Originally developed by the Public Procurement Service and now in full operation in Korea, the Korea On-Line Eprocurement System (KONEPS) has been introduced into another country with the completion of negotiations between the governments of Vietnam and Korea. The construction of the electronic public procurement service system in Vietnam started last January and is expected to be completed in October this year.
KONEPS is one of the representative e-government systems in Korea and ranks high in terms of quality and functionality in the UN's evaluation of the world's egovernment systems. It has attracted worldwide attention for its transparency and efficiency. The Public Procurement Service has been working to share its benefits with foreign governments and has met its first success in Vietnam.
Since 1997, Vietnamese officials have visited Korea's Public Procurement Service on numerous occasions and indicated deep interest in KONEPS as an exemplary government software system. The Public Procurement Service has often provided useful consultations to Vietnam.
In 2005, the Ministry of Planning and Investment of Vietnam and the Public Procurement Service signed a memorandum of understanding and conducted a feasibility study about using the system with the Vietnamese government. Based on the results of this study, the Vietnamese government revised its Law on Procurement to introduce the e-procurement system into Vietnam. Under the revised law, it is now obligatory to electronically publicize bid-related information including bid notices and the results of auctions. The said law stipulates that the whole process of transactions in public procurement can be handled by an electronic e-procurement system.
Based on an internal decision of the Vietnamese government to introduce an e-bidding system based on KONEPS, they made an official request to Korea's Ministry of Foreign Affairs and Trade to set up a pilot e-procurement system in Vietnam as a grant program in 2007.
When installed, the pilot e-procurement system, which is valued at US$3 million, will simultaneously make available to everyone all information related at Vietnamese public notices, bidder evaluations and awardee selection. For three major agencies - the Hanoi City government, Vietnam Telecommunications Corps, and Vietnam Electricity Corp. – an e-bidding service equipped with digital signatures and encryption technology is also provided. The Public Procurement Service plans to deliver expertise on the revision of the Vietnamese procurement system based on an analysis of the existing public bidding processes to make the electronic handling of the whole procurement process possible, and to move along towards the widespread application of the e-procurement system. For this purpose, specialists and a consultation team will be dispatched to Vietnam.
The pilot KONEPS system in Vietnam funded by the Korean government will be helpful to Korean bidders who want to join in on the scheduled construction of the Vietnamese main e-procurement system. This is also a good opportunity for Korea's IT industry to increase its competitive edge in overseas markets, given that Korean IT companies have suffered from a shortage of overseas marketing specialists and the absence of overseas network systems.
Introducing KONEPS
KONEPS is a nucleus in the realization of e-government of the Republic of Korea. Through the unified and comprehensive electronic procurement system, KONEPS offers effective one-stop services to meet the requirements of all public organizations and related businesses. With speedy handling and performance transparency, it eliminates inefficiency in administrative processes and contributes to national budget savings.
The most noteworthy merit of KONEPS is that it has combined all national, provincial, public and civic organizations into a single network, thus saving time and expense by sharing all information and data on public procurement among all concerned parties. In short, once registered with KONEPS, all information and business data are simultaneously made available for business groups regarding public bidding processes.
In the past, public bidders had to make numerous visits to procurement offices from the time of application of bidding and screening to the final selection, not to speak of frequent consultation visits. KONEPS has replaced all these complicated and time-consuming procedures with a unified, speedy, efficient and transparent e-procurement agency, getting rid of a hoard of paperwork required in the process. In other words, nowadays, there is no need to make many visits to procurement offices to submit required paperwork for 200,000 odd annual public auctions. This can be handled instantly through nationwide network of KONEPS.
Without remaining complacent with such brilliant achievements, the Public Procurement Service built a backup center that has been in operation since 2003 to cope with any emergency situations created by war or national disaster which might paralyze the functions of KONEPS. In 2004, PPS also adopted the Customer Relationship Management (CRM) system to accommodate various demands from customers for timely supply of information and related dates on prices, goods, services and concerned business groups. The Web Call Center was also set up to answer simple telephone inquires, if necessary through visual consultations to meet individual requirements of customers.
The Ontology System was also devised to facilitate easy user access to wide-ranging commercial product catalogs with many kinds of classifications so that users can easily find available information on the items in which they are interested.
In 2005, KONEPS started mobile services through a Personal Digital Assistant (PDA) so that users can get access to bidding information while driving or on business travel - virtually ubiquitous e-public procurement services. One drawback, though, is that PDAs are a little expensive. For this reason, the number of PDA users is limited at the moment.
To get rid of this roadblock, the Public Procurement Service started public bidding services via cellular phones. Basically e-bidding service requires strict security and reliability. So, authentication certificate and encryption technology same as those of PC e-bidding was applied to e-bidding service by cellular phone.
Starting from January this year, biometrics skills are being introduced to verify the identification of participants in bidding by cellular phone. They have to connect USB fobs containing personal bioinformation to cellular phone when applying for public bidding. When the safety and reliability of biometrics skills in cellular phone bidding system is established, this technology will also be applied to public bidding via PCs in the first half of 2009.
Expansion of KONEPS over Further Seas
To foster KONEPS as a favored global brand, the Public Procurement Service has launched an intensified overseas public relations service, extending its target area from Southeast Asia to countries of Latin America and Africa.
