ENDTOEND ELECTRONIC PUBLIC PROCUREMENT DIGITAL PROCUREMENT CYCLE Open

END-TO-END ELECTRONIC PUBLIC PROCUREMENT - DIGITAL PROCUREMENT CYCLE Open Government, Gdansk, April 2018

1. Objectives of the presentation TABLE OF CONTENTS 2. End-to-End e. Procurement Concept 3. Digital Procurement Cycle Model 4. Implementation Plan 5. Results of Pilot 2

Objectives of the presentation To present main ideas behind Open Data Open Source & OCDS end-toend electronic procurement implementation Objectives To understand benefits of Open Government approach for public procurement and public sector managers 3

Why e. Procurement reforms? Goal: implementing e. Procurement in compliance with the 2014 EU Directives on Public Procurement and with the aim to: Increase transparency through end-to-end public procurement cycle*, from planning to payment Increase efficiency and value for money in the procurement processes Reduce transaction costs for ALL stakeholders, but SMEs in particular 4

Benefits of e. Procurement What is e. Procurement? Paper-based procedures Online workflows and electronic tools are replaced by Main benefits 1 2 Increase transparency Increase speed and competition of procurement procedures 3 Reduce transaction costs for public contracts for all stakeholders Main characteristics e. Procurement procedures are conducted online and recorded for audit in real time – offline elements can be allowed, if needed There is an unrestricted and free of charge online access to procurement information There is automatic submission financial proposal mechanism which evaluation, with enables proposals scoring system for and offers to be technical evaluation submitted via available online to online interactive tender committee form linked to databases 5

Pillars of e. Procurement implementation The e. Procurement reform requires structural transformation of three pillars: Definition of concept – single or multi platform implementation Legal Remodelling of business processes Definition of change management and users’ training activities Public Procurement Law amended to comply with 2014 EU Directives New secondary legislation to enable digital procurement cycle Digital Procurement Cycle Business Technology Cloud or no cloud and other infrastructure decisions Design interoperability within e. Government systems Implement e. Procurement portal and transaction tools 6

Public procurement thresholds The legal reform is aimed at making the public procurement legal framework more efficient while compliant with the 2014 EU Directives and WTO GPA rules: High Value Contracts – international trade thresholds Mandatory to apply all 2012 WTO GPA rules and 2014 EU Directives Low Value Contracts– above national public procurement law thresholds Public Procureme nt Mandatory to apply the 2014 EU Directives principles: transparency, competition, nondiscrimination, and proportionality, Micro Value Contracts– below public procurement law thresholds National public finance management regulation may require transparency and competition 7

Changes to legal framework Primary and secondary legislation needs to be redrafted according to the procurement thresholds in national legislation: Legal thresholds Amendments needed PPL 313 Regulations Ministerial Orders Micro value procurement NO YES Small value procurement NO YES High value procurement YES YES 8

To succeed in the e. Procurement implementation Business and Technology decisions and actions shall be conducted on an integrated framework in order to ensure that they are fully aligned: Legal Digital Procurement Cycle Business Technology 9

Main Concepts behind Open Government Model Networking multi-platform system, including CENTRAL DATABASE UNIT integrated with e-government and Networking Electronic Procurement Platforms operated by existing providers of electronic procurement services e. Procurement scheme will seek efficiency through the reuse of existing Open Source and Open Data tools whenever possible and a sustainable users’ fees Costefficient e. Procurement process covers entire public procurement process, from procurement planning to invoicing and payments under public contracts Multiplatform hybrid model Key features of Digital Procurement Cycle End-to-end electronic public procuremen t Open Source Open Data Open Contracting Interoperabl e with e. Governme nt services Central Database Unit applications will be Open Source and Open Data fostering transparency and accountability by incorporating Open Contracting Data Standard (OCDS) Central Database Unit designed to ensure interoperability with existing and future e. Government services and digital public registers, local and EUbased 10

