The term Public eProcurement ("electronic procurement" in the public sector) refers, in Singapore, Ukraine, Europe and Canada, to the use of electronic means in conducting a public procurement procedure for the purchase of goods, works or services.
eProcurement compared to normal procurement allows greater transparency, better competition and easier communication for all parties.
Benefits of public eProcurement
Benefits of Public eProcurement can differ from benefits of electronic purchasing in private sector. Governments objective is not only cost efficiency but also obtaining the best value-for-money because of a high impact of public procurement on the market and the society. Commonly discussed benefits of the eProcurement in the public sector are as follows:
Transaction costs reduction – Electronic automation of processes is supposed to replace various phases of procurement processed manually. It can significantly reduce wage costs, printing costs and make communication much easier for both contractor and supplier. There have been various studies estimating these cost savings. Potential administrative cost savings estimates are between 58 – 70% in IT purchases.
Barriers to entry reduction – Electronic auction is a significant factor increasing the probability that the tender will be awarded to a SME company. It is also a significant factor increasing amount of offers in the tender. These aspects might be caused by smaller requirements of electronic tenders on the companies' capacity. Corruption control – eProcurement is considered to be suitable tool to prevent corruption as it can make tender process easier to monitor. Electronic tools are also believed to reduce amount of mistakes or errors made by humans involved.
Phases
The term of the Electronic Public Procurement can be defined as the usage of e-Government platform over the electronic resources (Internet and Web-based applications) to conduct transactions for purchasing the products and services from suppliers to authority's buyers.
The following sub-phases of the electronic public procurement process could be identified: eSourcing: Preparatory activities conducted by the contracting authority/entity to collect and reuse information for the preparation of a call; potential bidders may be contacted, if admitted by the legal rules, by electronic means to provide quotations or manifest interest. eNoticing: Advertisement of calls for tenders through the publication of appropriate contract notices in electronic format in the relevant Official Journal (national/EU); electronic access to tender documents and specifications as well as additional related documents are provided in a non-discriminatory way. eAccess: Electronic access to tender documents and specifications as well support to economic operators for the preparation of an offer, e.g. clarifications, questions and answers. eSubmission: Submission of offers in electronic format to the contracting authority/entity, which is able to receive, accept and process it in compliance with the legal requirements. eTendering: The union of the eAccess and eSubmission phases. eAwarding: Opening and evaluation of the electronic tenders received, and award of the contract to the best offer in terms of the lowest price or economically most advantageous bid. eContract: Conclusion, enactment and monitoring of a contract / agreement through electronic means between the contracting authority/entity and the winning tenderer. eOrders: Preparation and issuing of an electronic order by the contracting authority/entity and its acceptance by the contractor. eOrder Status: Preparation and delivery of status information against the eOrder. eInvoicing: Preparation and delivery of an invoice in electronic format. ePayment: Electronic payment of the ordered goods, services or works.