than in the past.
  • Expansion of the False Claims Act. In recent years the civil False Claim Act, which provides for penalties and damages for false representations made in order to obtain or perform federal contracts or receive other benefits, has been dramatically expanded. The Act provides that members of the public (referred to as relators) can initiate civil suits on the government’s behalf and recover a portion of any damages paid by the contractor. Congress amended the statute in 2009 and 2010 to expose firms to new and greater risks of False Claim Act liability.
    While claims initiated by the federal government have increased only slightly over the last ten years, claims brought by relators (that is, a private person allowed to bring a claim on the US’s behalf) have increased dramatically. From 2001 to 2008, relators brought on average 365 claims per year. That figure increased to 433 in 2009, 575 in 2010, and 638 in 2011. The monetary value of settlements and judgments has also increased. From 2001 to 2008, the average yearly total of settlements and judgments was US$1.8 billion. That figure increased to US$2.5 billion in 2009, US$3.1 billion in 2010, and US$3 billion in 2011. The increased level of risk for contractors is made worse by their obligation to report known False Claims Act violations or face severe penalties.
  • Increased use of suspension and debarment. The federal government has a well-established administrative system for suspension and debarment of government contractors (in FAR Subpart 9.4) as a remedy to protect the government from irresponsible contractors. However, the impact of an adverse action is often punitive. Causes for debarment and suspension include (FAR 9.406-2 (debarment) and FAR 9.407-2 (suspension)):
    • a conviction of or civil judgment for fraud or dishonest conduct;
    • a serious violation of the terms of a government contract or certain statutes; and
    • any other cause so serious or compelling as to justify the action.
    The scope of a suspension or debarment can vary based on the judgement of the suspending and debarring official. The action can be limited to a particular organisational element of the contractor or be extended to all organisational elements (FAR 9.407-1(c) and FAR 9.406-5). Fraudulent, criminal or other seriously improper conduct of officers, directors, employees or other individuals associated with the contractor can be imputed to the contractor, and vice versa (FAR 9.406-5(a) – (b)). In most suspensions or debarments, a cause is established by another determination, for example, a grand jury’s decision to indict, or a conviction of or civil judgment for fraud. Increasingly, agencies are initiating fact-based debarment actions, where the agency conducting the proceeding attempts to establish that grounds for debarment exist. This is partly the result of pressure on agencies from Congress and the Office of Management and Budget to be more aggressive in this area of enforcement.

Scope of rules

Entities covered

5. Which entities must comply with the procurement rules? Are there any exemptions?

Entities covered

Most federal departments and agencies are subject to the FAR and to federal procurement statutes (see Question 1).
Exemptions
Several US government entities, such as the US Postal Service, the Federal Aviation Administration, and the Federal Deposit Insurance Corporation are not subject to the FAR, but have their own procurement regulations that are similar to the FAR in most respects.

Contracts covered

6. What contracts do procurement rules cover? Are there any exemptions?

Contracts covered

The procurement rules apply to all acquisitions under contracts for supplies, services, or construction for the US government.

Exemptions

There are no particular exemptions to contracts covered by the FAR and other procurement rules.
Several US government agencies such as the Department of Defense, National Aeronautics and Space Administration, Department of Transportation, and Department of Homeland Security have statutory authority to use “other transactions” to procure advanced research and development or prototypes for evaluation, particularly where these services are available from non-traditional sources that would be otherwise reluctant to participate in federal procurements. An “other transaction” is not considered a contract and is not subject to the FAR or other procurement statutes.
7. Are there specific thresholds to determine if a contract is subject to the public procurement regime? Are there any aggregation/anti-avoidance rules?

Thresholds

The FAR includes financial thresholds that trigger special, simplified procedures. For example, FAR Part 13 includes simplified rules that allow federal agencies to buy products or services more quickly, more economically, and with a focus on small businesses. These simplified FAR rules apply if the contract price is less than US$150,000. Contracts under this threshold are also set aside for award to small businesses.
Other provisions containing financial thresholds include the Truth in Negotiations Act and corresponding FAR provisions, that require that contractors submit formal cost or pricing data only for contracts and contract changes with a value greater than US$750,000.
The FAR also includes thresholds over which the rules for the WTO GPA apply to federal procurements, with certain exceptions. These thresholds are adjusted approximately every two years. The current thresholds for federal procurements are US$202,000 for contracts for goods and services and US$7,777,000 for construction contracts.

Aggregation/anti-avoidance rules

The FAR and other statutes and regulations include restrictions against both aggregating (that is, combining) and splitting procurements to avoid various procurement rules.
For example, the Small Business Act (15 U.S.C. § 632(o)) discourages agencies from bundling procurement requirements without adequate justification where doing so would impair the ability of small businesses to compete for larger contracts.
With regard to the WTO GPA rules, agencies cannot divide an acquisition with the intent of reducing its estimated value below the dollar threshold of the WTO GPA (FAR 25.403(b)( 3)). The total value of estimated contracts for the same type of product must be aggregated to determine whether the thresholds for application of the WTO GPA rules apply (see Question 7, Thresholds).

Concessions

8. Does the procurement regime apply to concession contracts? If not, how is the award of concession contracts regulated?
Concession contracts are commonly understood to involve arrangements where a provider of goods or services to the public holds a contract or licence to operate on federal property or at a federal facility. Because these contracts do not ordinarily involve the procurement of goods or services for the benefit of the US government, the FAR and other procurement statutes and regulations generally do not apply. Agencies that permit concessions have their own, relatively brief, regulations that govern these arrangements.
However, the FAR and other procurement rules apply if a concession contract involves more than a nominal benefit to the US government. For example, in Starfleet Marine Transportation, Inc., B-290181, July 5, 2002, 2002 CPD 113, a concession contract involving ferryboat services used primarily by members of the public was found to be subject to the FAR and other procurement requirements because the contract required the concessionaire to provide janitorial services for the agency’s docks and piers as well as to provide transportation for a government employee who worked as a park ranger.
Privatisations and PPPs
9. Are privatisations and PPPs subject to the procurement regime? If not, what are the relevant legal rules?