Why. Networking Multi-platform Model? A comparative analysis of international best practice on electronic public procurement was conducted by the EBRD between 2014 and 2017 and identified that Open Data and modular architecture is the future! Single platform scheme Multi-platform scheme e. Procurement Central Unit Transaction Front-end 1 Transaction Front-end Contracting Authorities Economic Operators CA 1 EO 1 Transaction Front-end N CA N EO N Legend Government owned Private owned Procurement agents 11

Reasons behind decision on networking multi-platform model Research of successful implementations identified the following benefits and drawbacks: Single platform scheme + Easy end-to-end management of the global procurement process + Simplified integration with other e. Government systems + Better suited to countries with low e. Government services maturity — High initial investment — Single supplier may exploit its monopolistic position — Discourages innovation and future enhancements — High dependency on a single system and a single provider (security breaches, provider drop-out, etc. ) Networking multi-platform scheme + Low development, implementation and maintenance costs + Encourages competition between e. Procurement platform providers + Risk is shared between platform suppliers + Platform providers encourage participation of EO in PP processes + Central unit manages and replicates all information to the multiple e. Procurement platforms — Complex management of the e. Procurement environment — Need for a private offer of e. Procurement platforms 12

Open Government Networking Multi-Platform Model: highlights Open Source, Open Data and OCDS decreases cost of implementation, maintenance and future development Encourages competition between networking electronic procurement platform (NEPP) providers because they are access point for contracting authorities and suppliers Shared cost and implementation risks between government operating Central Database Unit and NEPPs Networking Multi-platform Scheme Central Database Unit Networking Electronic Procurement Platform 1 Government through Central Database Unit manages legal compliance and transparency and accountability requirements Contractin g Authority 1 Economic Operator 1 Networking Electronic Procurement Platform N Contractin Economic g Authority Operator N N Access to e. Procurement service is free of charge for ALL contracting authorities Legend Government operated Commercial providers Procurement stakeholders 13

e. Procurement Coverage The system has the aim to cover all public procurement in Moldova. In that sense, it covers all functions from two points of view: Coverage of public procurement cycle End-to-end electronic public procurement DIGITAL PROCUREMENT CYCLE Coverage of public procurement procedures All procedures available by Law 14

Digital Procurement Cycle Pre-tendering Identificatio n of needs Tendering Post-tendering Receipt of products or services Public Contract Call for bids or quotes Expiration of guarantee Low Volume, High Value Planning Preparation Selection Execution Performance Guarantees Purchasing Reporting on procurement results Tendering High Volume, Low Value Ordering from Framework Agreement Contract Management 15

e. Procurement main characteristics The main modules and characteristics of the Central Database Unit are depicted as follows: e. Planning The Central Database allows for real-time communication and Central information exchange Database within all e. Procurement platforms, while keeping full traceability of the public procurement process Integration with e. Government tools to take advantage of a e. Government modern and already tools tested e. Government environment, which reduces the need of Government deploying other alternative solutions registers Integration with several government registers in order to reduce the need of inputting information manually and automatise administrative checks e. Planning allows Contracting authorities to better organise their procurement needs and aggregate purchases to maximise efficiency e. Contract Management e. Auction This module allows the control of the contract execution, including the launch of second competition procedures within framework agreements, payments and invoicing Advanced e. Auction functionality that allows not only for evaluation based on lowest price criteria but also for other quality criteria and a semiautomated evaluation of bids 16

Digital Procurement Cycle in Pilot in Moldova MTender - Several modules, distributed among Central Database Unit and Networking Electronic Procurement Platforms cover the entire public procurement cycle. The interaction between modules is the following: Allocation of the module Central Unit Networking Electronic Procurement Platform e. Government tools Phase of the procurement lifecycle Pre-tendering Tendering Posttendering 17

