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Electronic procurement administration

Electronic Procurement Administration System (EPAS)
 
1. Definition of the EPAS
 
Electronic procurement administration (EPA) refers to the adoption of electronic commerce techniques by governments and public organizations to facilitate the tasks and activities of procurement. Typical features of procurement include placing purchase requests, bidding, signing and submitting contracts, and making payments to contractors. At least one of the many features of procurement must be done electronically via an information communication network in order for a procurement system to be considered electronic.[1]
 
(1) Evolution of the EPAS
The conventional system of procurement administration carried with it a number of problems. The frequent contacts it required between contractors and public officials hampered the transparency of key aspects of the procurement process, such as bidding and payments. As contractors were required to prepare multiple copies of the same documents for registration or evaluation, the process posed a significant financial burden as well. Thus, efforts began to be made to develop an EPAS that would solve these problems and enhance the productivity of procurement administration. In South Korea’s case, however, these efforts were first geared toward the development of individual electronic data interchange systems (EDISs) by different organizations.

The EDISs created by different organizations processed only parts of the procurement process electronically. The Public Procurement Service (PPS) released its EPA plan in 1996 and launched an EDIS to that end. The Ministry of Defense and a number of public corporations, such as the Korea Electric Power Corporation and the Korea Housing Corporation, also began to automate parts of their procurement processes. Having successfully completed the trial EDIS in September 1999, the PPS launched the General Open Bidding Integrated Management System (GOBIMS) in January 2001, and began to provide open bidding services for various public organizations. A new e-mailing system was also set up to facilitate small purchases.

The decentralized state of the EPA, with a system that was developed without a comprehensive re-envisioning of the entire procurement process, required much improvement in terms of convenience and efficiency. The absence of connection among the internal administrative information systems (for electronic payments and financial information) of different public organizations and the EPASs they used also made it necessary to enter the same information manually and repeatedly. Moreover, the lack of a centralized window for public procurement services also limited contractors’ ability to gather information on multiple public organizations and required them to register repeatedly with multiple organizations. Finally, the absence of a standardized EPAS led to the overlapping and waste of investments by public organizations.

In an effort to address these problems, development of the National General Electronic Procurement Administration System, or G2B, became one of 11 core projects in 2001 focused on achieving an e-Government. The G2B development project involved redesigning the existing procurement procedure so that all its parts could be processed online. Moreover, the project led to the creation of a single service window to enhance the efficiency and transparency of public procurement. This new, centralized window would serve as the single main point of contact with contractors and contractor candidates. With the completion of the G2B, contractors could now access the entire range of information they needed through the online service window, and register only once to gain the right to take part in government biddings. The new online system also enabled contractors to monitor the progress of procurement on a real-time basis.

The new EPAS also involved the development of application service providers (ASPs).[2] Public organizations and contractors no longer needed to develop and run their own EPASs; rather, they could access the G2B online and carry out their tasks according to a standardized operating procedure. The G2B emerged as a procurement portal, carrying out purchases and procurement for different units and agencies of the central government.

Finally, the product classification program of the new EPAS was based on the United Nations Standard Products and Services Code (UNSPSC) to ensure international compatibility.[3] Open administrative and technical standards were applied not only to the product classification system, but also to the management of public organization ID codes and electronic documents in order to guarantee the expandability and interconnectivity of the G2B in the future.
The G2B development project was completed successfully, and the era of EPA finally dawned on September 30, 2002, with the official launching of the G2B.
 
G2B Structure
[Figure 5-5] G2B Structure
 
(2) G2B and its Effects
 
The G2B processes all aspects of public procurement and contracts online, including the registration of contractors, biddings, the signing and submission of contracts, and payments. With the G2B, contractors need only register once in order to gain the right to participate in public organization biddings and access the entire range of required information. Public organizations can use the G2B like their intranet system, electronically handling all records pertaining to procurement. In the case of central procurement, online services were provided by connecting the standardized G2B system to the DIS at the PPS.

As shown in Figure 5-5, the G2B consists of a number of subsystems, namely, the electronic procurement processing system which oversees ASPs for public organizations, supports the electronic transactions of contractors, and enables a competitive contract system for G2B operators; the G2B portal; the public announcement system; the product list system; the contracted products catalog system (according to the new classification system); the market products catalog system (according to the new classification system); the user registration and management system; the electronic warranty system; the electronic payment system; the system for referencing contractors’ records and human resources; and the system for circulating documents and connecting to outside systems. Using these subsystems, the G2B processes user registrations, bidding announcements, biddings, contracts, payments, contractor references, and all other aspects of the procurement process online.

<Table 5-12> Main Benefits of the G2B

Electronic procurement services for contractors via a single window:
  • Contractors receive public organization bidding announcements (contractors can customize their settings to receive notices and information only on biddings in which they are interested)
  • Contractors register only once to gain access to all public organization biddings
  • Contractors’ records and information can be referenced insofar as allowed by law
  • Open bidding, contracting, and payment processes
  • Contractors can upload their goods and services into the product catalog for advertising purposes
  • Easy access to the existing EDIS
ASPs process procurement electronically on public organizations’ behalf:
  • Easy and efficient product searches thanks to the Mapped List of Procured Goods and Services
  • Electronic processing of bidding, contracting, and payments
  • Supports easy decision-making with readily available information on products for price or private contracts
  • Quotes and prices exchanged and negotiated online
  • Easy access to other internal systems (for electronic payments, budget information, etc.)

 
The G2B uses the public key infrastructure (PKI)-based electronic signature system and document security policy,[4] as well as the ebXML standard for electronic documents, and a SOAP-type document circulation program. It is a massive, Java-based Web channel of services. The G2B has made the EPA much more reliable and accessible. Official electronic signatures are applied to all tasks, and vital documents can be received and viewed only on recipients’ registered computers so as to ensure the security and confidentiality of information end-to-end.

 The G2B also relays information and enables access to 30 or so outside systems to enable the sharing of information and user services. While documents and data can be shared with individual users via the standard electronic payment system or the XML-standard electronic document system, the G2B also provides access to other systems for certification, payment, and so forth.


The main users of the G2B are contractors and public organizations. Public organizations can be again divided between the PPS and other public organizations. The PPS not only administers the G2B, but also itself uses the G2B to carry out procurement tasks on behalf of other government organizations.
 

 
[1] The concept of electronic commerce was first articulated in a public procurement project run by the US Department of Defense in 1989. The US federal government officially adopted the term to describe the functions of its purchase and procurement programs in 1993 (Choi and Yoo, 2003: 342).
[2] Application Service Providers (ASPs): provide software programs for users via a network designed to enable the collection, maintenance, management and distribution of software and data from a central location.
[3] UNSPSC: a taxonomy of goods and services for electronic commerce, co-developed by the United Nations Development Program and the Electronic Commerce Code Management Association of the United States.
[4] Public Key Infrastructure (PKI): a technology which allows the sender and the recipient to achieve perfect codification in terms of verification, non-repudiation, etc., each using different sets of public and private keys.

Source: Korea Institute of Public Administration. 2008. Korean Public Administration, 1948-2008, Edited by Korea Institute of Public Administration. Pajubookcity: Bobmunsa.