Privatisations

Privatisation is subject to Office of Management and Budget (OMB) Circular A-76 and FAR Subpart 7.5. These set out requirements and procedures to ensure that privatisation contracts are awarded only where they result in some savings and do not involve inherently governmental functions.
In addition, the Department of Defense has specific statutory authority and provisions that relate to the procurement of contracts to privatise utilities infrastructure and military housing.

PPPs

There are no particular rules for federal PPPs as these are not commonly used on purely federal projects.
PPPs have become common at state and local government levels as vehicles to further the funding, development, construction and operation of large public infrastructure projects such as highways and mass transit systems. These projects are subject to state and local legal requirements and may also include federal requirements when federal funding is involved.

Shared services and “in-house” arrangements

10. Do shared services projects and “in-house” arrangements trigger the application of the public procurement requirements? Are there any exemptions?
The most common form of shared services are:
  • The US General Services Administration (GSA) schedule contract system under FAR Part 8.
  • Government-wide acquisition contracts (GWACs).
Both GSA schedule contracts and GWACS are multiple-award, indefinite delivery/indefinite quantity (IDIQ) contracts under which federal agencies can place individual, customised delivery or task orders for common types of supplies or services.
Agencies can also acquire goods or services directly from or through another agency, under interagency acquisitions that are usually subject to the Economy Act (15 U.S.C. § 1535) and FAR Subpart 17.5.

Procurement procedures

11. What procedures do regulated entities use when carrying out procurements? Can regulated entities freely choose between the procedures? When is it appropriate to use each procedure?

Available procedures

Under the FAR, agencies generally conduct procurements using sealed bidding under FAR Part 14 or negotiated competitive proposals under FAR Part 15. Agencies can use simplified acquisition procedures for the purchase of goods or services below US$150,000 (see Question 7, Thresholds).

Freedom of choice

Agencies have broad discretion in determining the procedures to apply to a particular procurement. Sealed bidding is used most often for construction and procurement of supplies where no modifications or developmental work is contemplated. Competitive proposals are used most often for services and for supplies (including major systems) where modification and/or developmental work is required and the award will be based in part on factors other than price.

Suitability

Sealed bidding is typically used when the following conditions apply (FAR 6.402(a)):
  • The award is made primarily on the basis of price.
  • It is not necessary to conduct discussions with tenderers.
  • The agency reasonably expects to receive two or more bids.
Competitive proposals are typically used when (FAR 6.402(b)):
  • The award will be based at least in part on non-price factors and the agency wishes to conduct discussions, and potentially ask for revised proposals, from bidders.
  • Goods are to be provided or services performed outside the US.
    Key features
12. What are the key features of each procedure? What are the applicable time limits?
Most federal procurements are widely advertised on the central website, www.fbo.gov, as well as on agencies’ individual sites. Agencies have broad discretion in establishing the time limits and deadlines for submission of bids or proposals.

Sealed bidding

Key features. Sealed bidding procedures are governed by FAR Part 14. Sealed bidding involves the following stages:
  • The publication of an invitation for bids.
  • Submission of bids by an established deadline.
  • Evaluation of bids following a public bid opening.
  • Award to the bidder whose bid is most advantageous to the government, based solely on price or price-related factors.
Time limits. Agencies have broad discretion over deadlines for submission of bids, but must publicise the invitation for bids a “sufficient time” before bid opening, to give bidders a reasonable opportunity to prepare and submit bids. There is no particular guidance or precedent as to what constitutes sufficient time for bidders to prepare bids; the length of time can be relatively short. If a bidder has a reasonable cause to believe that the time allowed is insufficient, the bidder should consider notifying the Contracting Officer and requesting time be extended.

Competitive proposals subject to negotiations

Key features. The procedures for negotiated procurements based on competitive proposals vary greatly, both with respect to the source selection process as well as the degree of formality. In large, complex procurements it is not unusual for the agency to hold industry conferences and to publish draft proposals before issuing a final solicitation. Once a solicitation is issued and proposals are received, agencies may choose to limit the number of bidders it will consider for final award to a competitive range that only includes bidders it believes have a reasonable chance of success. An agency can then award the contract with or without discussions. If discussions are conducted, the agency may hold several rounds, and request one or more revised proposals based on discussions.
Time limits. The agency has great discretion in setting the time limits for submission of proposals, evaluation of proposals and conduct of any discussions, submission of revised proposals following discussions, and award.

Technical specifications

13. Are there any requirements concerning technical specifications of tenders?

Agencies have reasonable discretion to establish technical specifications under tenders and are normally only required to show that there is a reasonable relationship between the specification and the agency’s requirement for the supply or service being procured. Agencies must utilise commercial items rather than items that are subject to unique government specifications whenever a commercial item will satisfy their requirements (FAR Part 12). Agencies are also encouraged to use performance-based specifications (that is, specifications that state the salient characteristics for the supply or service) rather than detailed design or technical specifications (FAR 11.104). Agencies cannot draft technical specifications in a manner that unduly favours one manufacturer or service provider over others.

Alternative bids

14. Are there specific rules in relation to alternative bids?

Bidders must review individual solicitations carefully to determine whether alternative bids or offers are permitted. Even where alternative bids or tenders are permitted, bidders must often submit a bid that fully complies with the solicitation’s requirements along with any alternative bid they may wish to submit.

Contract award criteria

15. What are the requirements relating to contract award criteria?
Contract evaluation and award criteria can vary significantly. Although agencies must consider price/cost and past performance of the bidder, they have significant discretion over the weight to give to these and other technical award criteria, provided that they can show that the criteria:
  • Do not unduly restrict competition.
  • Reasonably relate to the agency’s requirements.
All award criteria must be set out in the solicitation, and the agency must amend the solicitation if it determines after the solicitation is issued that these criteria must be modified. An agency’s failure to follow the established criteria, or the application of criteria not set out in the solicitation, is a common ground for bid protest.

