Status of the Electronic Procurement in Korea and Future Tasks
January 2003
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1. What is the GePS?
2. Overview of the procurement in Korea
3. How to promote the GePS - Success factors
4. Major contents of the GePS
5. Detailed job improvement through the GePS
6. Expected effects of the GePS
7. Future tasks
Table of Contents
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A system that digitally processes complicatedA system that digitally processes complicated procedures and paperwork procedures and paperwork
Digitalizing all the procedure from purchase request to payment
Removing or drastically reducing documents
27,000 public organizations and 70,000 companies use27,000 public organizations and 70,000 companies use the system the system
Government e-Procurement System
1. What is the GePS?
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Centralized procurement system
Where goods, services and construction works exceeds a certain amount has to be entrusted to the Public Procurement Service or PPS
To enhance transparency and save national budget
The amount of the public procurement : $56 billion
PPS handles about 30% of the total public procurement
※ The total public procurement takes about 47% of the entire government expenditure
2. Overview of the Procurement in Korea
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Step-by-stepapproach
Government-widesystematic promotion
President’s strong will
3. How to promote the GePS - Success factors
Internetinfrastructure
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3.1. President’s strong will of ‘Powerful IT Country’
“I am going to make Korea the best IT nation in the world
to build solid foundation of IT country.” (1998 Inauguration)
Adopting a national-wide strategy : Cyber Korea 21(1999~2002)
To build the knowledge-based nation through on-line
To improve national competitiveness and quality of life
To develop as one of the top 10 advanced IT countries
3. How to promote the GePS - Success factor(1)
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3.2. Set up a government-wide promotion system
Organizing ‘e-Government Special Committee’ (Nov.
2001) Under the direct control of the President Consist of officials and private sector specialists Vice minister level officials : planning and budget Private sector specialists : applying new IT technology
Selecting 11 tasks for e-Government Comprising civil service administration, procurement, taxation, education, social insurance, etc The GePS is one of the most important tasks
3. How to promote the GePS - Success factor(2)
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3.3. Step-by-step approach BPR/ISP※ by Ministry of Planning and Budget(MPB)
With a neutral and balanced view MPB has budgetary authority ※ BPR/ISP : Business Process Reengineering/Information Strategic Planning
System building by PPS With rich e-procurement experiences
PPS has developed EDI/EC* system since 1997 With accumulated work experiences and knowledge as the central procurement agency for the past 50 years ※ EDI/EC : Electronic Data Interchange/E-Commerce
3. How to promote the GePS - Success factor(3)
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3.4. Well-developed Internet infrastructure
No. 1 in Internet Connectivity
Internet users : 25 million
Broadband internet subscribers : 10 million
70% of total households
Top Internet using rate in the world
Stock trading, internet shopping, etc
3. How to promote the GePS - Success factor(4)
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4. Major Contents of the GePS
end-user
operationagency
Suppliers
UseUse
Certification-Related agencies
Ministry of GovernmentAdministration
And Home Affairs
Construction-relatedAssociations
Korea Financial Telecommunications& Clearings Institute
Suretyinsurance
Ministry of FinanceAnd Economy
Construction CALS
LinkageLinkage
Linkage
PortalPortal
IntegratedIntegratedNoticeNotice
Commercial Commercial Products Products catalogcatalog
Contracted Contracted productsproductscatalogcatalog
Goods Goods classificationclassification
systemsystem
Documents distribution and outside linkageDocuments distribution and outside linkage
User registration User registration
suppliers’ suppliers’ performanceperformance
e-Guaranteee-Guarantee
e-payment e-payment
e-Procurement systeme-Procurement systeme-Procurement ASPe-Procurement ASP
Supplier supporting serviceSupplier supporting service
Unit contract systemUnit contract system
4.1 System architecture(1) - linked to 30 outside systems
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4.1 System architecture (2)
Applying e-signatureApplying e-signature
In association with 6 authorized certification
agencies
Securing the stability of on-line transaction Abolishing the submission of documentsAbolishing the submission of documents
By sharing various information including suppliers data
Enhancing convenience of suppliers
4. Major Contents of the GePS
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4.1 System architecture (3)
Electronic handling the various contract-related bondsElectronic handling the various contract-related bonds
By being connected with 11 guarantee agencies
On-line submission of bonds for prepayment, tenders, performance, etc.
