Electronic Procurement in 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 entity’s 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

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


Jan, 2011
Sept, 2011

4 -

2 19 21

1x9 2009 to 2011 94 Sept, 2011

Total (16 e-GP portals)




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 user’s name and password User’s 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

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).