Implementation Plan in Moldova The e. Procurement system will give coverage to the following procedures: All mandatory procedures according to national law and the 2014 EU Directives Phase 1: 2017 Pilot and 2018 Roll-Out • Open tender • Restricted tender • Request for price quotation • Framework Agreement • Dynamic Purchasing System • Single source procedure e. Auction for small value contracts and in second stage competition Phase 2 scheduled for 2019 • Market consultations • Negotiation with publication • Negotiation with multiple bidders 18

e. Procurement pilot development The e. Procurement reform has been designed to be implemented in two stages: Pilot Full Deployme nt Test the e. Procurement system in a low risk environment Test micro and small value procedures Partial implementation of newest e. Procurement features Train users in the use of e. Procurement Full coverage of the public procurement cycle Connection to government registers Full coverage of the public procurement processes Full integration with e. Government services Implementation of aggregated demand mechanisms 19

How Open Data and Open Contracting Data Standard helped to implement digital procurement cycle Procurement Plan and PINs Tenderin g MTender Awardin g Digital Online Contract s Contract Management and Payments Contract Record in the Contract Register • Digital public procurement cycle • Open Market Access: big and small business OCDS • Open Data benefitting market analysis, reporting, monitoring and audit of public procurement 20

Implementation plan approach The approach to the e. Procurement Reform Implementation plan is based on 5 axis: PROCESSES IT Before the implementation of the e. Procurement system, an updated, standardised and uniform business process for public procurement has to be defined in compliance with international trade obligations of Moldova. e. Procurement is necessarily linked to IT solutions that support its different stages and integrate with other e-government services. The legal framework is a necessary condition for the success of the e. Procurement reform. A legal regulatory action plan shall be defined, enlisting primary, secondary and tertiary legislation. It is proposed for implementation, a new public procurement governance structure, that is able to manage (i) policy and monitoring, (ii) review and remedies, and c) e. Procurement governance and interoperability with Networking Electronic Procurement Platforms and e. Government services. LEGAL GOVERNANCE CHANGE MANAGEMENT The e. Procurement reform requires a change management structure capable of managing a comprehensive change management strategy on training, communication and stakeholders’ engagement. 21

Implementation plan approach All identified actions have been grouped in six projects for management reasons: Institutio nal capacity building 1 2 Legislati ve reform 6 Micro value procureme nt pilot 3 Implementatio n plan Small / High value procureme nt pilot Centralised purchasing Full e. Procurem ent system roll-out 4 5 22

Implementation plan milestones All identified actions have been grouped in six projects for management reasons: 4 Goals • Standardised process and templates for small and high value procurement e. Procurement system for conducting small and high value procurement for request for quotation, open tender and restricted tender • • 6 Full e. Procureme nt system roll-out To develop an e. Procurement system that allows to execute small and high value execute all procurement procedures in Moldova. Pilot this system to ensure its adequacy. • Expected outcome s 5 Small / High value procuremen t pilot Standardised process and templates for all procurement procedures e. Procurement system for conducting all procurement procedures in Moldova Centralised purchasing To develop an e. Procurement system that allows to manage centralised purchasing. • • Standardised process and templates for managing centralised purchasing e. Procurement system for managing centralised purchasing 23

Contact Details Thank you for your attention! Contacts Eliza Niewiadomska Legal Transition Programme, EBRD Niewiad. E@ebrd. com Piotr Biernacki EBRD UNCITRAL Public Procurement Reform Initiative piotr@ppi-ebrd-uncitral. com Dmitry Palamarchuk EBRD GPA TC Facility dmitry@ppi-ebrd-uncitral. com Myroslav Opyr Paul Boroday Viktor Nestulia Oleksii Yurchenko Marta Cano Transparency International Ukraine EBRD UNCITRAL Public Procurement Reform Initiative Transparency International Ukraine Project Director myroslav@quintagroup. com paul. boroday@gmail. com nestulia@ti-ukraine. org oy@datapathanalytics. com marta. cano@everis. com Pilvi Takala Senior International Policy Specialist pilvi. takala@ptcs. fi Dorina Harcenco Local Regulatory Expert dorina@ppi-ebrd-uncitral. com