Changes to an existing contract

16. Does an extension or amendment of an existing contract require a new procurement procedure?

Extension of contract

Many US government contracts include provisions that permit the extension of contracts without requiring a new procurement procedure.
For example, many contracts include FAR 52.217-8, which permits the government to extend the term of a contract for an option term (usually one year) at prices and other terms that are usually set at the time of contract award. The government is not obliged to exercise such options, and must provide advance notice to the contractor of its intent to exercise an option.
Many contracts also include FAR 52.217-9, which permits the government to extend contracts for necessary services or goods for a short period of time (no more than six months) at current prices to address an emergent need, usually when there is an unforeseen delay in the award of a new contract.

Amendment of contract

Under FAR Part 43, the US government can make changes in contracts by issuing modifications (that is, amendments) that may add or reduce the amount of goods or services or affect other terms of the contract, provided any changes are within the general scope of the contract, as awarded.
In the event of a modification, the contractor may be entitled to an equitable adjustment in the contract’s price, performance schedule, and other terms to the extent these are affected by a change. In the event of a dispute between the contractor and the government over the need or terms of an equitable adjustment, the contractor must usually file a formal claim and proceed with the contract performance (see Question 17).

Enforcement

17. Who can bring a claim for non-compliance with procurement legislation? What are the available review procedures? Are there any associated statutes of limitation?

Right to bring a claim

For an award claim (that is, a bid protest (see Question 4)), only interested parties can file a protest. A bidder or potential bidder is usually considered to be an interested party if it has actually submitted a bid or proposal, or would be eligible to submit a bid or proposal if its protest were granted.
For a post-award claim, a contractor must first file a claim with the cognisant contracting officer under the Contract Disputes Act (41 U.S.C. §§ 7101–7109) (CDA). If the claim is for more than US$100,000, the contractor must certify the claim in the form prescribed by the CDA. The contracting officer must issue a final decision on the contractor’s claim (or, for claims over US$100,000 provide an interim response with a date by which a decision will be issued) within 60 days. If the contractor is not satisfied with the contracting officer’s final decision, or if the contracting officer fails to issue a timely decision, the contractor can use enforcement procedures (see below, Enforcement procedures).

Enforcement procedures

A bid protest can be filed either with the agency, before the GAO, or with the US Court of Federal Claims.
A post-award claim can be filed with either an agency Board of Contract Appeals (an administrative tribunal) or the US Court of Federal Claims.

Statutes of limitation

Bid protests before an agency or the GAO are subject to very strict deadline rules. Any protest of a term of a solicitation or other matter that is known to the bidder before the deadline for submission of proposals must be filed before this deadline. Any protest relating to an award must be filed within ten days of the award or the date the bidder learned of its grounds of protest (except in negotiated procurements under FAR Part 15 in which the agency must provide a debriefing, in which case the bidder must file its protest within ten days of the debriefing). Shorter deadlines apply if the bidder wishes to have the contract award delayed or performance suspended while the protest is handled.
Protests before the Court of Federal Claims against a term of a solicitation must also be filed before the deadline for submission of bids or proposals. Post-award protests to the Court of Federal Claims are subject to a six-year statute of limitations. However, the court may apply the doctrine of laches (that is, an equitable doctrine used where a claimant has delayed asserting its rights) to dismiss an otherwise timely protest where it appears the bidder has unduly delayed filing a protest.
A contract claim under the CDA must be filed with the contracting officer within six years of the date the contractor becomes aware, or should have become aware, of the basis for its claim. However, several FAR provisions require prompt notice of potential claims, and failure to comply with these requirements may result in loss of the right to claim. Following issuance of a final decision (or the contracting officer’s failure to issue a timely final decision), contract claims must be filed with a Board of Contract Appeals within 90 days or with the Court of Federal Claims within 12 months.
UK/EU (inc France and Germany
The UK is governed by the Public Regulations 2015 in line with EU procurement law. You can read about public procurement regulations and how it affects procurement rules on this website. Either search or go to Categories at the bottom of the page to search by segments.
Canada
Source: Buy and Sell  Canada

The Government of Canada is one of the largest public buyers of goods and services in Canada, purchasing approximately $16.05 billion worth every year on behalf of federal departments and agencies. As the government’s main buyer of goods and services (including construction), Public Works and Government Services Canada (PWGSC) plays a key role by helping federal departments and agencies define their requirements or scope of work, and obtain what they need at the best value.

PWGSC procurement activities are principally carried out pursuant to the following legal framework:

  • statutes and regulations;
  • agreements;
  • policies, directives, procedures and guidelines; and
  • challenge process.

The procurement process begins when a federal department or agency sends a requisition to PWGSC. Depending on the requirements, the requisition may be handled by a contracting officer at headquarters or in a regional office.

In keeping with the Government Contracts Regulations, procurement is done by means of:

  • a competitive procurement process whenever possible; or
  • a non-competitive procurement process (only used in certain special circumstances).
Australia
Source: Finance. Gov.Au
Compliance with the CPRs (3.7) Updates have been made to reflect that the functions of the Australian Digital Health Agency (ADHA) and the National Portrait Gallery of Australia (NPGA) are covered by Australia’s existing international obligations on government procurement and therefore, must apply the CPRs.

In addition, a minor change in the way Australian Human Rights Commission and Old Parliament House apply the CPRs has been made to make it consistent with ADHA and NPGA.

 N/A
Notifications to the market (7.13) A new clause has been included to highlight some additional notification requirements that are needed when conducting a multi-stage procurement. The clause reads:

The initial approach to market for a multi-stage procurement must include, for every stage, the criteria that will be used to select potential suppliers, and if applicable, any limitation on the number of potential suppliers that will be invited to make submissions.

  Guidance Multi-stage [pdf 165 KB]
Open tender (9.8) Open tender has been amended to reference multi-stage procurements.

