E-PROCUREMENT

E-Procurement

E-Procurement

ANALYSIS

Purchasing can be defined as obtaining from external sources all goods, services, capabilities and knowledge which are necessary for running, maintaining and managing the (organization's) primary and support activities at the most favorable condition. Purchasing is much more than the single act of making a purchase. It involves planning, scheduling, policy interpretation, research, negotiation, selection and processing. The new rules on utilities E-Procurement are based on the concept that purchasers in sectors that are completely liberalised should not be covered. This concept has lead to two important changes to the scope of the Utilities Contracts Regulations. It was felt that deregulation in the telecoms sector had reached a stage where the application of the E-Procurement rules was no longer necessary. (Corner 2005 pp.9-10)

As a result? the new Utilities Contracts Regulations do not apply to purchasers in this sector. Utilities Contracts Regulations creates the possibility of applying to the European Commission for an exemption from the rules where the sector concerned is exposed to effective competition. According to OGC guidance on Regulation? the question whether a sector is exposed to effective competition depends on criteria such as the characteristics of the goods or services concerned? the existence of alternative goods or services? the prices and the actual or potential presence of more than one supplier of the goods or services concerned.

Under Regulation? applications can either be submitted by the UK government or by the utility concerned. The European Commission has recently granted the first exemption under the new rules in relation to the electricity generation industry in England? Wales and Scotland. (Corner 2005 pp.9-10)

The new directive contains a number of provisions which create the possibility of reducing the timescales governing the award of public sector and utilities contracts. The contracting authority will be able to stipulate that communication of information should takes place electronically. In open? restricted and negotiated procedures the contracting authority may choose to create tender documentation and notices which are available and transmitted electronically permitting them to significantly shorten contract E-Procurement timescales. (Bovis 2005 p.9)

The European Commission? the Council and the UK movement are all strong supporters of the use of information technology in public E-Procurement. Officials hope that a move to electronic purchasing will expose public sector contracts to more competition while simultaneously improving transparency and efficiency.'^ The Commission's long term objective is that all public sector contracts are tendered electronically; it plans to adopt a transitional period so that contracts will still be able to be tendered using traditional means to allow businesses time to put the necessary technology and know-how in place. (Brook 2004 p.12)The main benefit of e-tendering is time savings. This is particularly helpful in the case of contracts for the purchase of straightforward goods which are required periodically? such as stationery supplies. The creation of dynamic purchasing solutions? discussed below? which operate electronically? should optimise time and efficiency savings for the E-Procurement of certain contracts.

It is not the case however? that speed in tendering is always synonymous with ...