Overseas public relations activities include presenting successful KONEPS application stories at international conferences and sponsoring joint workshops with the UN, the World Bank, the Asian Development Bank and other world organizations on e-procurement systems. In this way, the Public Procurement Service shares its KONEPS expertise, experiences and success stories with interested groups of global society. In a sense, KONEPS has become a well-known brand name for e-procurement systems overseas. Based on its international recognition, KONEPS is adopted as a baseline by foreign countries in their e-procurement system building. Countries like Japan, China, and Taiwan in Far East Asia; Peru, Columbia, and Costa Rica in Central America; and also Italy and Belgium in Europe have sent their observation and study teams to the Public Procurement Service.
Based on overseas public relations, the Public Procurement Service selects target countries for the KONEPS system and plans to offer feasibility surveys and consultations with Official Development Assistance (ODA) funds from the government.
With cooperation from World Bank and other international monetary organizations, the Public Procurement Service is actively engaged in the distribution of the e-procurement system. International monetary organizations are all favorably inclined to e-procurement because the electronic system can help in eliminating possible irregularities in public procurement transactions in developing countries. There are several good examples of major cooperative cases with international financial organizations. There was a joint Workshop with ADBI and UNESCAP in June 2005 in Seoul, where more than 60 specialists attended from 34 countries. Another example was the joint Eprocurement Workshop with the World Bank in November 2006 in Seoul with the participation of specialists from four Central Asian countries. A Joint Conference with the UN Governance Center in December 2006 in Seoul was held, and the accuracy and efficiency of the electronic public procurement system was displayed before participants from 10 countries. Another Joint International Workshop with the International Development Bank on e-procurement systems for representatives from four Central American countries was held in June 2008 in Seoul. Also there was a joint sponsorship with ADB for expertise and skills promotion on e-procurement in October 2008 in Seoul. In addition, the Public Procurement Service conducted the presentation of success cases of KONEPS at various international workshops and conferences at their invitations.
Thanks to such efforts, KONEPS is known as the best practice model among the UN and other world organizations, thus raising the possibility of exporting the KONEPS system overseas. Indonesia, Mongolia, Jamaica and Costa Rica are in contact with the Korean government to import the e-procurement system.
2010 IPPC in Seoul
The International Public Procurement Conference (IPPC) is an international conference that is held every other year where scholars, public officials and industrial representatives gather together from around the world to discuss and exchange views on all problems involved in public procurement transactions.The Public Procurement Service attended the 3rd IPPC Conference held in Amsterdam in 2008 and presented success stories about KONEPS. It was also successful in obtaining the 2010 IPPC to Seoul, while in fierce competition with the United States and Italy. The success in attracting IPPC to Seoul in 2010 is all due to the sustained overseas public relations activities by KONEPS. This indicates the excellent performance of KONEPS with great efficiency and accuracy in public procurement transactions.
IPPC is a place where advanced knowledge and expertise on public procurement are exchanged and pending problems are discussed with the participation of delegates from more than 50 countries and other world organizations. Therefore, the 2010 IPPC Conference in Seoul is a good opportunity for Korean businesses to have a bird's eye view of global practices in public procurement.
For realization of a Green Public Procurement System, the Public Procurement Service is exploring various cooperative channels with the establishment of its multilateral cooperative commission. For this purpose, the Public Procurement Service is in close contact with its counterparts in the United States, Canada, Britain and Italy.
Through the multilateral cooperative commission, the participants will study contract systems, exchange of information and e-procurement transactions now in practice around the world. In short, the commission studies efficient cooperative methods in public procurement by studying best practices.
It is expected that the first joint cooperative commission meeting scheduled for this year will deal with issues such as the wider opening of markets for public procurement with a gradual increase in FTA signing countries, problems of global concern like Green Public Procurement, and development methods for e-procurement systems.
Public procurement policies, related information and data, the expanding scale of markets and participation of foreign businesses will also be treated at the meeting by a wider sharing of information and reference data among global nations. Thus an e-procurement system could be applied in developing countries in the near future.
Prospects and Problems
With the drastic improvement in productivity and transparency of the public procurement administration, 4.5 billion won (US$3.2 million) is saved annually in transaction costs and the public trust in public procurement services is greatly enhanced. The Public Procurement Service is determined to share its hard earned valuable experience and expertise with other nations of the world.
The positive support will be extended in 2009 to Vietnam in setting up a pilot eprocurement system. Also, on-going negotiations with Costa Rica has been completed, and an agreement will be signed for the export of KONEPS. No less effort will be made toward African countries in this respect. In countries where some degree of IT infrastructure is built like Tunisia, Senegal and Nigeria, feasibility studies and e-procurement training programs will be offered, thus eventually opening the way for the export of KONEPS to those countries.
Kwon Tae-gyun
His philosophy for the office of Director of the Public Procurement Service is to serve as an efficient and effective conduit for governmental relief funds that should be expended within the first half of 2009. He also believes that small and medium-sized businesses should have more access to procurement services auctions. Additionally, he thinks of the Public Procurement Service as a watchdog against national budget waste and rigid contract prices in an extremely volatile economy.