Open tender involves publishing an open approach to market and inviting submissions. This includes multi-stage procurements, provided the first stage is an open approach to market.
Prequalified tender (9.9) Pre-qualified tender has been amended to only include procurements from the Legal Services Multi-use List (due to expire on 30 June 2018), as required by the Legal Services Directions 2017.

The establishment of multi-use lists (MULs) have previously been allowed under the CPRs. Importantly, this was not a procurement in itself as it did not involve a value for money assessment. Rather it was an activity that qualifies suppliers who may wish to participate in future procurement processes.

Procurements from a MUL (other than the Legal Services MUL) will no longer be possible.

The changes to prequalified tendering are consistent with best practice and our international obligations.

 N/A
Limited tender conditions (10.3) Limited tender condition 10.3(i) for repeat construction services is no longer permissible under Australia’s international obligations, so has been removed.

Instead, an entity could use an options contract for repetitive construction, provided the market is notified in the initial open approach to the market.

 N/A
Request documentation (10.6) A number of amendments have been made to paragraph 10.6 to reflect the minimum standard of information to be included in request documentation.

This includes, estimated quantities (if the quantity is not known), the relative importance of evaluation criteria, and any known dates for the delivery of goods and services.

 Guidance – request documentation[PDF 166 KB ]
Minimum time limits (10.19‑10.26) Under Australia’s international obligations, the 25 day minimum time limit for open approaches to market will need to be extended by 5 days for each of the following:

  • if request documentation is not provided electronically, and
  • when submissions are not accepted electronically.

If entities are using AusTender to publish tender documentation and receive tenders, there should be no difference for procuring entities.

Planned procurements will now need to be on the Annual Procurement Plan for 40 days (previously 30 days) before the minimum time limit can be reduced to 10 days.

Entities will no longer be able to reduce the minimum time limit to 10 days in the case of second or subsequent approaches for recurring procurements. An alternative solution for recurring procurements could be for an entity to include an option for additional work in the initial request documentation and contract.

 N/A
Awarding contracts (10.37) Entities must not use options to avoid the rules of Division 2 of the CPRs. Language has been inserted to explicitly state this. N/A
Definitions (Appendix B) Procurements through the Legal Services Multi-use List will be the only prequalified tenders to occur from 1 January 2018. A definition of ‘legal services multi-use list’ has been included to specify this arrangement.

A definition of ‘multi-stage procurement’ has been included to clarify requirements for these types of procurements after the removal of prequalified tender.
Japan
Source: EU Japan 

The Japanese public procurement (PP) market is one of huge potential, with EU-estimates ranging from EUR 550 billion to EUR 565 billion. EU-companies are relatively underrepresented in the PP-market in Japan, partly due to non-regulatory barriers and the geographical distance and lack of knowledge of the market. EU companies that are presently active in this market are primarily larger global players, with a sizeable presence in Japan.

In Japan, the majority of government procurement is conducted via competitive tendering procedures, with the participation of qualified suppliers. Those who are interesting in bidding for procurement contracts need to apply to the procuring entity concerned for qualification. In order to increase your opportunity of participating, it is recommended that potential suppliers apply in advance regardless of whether a particular procurement notice has been advertised or not.

[1] MOFA, Suggestions for Accessing the Government Procurement Market of Japan

Merits of participation in Public Procurement

Tendering for government contracts in Japan can have a number of merits:

  1. Government offices often pay a higher than market price for goods and services.
  2. There are a huge amount of tenders notices each year (more than 1.35 million in 2013).
  3. There is lower risk of non-payment by government offices.
  4. It can be good PR for your company, when venturing outside of PP.
  5. Many tenders do not make a distinction between larger and smaller companies; there is a more level playing field.
Tendering Procedures

Type of procedureOccurrenceTender sizeOpen TenderingCommonAnySelective TenderingRareAnyLimited (Single) TenderingFrequentAnyOpen counterFrequentSmallReverse (Dutch) AuctionRareAnyTendering procedures related to public works’ procurementVariesLargeOpen tendering proceduresippan kyousou nyuusatsuOpen…
China
Source: Practical Law

Regulatory framework

The primary law regulating government procurement in China is the Government Procurement Law of the People’s Republic of China (GPL), which was promulgated in 2002 and implemented on 1 January 2003. The Chinese government issued a consultation draft of the GPL Implementation Rules, but it remains uncertain when the final draft of the GPL Implementing Rules will be issued (see Question 18).
In addition to the GPL, the government also introduced the Tendering and Bidding Law of the People’s Republic of China (Bidding Law), promulgated on 30 August 1999, effective from 1 January 2000 and the Implementing Rules of the Bidding Law, promulgated on 20 December 2011, effective from 1 February 2012.
The Ministry of Finance published the Measures for the Administration of Tenders and Invitations to Bid in Government Procurement of Goods and Services on 11 August 2004.
Several Ministries jointly published the Measures for Electronic Bidding on 4 February 2013, which took effect from 1 May 2013.
Local governments in most provinces, municipalities and autonomous regions have issued local administrative rules for implementation of the GPL and the Bidding Law in their local jurisdictions.
During the World Trade Organization (WTO) accession negotiation, China promised that its GPL will comply with the basic spirit of the WTO Agreement on Government Procurement (GPA) and will refer to the UNCITRAL Model Law on Procurement of Goods, Construction and Services. China has now submitted its third offer to accede to the WTO GPA.

Regulatory authorities

The primary governmental authority in charge of public procurement in China is the Ministry of Finance. Several other ministerial authorities have the authority to regulate and oversee government procurement matters in their relevant sectors, including the:
  • National Development and Reform Commission.
  • Ministry of Science and Technology.
  • Ministry of Commerce.
  • Ministry of Communications.
  • Ministry of Housing and Urban-Rural Development.
  • Ministry of Water Resources.
In addition to these national authorities, local governmental authorities have the authority to supervise and administrate the local government procurement activities.

2. What are the overriding principles of the legislation listed in Question 1?

Chinese government procurement legislation promotes the principles of:
  • Openness.
  • Transparency.
  • Fair competition.
  • Impartiality.
  • Honesty.