Realizing real-time electronic paymentRealizing real-time electronic payment
In association with 13 major commercial banks
Shortening payment time
4. Major Contents of the GePS
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4.2 The GePS technology base
Adopting encryption technology based on public key infrastructure and digital certification
Based on the world-wide standards of e-document (XML, SOAP, EBMS, etc)
A point-in-time confirmation service and an individual ID confirmation service
Combination of information protection technologyCombination of information protection technology and a new e-commerce modeland a new e-commerce model
4. Major Contents of the GePS
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4.3 Major functions of the GePS
All the bid-info is required to be placed on the GePS 81% of bids were conducted electronically (As of Dec. 2002)
Providing integrated domestic bidding informationProviding integrated domestic bidding information
Covering the whole procurement processes on the internet
From specification review to payment
Accessing to standardized commodities and supplier’s info
Information on 420,000 goods, and 70,000 suppliers Purchasing of commodities pre-contracted by PPS
4. Major Contents of the GePS
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4.3 Major functions of the GePS (www.g2b.go.kr)
4. Major Contents of the GePS
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Use registrationIntegrated Notice
Informationsharing
Before After
5. Detailed job improvement through the GePS
5.1 Integrating the supply of bid Information
PPS
PublicOrganization
Suppliercompany
Construction- RelatedAssociations
Registration
Bid Info.
Bid Info.
Registration
Suppliersinformation
PPS
PublicOrganization
PublicOrganization
Construction- RelatedAssociations
Suppliercompany
The GePS
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5.2 Simplification of documents and prompt e-Payment
Financial officer
Inspectionofficer
Paymentofficer
Suppliercompany
6.Payment request
4. D
eliv
ery
confi
rmat
ion
1.Delivery3.Deliveryconfirmation
2.Request of inspection
5.Payment request
7. National treasury check/paym
ent2D
elive
ry
confi
rmat
ion
and p
aymen
t req
uest
3.Payment handling
1.Request of delivery
and payment
Paymentofficer
Inspectionofficer
SupplierCompany
Before After
5. Detailed job improvement through the GePS
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5.3 Expanding the range of commodity selection
1.Request for quotation
Public Organization
Suppliercompany
Suppliercompany
Supplier company
Supplier company
Public Organization
3.Order Placement3.Order
placement
2’.On line quotationsubmission
e-Cataloge-Catalog2.Search 1.Product
registration
Before After
2. Quotation Submission(off-line)
5. Detailed job improvement through the GePS
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5.4 Standardization of the classification of commodities
Before
Different item classification/attributes/management
system
PPS classification
Publiccorporation
classificationDefense
Classification
Application of differentsystem
PPS
Localgovernments
Othergovernment
agencies
BasedOn
UNSPSC
Application of standard classification/attribute
system
PublicOrganization
After
5. Detailed job improvement through the GePS
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Competitiveness
Efficiency
Transparency
6. Expected effects of the GePS
Policy making
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By blocking up face-to-face transactionsBy blocking up face-to-face transactions Making public in real time of the status where the Making public in real time of the status where the
procedure goesprocedure goes Disappearance of prearranged biddingDisappearance of prearranged bidding
By enhancement of suppliers’ competition
※ The number of bidders increased by three times after the e-bid started
Centralized system to avoid duplicate system development
6.1 6.1 Enhancement of transparency
6.2 Saving of government budgetSaving of government budget
6. Expected effects of the GePS
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Stimulating the e-commerce in the private sector
Inducing the competitive environment in price and quality
Unification of commodity classification system will also help
Obtaining the statistical data of public procurement
6.3 Strengthening corporate competitiveness6.3 Strengthening corporate competitiveness
6.4 Improving government procurement policies6.4 Improving government procurement policies
6. Expected effects of the GePS
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The Government e-Procurement
System(GEPS)
Enhancement of PPSexpertise in procurement
Focusing on stable system operation
Maximizing customersatisfaction
7. Future tasks(1)
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System securities strengthened against hacking possibilities
User training to spur on the public e-procurement
Continuous system upgrading to renew the functions
Improving the reliability of the GePS contents
Broadening the product choices
Developing more flexible contract methods
7.1 7.1 Focusing on stable system operation
7.2 Maximizing customer satisfaction7.2 Maximizing customer satisfaction
7. Future tasks(2)
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Strengthening procurement-related consulting Strengthening procurement-related consulting
servicesservices
Developing new contents for price, products, etcDeveloping new contents for price, products, etc
Working out new managerial expertise in various Working out new managerial expertise in various
areasareas
IT, research service contract, etcIT, research service contract, etc
Settlement of contract disputes in e-procurementSettlement of contract disputes in e-procurement
7.3 Enhancement of PPS expertise in procurement7.3 Enhancement of PPS expertise in procurement
7. Future tasks(3)
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Great impact on anti-corruption and enhancement ofGreat impact on anti-corruption and enhancement of transparency transparency
Sharing know-how of the GePS with other countriesSharing know-how of the GePS with other countries
Training program, system building, problem solvingTraining program, system building, problem solving
Maximizing the benefits of the GePSMaximizing the benefits of the GePS
e-bid, e-shopping, e-payment, sharing informatione-bid, e-shopping, e-payment, sharing information