Provid idin ing Resources, , Fig ighti ting Poverty, , Res estorin ing Dig ignit ity . IsDB, e-GP and In Is Indonesia E-Procurement Forum: Enhancing Public Spending December 2015, Vienna, Austria Project Procurement (P (PPR) ) Di Divisi sion Ope perations s Poli olicy An And Ser Services s De Department (O (OPSD SD) Islam slamic De Development Ban ank
Outline 1. Indonesia at a Glance 2. IsDB and Indonesia 3. IsDB and e-GP 4. IsDB and Pilot Program on e-GP in Indonesia 5. Lesson Learned, Challenges and the Way forward Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
1. . In Indonesia at t a Gla lance Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
Indonesia at a Glance Economical Data • La Land 1,91 1,919,4 ,440 km km2 • GDP 888.5 Wit ith 17.5 17.508 isla lands billion • Pop opulatio ion 255 255 mill llion • Den Density 134 134/k /km2 Growth: 4,67% Poverty headcount 11.3% Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
2. . Is IsDB and In Indonesia Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
IsDB and Indonesia Amount Totally 16 No No Sec Sector (m (mil illion USD) SD) Active Projects 1 Agriculture 205 2 Health 64.97 3 Education 466.04 4 Transportation 152.55 5 Finance 0.45 6 Water and Sanitation 100 Grand Total 989 IsDB Active Portfolio Water and Sanitation Finance Transportation Education Health Agriculture 0 100 200 300 400 500 Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
3. . Is IsDB and e-GP Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
IsDB and e-GP The Government of Indonesia’s The new presidential regulation (GOI’s) procurement reform No. 54/2010 will enforce the agenda already includes the implementation of the national e- introduction of e-procurement on procurement system in all a phased basis. At the national government administrations level, the development of a nationwide by the end of 2012. National e-Procurement System This lends itself to significant has been on-going since 2004 with growth in the number of financing by the Indonesian participating agencies, vendors and Government. Limited additional all Ministries over the coming technical assistance has been years. provided by the donor community LKPP e-GP System MoPW e-GP System Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
IsDB and e- GP… MDBs and e-GP in Indonesia The World Bank issued its No-objection on using of e-GP of MoPW for NCB, ICB, Consulting Services and e-GP of LKPP for only NCB in February 2014. The Asian Development Bank issued its No-objection on using of e-GP of MoPW for NCB, ICB, Consulting Services and e-GP of LKPP only for NCB in August 2014. The Bank has not any previous experience on promoting or using of e-GP in its MCs. No project under IDB funded projects is using e-GP in Indonesia. Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
4. . Is IsDB and Pil ilot Program on e-GP in in In Indonesia Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
IsDB and Pilot Program on e-GP in Indonesia ① Review the legal framework for application of e-GP in Indonesia ② Review and assess the e-GP process and The Bank has not any methods are used in Indonesia taking into previous experience on account the results of similar assessments promoting or using of e- done by MDBs presented in the country GP in its MCs. Recently, ③ Review the compliance of application of e- GP in Indonesia with the procurement upon request received policy and procedures of the Bank from Government of ④ Review the compliance of application of Indonesia for application the e-GP system of Indonesia with MDB’s of e-GP in SANIMAS e-GP requirements Community Based ⑤ Identify the potential risks and required Sanitation Project, the mitigations on application of e-GP system Bank Starts its in the Bank funded projects assessment as Pilot on ⑥ Adaptation of relevant SBDs for being used under implementation of e-GP in Indonesia the application of e-GP ⑦ Review the customization needed to be which is focused on: recommended to GoI for using of e-GP system during the implementation of funded projects Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
IsDB and Pilot Program on e-GP in Indonesia… Central Cen l Governmen ent t Bu Budget State Budget Fiscal Year (billion USD) 2012 143.5 State Budget (billion USD) 2013 168.3 250 2014 184.2 200 2015 203.9 150 100 50 Volume Procurement: 0 2012 2013 2014 2015 30% - 40% equivalent with 60 – 81 billion USD Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
IsDB and Pilot Program on e-GP in Indonesia… Cur Current Issu Issues • Inefficiency of State Budget Management: The government estimates that certain amount of state budget lost every year about 20% – 30% due to 1 inefficiency associated with the procurement processes • Corruption Cases: Corruption Eradication Commission (KPK) stated 80% of all 2 corruption cases are associated with misused of public procurement. • International and National Competitiveness: (i) Lack of capacity and opportunity to participate in national economy (small and medium enterprises), 3 (ii) Lack of capacity and opportunity to participate in international market • High Cost Economy: Lack of competitiveness due to market asymmetric 4 information and closed market. Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
IsDB and Pilot Program on e-GP in Indonesia… Procurement functions decentralized throughout procurement unit/tender committee from all procuring entities e-Procurement is implemented electronically through decentralized e-procurement system known as SPSE All provincial, City and Districts have obligation to establish e-Procurement Service Unit known as LPSE By 2015, all procuring entities should spend 100% of budget using e-Proc As of 2015, success to establish 627 LPSE as single e- market place (54 Ministries/Agencies,….. etc) Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
IsDB and Pilot Program on e- GP in Indonesia… Transparency Effectiveness 1. Mandatory to post tender announcement in publicly 1. Eliminating the costs of obtaining information about a accessible medium (web portals) tender process that can be obtained without charge for registered bidders. 2. Sequence of procurement processes can be monitored by public 2. Ease of tracking compliance, eliminate irregularities to take needed corrective actions. 3. Increased quality of procurement information and contract management for audit trail 3. Reduce cost of procurement advertisement on conventional media. 4. Fostering participative monitoring and public oversight. Impact of e-GP in Indonesia Efficiency Competition 1. Reduce exhaustive manual process and procedure lead 1. Increased vendor database and number of participating time through e-tendering and the use of e-catalogue bidders to foster competition (registered bidder database grew by 200% from 2010-2012, though the growth rate system. become saturated at 3% in 2014) 2. Government budget savings gradually increased, from 2. around 20% (2010) to around 30% annually, resulting from Nurturing competition reflected in increased number of participating bidders and limit the collusion amongst bidders/local healthy competition and reasonable O/E calculation cartels as face-to face interaction is no longer required Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
IsDB and Pilot Program on e-GP in Indonesia… Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
5. . Lesson Learned, , Challenges and Way forward Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
Le Lesson sson Le Learn arned, d, Chal allenges lenges an and Way for orward ard The IsDB’s assessment for imple The lementatio ion of of e-GP GP in in the Bank upcoming funded projects has been started in in 2015 . August 2015 Aug 2015 and and is is pl planned to to be be com omple leted by by end end of of De December 2015 Chall allenges Way forw rward 1. Technological limitations: 1. Prepare and draft an e-GP Strategy for the Bank - Limitation in Bandwidth - Stability of the Internet Connections 2. Consideration of e-Procurement in - Technical Capacity of the End-users the Bank’s procurement policy during its update 2. Introducing of SPSE version 4 3. Join to the MDB’s e-GP Working - Full e-procurement system Group 4. Capacity Building Program for e- Procurement internally for Bank’s professional staffs and externally for MCs Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
لضفأ ً لببقتسم ينبن ً اعم Together we build a better future Ensemble nous construisons un avenir meilleur Thank You Project Procurement Division Operation Policy and Services Department www.isdb.org prepared by Amirmehdi Asghari Senior Project Procurement Specialist amasghari@isdb.org
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