Regulation of specific industries

3. Are any industries subject to specific regulation?

Chinese government legislative rules apply to contracts for procuring goods, services or construction projects in all industries, if either:
  • The procurement contracts fall within the scope of the centralised procurement catalogue issued by the central or local governmental authorities (see Question 6, Contracts covered).
  • The contract value exceeds the thresholds prescribed by the authorities (see Question 7, Thresholds).
The centralised procurement catalogue is normally updated on a yearly basis. Government procurement applies to all industry sectors, ranging from IT, manufacturing, healthcare, to energy efficiency.

Recent trends

4. What are the recent trends in the public procurement sector?

Since 2006, it is national government policy to promote Chinese innovation, with an intention to reduce dependence on foreign technology. In line with this policy, the National Development and Reform Commission, the Ministry of Finance and the Ministry of Science and Technology have jointly issued several circulars to link Chinese innovation to government procurement. Under the circulars, preference is given to companies which:
  • Own intellectual property in China.
  • Possess registered trade marks in China.
  • Own a licence to use intellectual property in China.
This policy of linking government procurement to local or Chinese innovation has raised substantial concerns among international companies, who viewed the policy as preventing international companies from accessing the Chinese market. In June 2011, the Chinese government suspended three key rules on government procurement, to de-link government procurement from indigenous innovation. This move has been applauded by foreign firms, for allowing them better access to the domestic market and creating a more even playing field for Chinese and foreign companies.
The Chinese government has also encouraged small and medium-sized enterprises (SMEs) to take part in government procurement. The Ministry of Finance and the Ministry of Industry and Information Technology jointly issued the Interim Measures on Promoting SMEs in Government Procurement in 2011 (Interim Measures) under which individuals or entities cannot, by any means, prevent or restrict SMEs from participating in government procurement activities in their specific industries and jurisdictions. Departments responsible for budgeting for government procurement must reserve at least 30% of the total annual budget for procurement from SMEs. Chinese government encourages large businesses to team up with SMEs. Larger businesses can enjoy a price adjustment of between 2% to 3%, if they form a consortium with SMEs to undertake at least 30% of the total work. To prevent abuse of SME status, the Interim Measures also require all participating SMEs to issue a letter of undertaking to confirm SME status. Any company that abuses its SME status will have administrative or legal actions taken against it by the authorities.
Since 2007, it has been policy to make government procurement greener. The Ministry of Finance and the General Administration of Environmental Protection jointly issued several rules to define the scope, products and procedures for green government procurement. So far, there have been 14 catalogues issued for certified environmental-friendly products. Governmental agencies at all levels must give preference to certified environmental-friendly products in carrying out government procurement.

Scope of rules

Entities covered

5. Which entities must comply with the procurement rules? Are there any exemptions?

Entities covered

Governmental departments, institutions and public organisations at all levels are subject to government procurement rules when they conduct procurement activities with fiscal funds. Companies (either state-owned or private-owned) are not covered by government procurement rules, because their procurements are normally not financed by fiscal funds. But they may be subject to the Bidding Law, if they invest in or develop construction projects in energy, mining, infrastructure and public utilities which bear on public safety and public concerns.

Exemptions

Chinese state-owned and private enterprises are not covered by government procurement rules.

Contracts covered

6. What contracts do procurement rules cover? Are there any exemptions?

Contracts covered

The GPL applies to contracts for procuring goods, services and construction projects, if the procurement contracts fall within the scope of the centralised procurement catalogue issued by the central or local governmental authorities or if the value of such procurement contracts exceeds the thresholds prescribed by the authorities (see Question 3). The procurement catalogues set forth the type and value of the specific goods, services or construction projects subject to government procurement and the catalogues are prepared and issued according to different industry and product lines, for example:
  • Computer and software.
  • Office furniture.
  • Vehicles.
  • Medical and healthcare.
  • Education.
If the goods, services or construction projects to be procured fall within the scope of the catalogues, then the procuring entity must follow the procedures and requirements under the GPL.

Exemptions

Military and emergency procurement contracts are not subject to government procurement rules. In addition, if the procurement is funded by loans from international organisations or foreign governments, the parties can choose exemption from government procurement rules.

7. Are there specific thresholds to determine if a contract is subject to the public procurement regime? Are there any aggregation/anti-avoidance rules?

Thresholds

The Ministry of Finance sets and promulgates the thresholds for procurements using the central budget. The provincial governments set and promulgate the thresholds for procurements using the local budget. Central and local governments have issued various procurement catalogues which are classified into different industries and product lines and the thresholds vary accordingly (see Question 6, Contracts covered).

Aggregation/anti-avoidance rules

No entity or individual can, by any means, deny or restrict free access to government procurement markets. Information on procurement opportunities must be released to the public in a timely manner through the public media designated by the authorities supervising the particular procurement.
Parties involved in government procurement cannot collude with each other to the detriment of the interests of the state, the public or third parties. Where the parties adopt a public tender or bid by invitations procedure (see Question 12) to conduct the procurement, the relevant procedures as set out in the procurement rules must be strictly followed. The parties cannot break up the procurement into small pieces or take other measures to circumvent the procurement rules.

Concessions

8. Does the procurement regime apply to concession contracts? If not, how is the award of concession contracts regulated?

A public concession generally refers to the legal scheme under which a non-governmental investor (either state-owned or private) is granted the right to invest, construct and operate a public infrastructure or utility project for a certain period of time. Under public concessions, public infrastructure projects are generally financed by the investors, as opposed to the government, therefore, procurement rules do not apply to concession contracts.
However, given the public interest attached to infrastructure or utility projects, concession contracts are generally awarded through a public tendering process in accordance with the bidding rules.

Privatisations and PPPs

9. Are privatisations and PPPs subject to the procurement regime? If not, what are the relevant legal rules?

Privatisations

Privatisations are generally not subject to the government procurement regime, but are governed by separate rules on the transfer of state-owned assets. The transfer of state-owned assets is generally subject to a public tender, auction or listing procedure at the designated state-owned asset exchange centre. In most cases, prior consent from the State-owned Assets Supervision and Administration Commission or its local counterpart is required.

