Technology & Tools
EU Commission fact sheets on eProcurement benefits

The EU Commission has produced some useful fact-sheets here around the new public procurement Directives. They cover all the major points, from the new Concession Directives to issues such as innovation, services purchasing and social aspects within the revised procurement directives.

Colossus Bletchley ParkHowever, reading the “Computerisation of public procurement” factsheet does raise a few questions about the credulity or understanding of the author(s). It usefully lays out the programme for the introduction of E-procurement in the EU by September 2018, by which date electronic submission of offers (e-submission) will become mandatory for all contracting authorities. But it is the first section that raised eyebrows here.

“How can e-procurement improve public procurement?

E-procurement means to conduct public procurement electronically. This involves, publishing contract notices online (e-notification), publishing all documents for a call for tenders online (e-access to tender documents), suppliers submitting offers to public buyers/contracting authorities electronically (e-submission) etc.

E-procurement can significantly simplify the way procurement is conducted, reduce waste and deliver better procurement outcomes (lower price, better quality) by stimulating greater competition across the Single Market. Public buyers who have already made the transition to e-procurement commonly report savings of between 5 and 20%. Given the size of the total procurement market in the EU, each 5% saved could return around €100 billion to the public purse”.

(Our highlighting). Those numbers (the 5 – 20% and the £100 billion) seem hard to believe to say the least. Simply introducing what the Commission defines as eProcurement (which is not even a full eSourcing process, but simply electronic advertising and document exchange) in itself clearly cannot save 5-20% of the value of the contracts. Why would it? Do suppliers suddenly slash their prices because they send an email rather than a letter? It seems unlikely.

It might save that amount or even more of the administrative cost of running the procurement process. But here the percentage saving figure has been applied to the total spend numbers. Now maybe if you re-engineer your whole procurement process around the introduction of eProcurement, those savings might be feasible. Opening up competition, introducing new and better suppliers, structuring your tenders and evaluation processes better… that might bring a step change in value.

But just introducing online advertising and an electronic mailbox? No way.

However, the factsheet does go on into other areas, such as Dynamic Purchasing Systems, auctions and E-Certis, and provides useful guidance, so it is recommended reading (as is the whole series). And in our opinion, the benefits of eProcurement are obvious and large enough that really the Commission does not have to come up with these exaggerated savings figures to justify their actions in mandating the process.

More to come of course on the other technology-related aspects of the Directives too.