Article translated from Utusan Malaysia 27th November 2006

eBidding increases Government transparency

by Azizan Ayob

Malaysia’s Ministry of Finance has recently begun pioneering the usage of the eBidding procurement method. This new procurement mode is targeted to be implemented in all 28 Ministries beginning next year. The introduction of the eBidding mode in extension to the Government electronic procurement system, ePerolehan, could not have come at a better time. The inherent benefits and subsequent effects of implementing eBidding is in line with Prime Minister Datuk Seri Abdullah Ahmad Badawi’s commitment in executing the National Integrity Plan agenda more resolutely in order to improve Malaysia’s position in the Bribery Perception Index.

The recording and achiving of all procurement transactions and the usage of smart card technology ensures that the values of transparency and accountability are instilled to reduce and prevent corrupt practices among Government users and suppliers.

Transparency

ePerolehan also improves transactional transparency as business activities between Government and suppliers are conducted in real time. This not only helps both buyer and seller to integrate their work processes more effectively, but also reinforces the confidence to do business. Elements of distrust and suspicion that arise due to bureaucratic and lengthy processing time and delays in receiving clear Government decisions can be minimised.   

Archival transparency is strengthened as all transactions and procurement documents are recorded and stored in a database. With this, transactions can be verified and analysed at any time by a Government user or supplier to evaluate the level of efficiency and effectiveness of procurement activities and work processes.

Apart from the self-evaluation that can be conducted by Government users and suppliers, all information related to the bidding negotiation, selection and evaluation that is recorded in ePerolehan may also be analysed and verified by a third party. This is to ensure that the procurement process which should be rational and based on economic decision is not jeopardized by elements of favouritism or bribery.

In particular, the eBidding procurement mode can further improve the transparency perception in Government procurement as it promotes competition and practicality.

One of the main features in eBidding is that the procurement specifications are uniformed and standard. The strict pre-qualification process imposed in eBidding will help in eradicating the perception that there is a unique relationship between a supplier and the product or service that is offered.

The brief negotiation process in eBidding will further enhance the transparency perception in Government. The process of competing bidding prices amongst suppliers is online, immediate and interactive within a bidding period which ranges between 30 to 120 minutes. This period is far shorter than that of the conventional price negotiation which can continue for months. Consequently, this will shorten the entire procurement cycle, increase the transparency perception amongst suppliers and further reduce activity costs. This is proven to be true in the United Kingdom, where Government and suppliers have successfully reduced the procurement period and the related activity costs by 30 percent. In the same study, it is found that a shorter procurement cycle is perceived by suppliers to be more transparent than a lengthier period attached to conventional procurement methods.

eBidding is a more transparent procurement method which is proven to produce competitiveness and consequently the best price for the contract on offer. Based on procurement reports in United Kingdom, Canada, Japan and Hong Kong in 2005, procurement costs for central contract products and services through the eBidding process recorded savings of between 5 to 20 percent compared to conventional procurement.

In summary, the recent implementation of eBidding at the Ministry of Finance is hoped to symbolise the start of ePerolehan usage by all Government departments and suppliers. I believe the comprehensive use of ePerolehan will help to enhance the level of transparency, efficiency and effectiveness in Government procurement to achieve the objective of the National Integrity Plan and maintain the good reputation of our country, Malaysia so that it is synonymous with transparency, efficiency and effectiveness.

-DATUK AZIZAN AYOB is Executive Director/Chief Executive Officer,

Commerce Dot Com Sdn. Bhd.