PPPs

There is no established PPP legal scheme, although there are several rules and regulations governing build-operate-transfer (BOT) projects. Generally, government procurement rules do not apply to PPP or BOT projects, although these types of project are subject to Chinese bidding rules.

Shared services and “in-house” arrangements

10. Do shared services projects and “in-house” arrangements trigger the application of the public procurement requirements? Are there any exemptions?

Chinese procurement rules are silent on shared services projects. However, Chinese authorities tend to interpret the application of government procurement rules strictly. This means that if part of the shared service is financed by fiscal funds, it is arguable that the government scheme applies to the shared services project.

Procurement procedures

11. What procedures do regulated entities use when carrying out procurements? Can regulated entities freely choose between the procedures? When is it appropriate to use each procedure?

Available procedures

Under the GPL, the following methods are acceptable for government procurement contracts, depending on the specific situation:
  • Public tender.
  • Bid by invitation.
  • Competitive negotiation.
  • Sole source procurement.
  • Price inquiry.
  • Other procuring methods as determined by the governmental authority in charge of the procurement.

Freedom of choice

The authorities can choose one of the above six methods for government procurement, provided that the relevant conditions are satisfied (see Question 12). In practice, public tender and bid by invitation are the most widely used.

Suitability

There are certain scenarios which qualify for each choice of procedure (see Question 12 (Key features sections)).

Key features

12. What are the key features of each procedure? What are the applicable time limits?

Public tender

Key features. If the procuring entity adopts public tender for government procurement, the procedures and timelines in the Bidding Law with respect to pre-qualification, the issuance of the request for proposals (RFPs), bid preparation and submission, bid evaluation and the bid award to the successful bidder must be complied with. The procuring entity must issue the advertisement of contracts in the media designated by the National Development and Reform Commission to target unspecified potential bidders. The procuring entity can conduct a pre-qualification process to shortlist the qualified bidders. The pre-qualification documents and RFPs must be accessible and available to the public for at least five days. If less than three bidders pass the pre-qualification process or if less than three bidders submit bids, then the procuring entity must re-conduct the pre-qualification or bidding process.
The procuring entity can request that bidders provide a bid bond, to be submitted together with the bidding documents. The amount of the bid bond cannot exceed 2% of the estimated project value. The submitted bids are appraised by a bid evaluation committee, which consists of experts randomly selected from the relevant industrial experts database. The bid evaluation committee reviews the bids according to the bid evaluation methodology and criteria expressly set out in the RFPs. Except for the bid clarifications communicated to all participating bidders, the procuring entity cannot disclose any additional information to any particular bidders, nor can it negotiate the bids with the bidders.
Time limits. Generally, the procuring entity must give bidders at least 20 days to prepare and submit the bid. If the procuring entity needs to make amendments or give clarifications to the RFPs, the procuring entity must publicise an amendment or clarification notice in the media designated by the government at least three days prior to the deadline submission for pre-qualification documents, or at least 15 days prior to the bid submission deadline.

Bid by invitation

Key features. The procuring entity can conduct the government procurement using bid by invitation, if either (GPL):
  • The goods or services to be procured are of a special nature and can only be procured from limited suppliers.
  • The procurement cost would be too high if the procurement was conducted using a public tender.
Under a bid by invitation, the procuring entity must send the RFP to at least three bidders who are selected at random from qualified bidders.
Time limits. This is the same as for a public bid (see above, Public tender: Time limits).

Competitive negotiation

Key features. The competitive negotiation method can be adopted if either:
  • No qualified bidders can be found after a bidding process.
  • Due to technical complexities, it is impossible to determine the specifications or detailed requirements for the goods, services or projects to be procured.
  • The time requirement of the procuring entity cannot be met if a bidding process is adopted.
  • It is impossible to determine the total value of the procurement.
The procuring entity forms a negotiation team, consisting of representatives of the procuring entity and external experts in the relevant industry sectors. The negotiation team prepares the relevant contractual documentation and issues invitations to at least three qualified bidders for negotiation. The negotiation team negotiates with each bidder on a one-to-one basis. After the one-to-one negotiations, each of the invited bidders submits the final proposal within the prescribed period and the procuring entity will consider all different factors including non-procurement requirements, quality of goods and services, and price, to determine the winning supplier.
Time limits. There is no fixed time limit for the process.

Sole source procurement

Key features. If one of the following situations applies, the procuring entity may procure goods or services from a single source:
  • The goods or services can only be procured from one single supplier.
  • Procurement from other suppliers is impossible due to the occurrence of an unforeseeable emergency.
  • It is necessary to continue to purchase from the original supplier in order to ensure consistency or compatibility of ancillary services with the original procurement item, and the total purchase funds do not exceed 10% of the procurement amount in the original contract.
Sole source procurements must be carried out in accordance with the principles of ensuring that the government obtains a reasonable price and the goods and/or services are of a good quality.
Time limits. There is no fixed time limit for the process.

Price inquiry

Key features. The procuring entity can choose the price inquiry option for government procurement if the goods or services being procured are sufficient in supply and subject to little price fluctuation.
If the price inquiry method is adopted, the procuring entity must form an inquiry team, consisting of the representatives from the procuring entity and external experts. The inquiry team determines the potential suppliers and seeks quotes from at least three qualified bidders. Quotes given by bidders must be final and no further changes can be made. The inquiry team decides the winning bidder by taking into account various standards such as quality, price, service and other requirements.
Time limits. There is no fixed time limit for the process.

Technical specifications

13. Are there any requirements concerning technical specifications of tenders?

Under the GPL and the Bidding Law, the procuring entity can include certain technical standards or criteria required for the bidders. For example, the procuring entity may request the bidders to meet certain technical requirements including:
  • Technical skills.
  • Professional qualifications.
  • Past performance record.
  • Financial viability.
  • Track record of legal compliance.
The procuring entity cannot impose unreasonable conditions to discriminate against potential bidders or suppliers.

Alternative bids

14. Are there specific rules in relation to alternative bids?

The GPL is silent on alternative bids. However, under the Bidding Law, an alternative bid is generally deemed as a bid which does not respond to the bid call document and is therefore subject to the risk of being disqualified.

Contract award criteria

15. What are the requirements relating to contract award criteria?

Award criteria

The award criteria must be set out in the RFPs and neither the procuring entity nor the bid evaluation committee may adopt any other award criteria, unless otherwise expressly allowed in the RFPs (see Question 12). In China, there are two widely used methods for awarding the procurement contracts:
  • Lowest price evaluation.
  • Comprehensive evaluation.
The lowest price evaluation generally applies to procurement for goods or services adopting generic technology or specifications. Where the goods or services to be procured are technically complicated or subject to special specifications or standards, it is more proper to award the contract using a comprehensive evaluation.

After accepting the bid

Once the successful bidder has been selected, the procuring entity must enter into the procurement contract within 30 days after the issuance of the award notice. The procurement contract, which must be in writing, must be governed by the laws of the PRC. Within seven working days of signing, the parties must file a copy of the procurement contract with the relevant governmental authority.
Subject to the procuring entity’s consent, the winning bidder can subcontract certain work components to its subcontractors. The winning bidder is responsible to the procurement entity for the items procured, and the sub-contractor is responsible to the to the procurement party for the sub-contracted work.

Changes to an existing contract

16. Does an extension or amendment of an existing contract require a new procurement procedure?

Extension of contract

A procuring entity can purchase additional goods, projects or services from the original suppliers or contractors under the same terms and conditions by entering into a supplementary contract, provided that the additional procurement of the goods, projects or services does not exceed 10% of the original procurement amount (GPL).

Amendment of contract

After the government procurement is signed, no party can unilaterally amend or terminate the contract. However, if the implementation of the government procurement contract will damage the interests of the state or the public, then the parties can revise or terminate the contract as appropriate and the party in default must assume liability and compensate the other party for any loss or damage suffered.

Enforcement

17. Who can bring a claim for non-compliance with procurement legislation? What are the available review procedures? Are there any associated statutes of limitation?

Right to bring a claim

A bidder can bring a claim against the procuring entity by submitting written documents if it thinks that its rights or benefits have been infringed due to (GPL):
  • The terms of the RFP.
  • The procuring process.
  • The result of the bid award.
Under the GPL, only unsuccessful bidders have the right to bring claims by submitting supporting documents. The government authorities can make investigations if they are aware of any non-compliance or irregularity . The Implementing Rules of the Bidding Law have extended the right of claim to “other parties concerned”, in addition to unsuccessful bidders. The Implementing Rules do not give a definition of third parties concerned, but a general understanding is that this could be broad enough to include non-governmental organisations (NGOs).

Enforcement procedures

The claim must be lodged within seven working days after the supplier knew or should have known of the alleged infringement. On receiving the written claim from the aggrieved party, the procuring entity must provide a written response to the aggrieved party as well as all other suppliers involved. If the procuring entity fails to provide a response within the prescribed time period or if the aggrieved party is not satisfied with the response, the aggrieved party can lodge a complaint with the relevant governmental authority. The governmental authority must give a decision within 30 working days from the receipt of the complaint.
If the aggrieved party is not satisfied with the administrative decision given by the governmental authority, it can petition for an administrative review or initiate an administrative lawsuit in the courts. To do so, the aggrieved party must submit the application for administrative review within 60 days (unless the time limit for application is more than 60 days, as prescribed by law). Generally, the higher-level authority completes the review and gives its decision within 60 days, although this can be extended by 30 days for complicated matters.
If the aggrieved party is not satisfied with the review decision or if the higher-level authority fails to give its decision within the prescribed period of time, then an appeal can be made to the people’s court to initiate an administrative lawsuit. The legal proceedings normally take three months, unless special or complicated circumstances justify a longer trial period.
During any appeal period, the government procurement supervision authority may request a suspension of up to 30 days of the procurement, taking into account the specifics of the scenario.

Statutes of limitation

See above, Enforcement procedures. The parties may be time-barred from bringing legal action if they fail to comply with the time requirements under the Judicial Interpretations of the Administrative Procedural Law. In general, the time limit for initiating an administrative legal action is two years, calculating from the date on which the claimant knew or should have known of his right of administrative claim. However, the claimant will be completely time-barred if he fails to start the legal action within five years after he knew or should have known of his right of administrative claim.

Reform

18. Are there any proposals for reform of the procurement legislation? If so, when are they likely to be implemented?

There has been a public outcry from suppliers, contractors, governmental agencies, practitioners and scholars about issues such as lack of cost efficiency and transparency arising from government procurement activities. The draft Implementing Rules of the GPL have been circulated to the general public for comments and the promulgation of the Implementing Rules of the Bidding Law is likely to increase pressure to finalise the Implementing Rules of the GPL. Even though there is no fixed time limit, it is anticipated that it will not be long before the final version of the Implementing Rules of the GPL will be promulgated.
India
Source: I Commerce Central

Public procurement plays a vital role in the socio-economic development of a country. Transparent Public Procurement is quite essential for judicious utilization of the taxpayers’ money. Lot of efforts has been made by the Government of India to enhance transparency in Public Procurement. Technology is widely used in bringing the transparency in governance. An effort has been made in this paper to through light on the End-to-end e-procurement system, which is considered as one the best initiative taken by the Government of India to enhance transparency in public procurement.

Keywords

Public Procurement; Transparency; E-Procurement

Introduction

Public expenditure is must for the growth and development of the country. It is very important for the emerging nations to allocate lot of budget on developmental activities. Mere allocation of budget is not enough; it should be spent judiciously for the given purpose. Management of the public expenditure is a very difficult task. A major part of the Indian GDP is spent on public procurement. Efforts are being made by Government of India to give value for money of the tax payers’ money. Ministry of Finance, Govt. of India has taken several initiatives in the recent past to enhance transparency in public procurement.

The Public Procurement Bill [1] was introduced by the Ministry of Finance in the Parliament on May 14, 2012. This Bill seeks to regulate and ensure transparency in the procurement process. The bill is applicable for all the procuring entities of ministries and departments of the central government, central public sector undertakings, and companies in which the government has a stake of more than 50 percent. This Bill shall not apply to procurements which are less than Rs. 50 lakh, emergency procurements made for , and procurement for the purpose of national security.

The basic norms that the procuring entity shall adhere to: (a) ensuring efficiency, economy and transparency; (b) provide fair and equitable treatment to bidders; (c) promote competitiveness; (d) ensure the quality is consistent with the price of the bid; and (e) prevent corruption. The Bill also defines a Code of Integrity for the procuring entity or Central Purchase Organization (CPO) as well as the bidders. It prohibits acceptance of bribe, collusion, misrepresentation, coercion or threat, and obstruction in the auditing process of the procurement made.

The Government of India had constituted Expenditure Management Commission (EMC) in September, 2014 to look into various aspects of expenditure reforms to be undertaken by the Government. The committee was headed by Dr. Bimal Jalan, eminent economist. The committee opined that “e-procurement has some obvious advantages such as savings in time and cost, the concerns relating to security and transparency need to be adequately addressed”. It is recommended that initiatives towards e-procurement be strengthened and made more robust and that the features of e-procurement portals are duly certified and audited as per the guidelines of Department of Electronics & Information Technology.

An attempt has been made in this paper to highlight the end-to-end e-procurement system, which can be considered as landmark initiative in enhancing transparency in public procurement [2].

Government E-Procurement System of National Informatics Centre (GEPNIC)

The Central Public Procurement Portal (https://eprocure.gov.in/eprocure) is launched by NIC on behalf of Department of Expenditure, Ministry of Finance, and Government of India. It is known as Government e-Procurement System of NIC (GePNIC). This is generic software which can be used by the Central Government Departments and Organizations. All kinds of procurement activities such as goods, works and services can be processed on through this portal. It enhances transparency in all activities relating to tendering process and non-discrimination amongst bidders. Tender documents can be accessed free of cost by the prospective bidders.

Facilities Provided on CPP Portal

The following facilities are made available on CPP portal:

• Online registration of procurement entities and vendors: Procurement entities as well as contractors and suppliers must enroll on the CPP portal using Digital Signature Certificate (DSC).

• Tender creation and publishing: It facilitates procuring entities to create the and publish tender online by providing key information of the tender such as bid submission and opening dates, pre-bid meetings, nature of procurement, tender values, EMD, tender fees, tender validity, etc. The whole document of Notice Inviting Tender is to be published in pdf format.

• Publishing of corrigendum and pre-bid meeting decisions: Sometimes procuring entities need to modify the tender documents, after floating the bids on CPP portal. Under such circumstances, there is also provision for procuring entities for issuing corrigendum on the portal.

• Online bid submission, resubmission, and withdrawal of bids: Bidders need to submit the bids online as per the requirements of NIT. There is also provision for resubmission of bids for ‘n’ number of times as well as the bids can be withdrawn before the bid closing date and time. All the documents are to be digitally signed. The bidder gets an online acknowledgement on submission of the bids online.

• Online tender opening: Bids can open on or after the date and time of opening bids by the authorized officials through DSC. Each activity is time stamped with server time. All the bids can be seen and saved locally for evaluation and further processing. After opening the bids, the bidders will be able to see the bids of other bidders also.

• Publishing technical and financial evaluation: After opening, bidders are selected for respective technical and financial evaluation. Bid documents are downloaded and given for evaluation and the recommendations of the committee are updated. Automatic comparative charts are generated for the price bids prepared from the templates available on CPP portal [3]. The system sends SMS and mail to the bidders about the bid opening, bid evaluation, financial bid opening and award of contract.

• Award of the contract: Selection of a bidder he is to be officially notified on CPP portal. The letter called Award of Contract will state the contract price.

Benefits of E-procurement

E-procurement ensures secure online bid submission and access to bid opening event to the procuring entities, as well as bidders from any place on 24 x 7 bases. The system, which is being progressively used since the year 2007 [4]. Important benefits of E-procurement compared to offline tendering are as under:

• Wide publicity: The tender document gets wide publicity as it is mandatory for government entities to publish tenders on CPP portal. The vendors can easily find the tenders in which they can participate. Tender search option on CPP portal enables the bidders to search by using filters such as tender by nature of product/service, tenders by organization, tender by date etc. The vendors need not to search for tenders in several daily newspapers, which is a tedious and time consuming search. All tenders are not published in newspapers as it is not mandatory to publish tenders valuing less than Rs. 25, 00,000 for procurement goods and Rs. 10, 00,000 for procurement of services as per GFR 2005.

• Easy to participate: For the vendors it is quite easy to participate in the public procurement tenders floated on CPP portal. All the required documents are to be scanned and uploaded. The system generates an acknowledgment for submission of the online tender. There is no need to submit documents by post, there are no worries of postal delays. It is less expensive and less tedious work to submit the bids online. Micro and Small enterprises registered with NSIC can submit bids free of cost as they are waived from payment of Tender Processing Fee and Earnest Money Deposit. Central ministries or departments may relax the condition of prior turnover and prior experience in public procurement subject to meeting of quality and technical specifications.

• Large number of bidders: The procuring entity can expect more number of bids for online tenders, as it is widely publicized and it is easy for the vendors to submit bids. However, in the initial stages there are teething problems of resistance to change and adoptability to the online tendering.

• Transparency: Transparency is the need of the hour in public procurement. One bidder can see the bids submitted by the other bidders. Hence, the procuring entity cannot discriminate any bidder. All the bids are evaluated as per the tender norms.

• Check on corruption: There is a possibility of corruption in offline tenders. But this problem does not persist under e-procurement.