eProcurement System in FYR of Macedonia

Acronym of the case:

MESPP

Web address of the case:

https://www.e-nabavki.gov.mk

Country of the case:

FYR of Macedonia

City/region:

Skopje

Posting Date:

16 April 2008

Last Edited Date:

07 March 2009

Author:

Elena Stamatoska (USAID funded e-Gov Project)

eProcurement | eAuction | eTendering

Type of initiative

Project or service
Strategic initiative

Case Abstract

The USAID funded e-Gov Project and the Public Procurement Bureau (PPB), fully supported by the Government of the Former Yugoslav Republic of Macedonia, developed and implemented an electronic system for public procurements - ESPP (https://www.e-nabavki.gov.mk), which provides an easy-to-use, secure, efficient and transparent on-line solution for electronic public procurements. The e-Procurement system enables electronic submission, storing, opening and evaluation of the bids thus guarantying a fair and transparent process. It also makes the bidding process much easier and saves time and money for the tenderers.
The purpose of this application is to provide the business community with the benefits of the modern technology by eliminating the human influence in the public procurement process from the moment of submitting the bid to the moment the most favorable tenderer is selected.
The system offers a secure, efficient and transparent preparation and administration of all tender-related documents, removes unnecessary paper work and enables secure data flow throughout the entire procurement process. It also provides a very efficient platform for a fully transparent and cost-efficient public procurement.
The MESPP is tailor made system for the public procurement system in FYR of Macedonia, but it is also fully aligned with the EU PP directives.
The following phases are covered by the MESPP: eSourcing, eNoticing, eAccess, eSubmission and eAwarding.
MESPP covers the overal open call procedure, starting with the preparation activities, publishing the tender, asking questions related to the tender documents/giving answers, submission of bids, public opening of bids, evaluation of bids, making decisions for selection of most favorable bid/cancelation of tender, sending notifications for the decisions made and public announcement of the decision made.
MESPP also covers the restricted call procedure, which includes the first and second phase of the procedure.
Electronic (reverse) auctions are also part ot the MESPP and FA and DPS will become part during 2009.

Description of the case

Domain

eGovernment

Topic

Efficiency & Effectiveness, Benchmarking | eProcurement | Services for Businesses

Sector

Procurement

Start date - End date

April 2005 (Ongoing)

Date operational

January 2008

Target Users

Business (industry) | Business (SME) | Administrative

Target Users Description

Contracting authorities: All state and local government bodies and public enterprises that publish and conduct public procurements through the system. All CAs in the country are potential users of the system, but at this moment only 40 have registered in the system. The total number of CAs in Macedonia is around 1.200, out of which vast majority are very small procurers (couple of tenders per year).
Economic operators: All national and international companies that offer their goods, services or works to the Macedonian contracting authorities. At the moment around 650 economic operators are registered to use the e-Procurement system.

Scope

International | National | Local (city or municipality)

Status

Operation

Language(s)

English | Macedonian

Policy Context and Legal Framework

The EU Directives from 2004 (Directive 2004/17/EC and 2004/18/EC) set up the basis for electronic public procurements. In FYR of Macedonia the new Law on Public Procurement (adopted in November 2007; entered into force in January 2008) and a Rulebook on the manner of usage of the e-Procurement system (December 2007) incorporate the provisions from the Directives and provide even more precise and detailed rules on the e-Procurement system.
We have also drafted and distributed 2 very detailed Instructions on how to use the MESPP, one for the Contracting Authorities and one for the economic operators.
The usage of the e-Procurement system is optional for the contracting authorities and free of charge for all users.
According to the Law on Public Procurements, electronic documents uploaded into the ESPP should be signed digitally. For the purpose of signing the electronic documents, digital certificates are used.
The Government strongly supports the usage of ICT in the public sector and perceives the e-Procurement system as a means for elimination of deficiencies in the procurement process and for fight against corruption. Therefore, it is very likely that during 2008 public procurement legislation be modified in order to make certain segments of the e-Procurement system (e.g. e-Auction) compulsory for usage by the contracting authorities.

Project Size and Implementation

Type of initiative

IT infrastructures and products

Overall Implementation approach

Public administration

Technology choice

Standards-based technology

Funding source

Public funding national | Charity, voluntary contributions

Project size

Implementation: €49-299,000

Yearly cost:

€1-49,000

Implementation and Management Approach

We took an exceptionally broad approach, focusing not only on the development of the software but also on the legal and administrative issues. As part of the project, legislation was amended to provide possibilities for conducting public procurements electronically.
Project was implemented as a joint effort by the e-Gov Project and the participating partners from the Public Procurement Bureau (PPB), General Secretariat of the Government and local software developers.
During the development and implementation phase of the project, roles and responsibilities of each of the partners were strictly defined. As a funding partner, e-Gov Project was engaged in the overall project management with regard to the software development and the implementation. The local IT companies developed the software following the Scope of Work drafted by the e-Gov Project. PPB provided the legal basis for the introduction and functioning of the MESPP. e-Gov Project was the Group Leader, with the main responsibility to incorporate necessary legal changes into the software. General Secretariat provided the necessary hardware infrastructure needed to support the application.
Detailed evaluation of the functionalities and user perspective was performed by the e-Gov Project and PPB. Evaluation was carried out to assess whether any additional modifications are needed.

Technology solution

The MESPP is a web application based on Microsoft platform, using 3.5 .Net Framework. The presentation layer holds various user interfaces for interaction between the users and the system, providing the necessary interoperability among various organizations involved in the same.
The MESPP is developed with several industry standards in mind, following the Law on Public Procurement as a heart of the application's functionality, providing high sense for security and performance.
MESPP accepts electronically signed documents with digital certificates issued by the 2 certified CAs in the Former Yugoslav Republic of Macedonia. It also accepts documents signed with other internationally recognized digital signatures. More specifically, we have designed the system in such a manner that all tenderers can sign any type of document (e.g. MS Word, pdf), with digital signatures and upload the document back into the system. The role of the Contracting Authority that published the tender is to check whether the signature applied in the document is acceptable or not. There is no restriction in terms of the types of digital certificates (normalized and qualified are equally accepted).
Electronic certificates are accepted, but there are no attestations available yet.
Interoperability project which aim is to enable exchange of documents and data in electronic form.

Impact, innovation and results

Impact

The Former Yugoslav Republic of Macedonia has developed and started to implement the MESPP in 2005. The impact of introducing the system has not yet been assessed, but the Public Procurement Bureau (PPB) supported by the Government of the Former Yugoslav Republic of Macedonia plans to set big percentage of all public procurements to go through the system.
Out of 1.200 Contracting Authorities in the country, 215 are registered to use the system so far. By the end of 2009 all Contracting Authorities in the country will be registered in the system. So far, around 35 tenders were conducted through the system successfully. Most of them were open call procedures and e-auctions as a final phase of open call procedure.
Currently 1.000 companies are registered to use the MESPP, out of which 50 companies participated on tenders conducted through the system so far. This number increases on a daily basis, which shows the great interest for the companies to use the system.
Expected benefits for different users of the system:
For the contracting authorities: increased transparency and efficiency - clear picture how public money is spent; significant money savings; time saving regarding the processing and evaluation of the bids; more efficient and standardized work procedures; expanded supplier base.
For the business community: increased competition and new business opportunities to become government suppliers; easier ways to get the necessary information and follow up processes; significantly reduced cost to bid.
For the PPB: better monitoring of the conducted public procurements
For the society: accountability and trust in public spending; potential for corruption will be significantly reduced.
The broad usage of the electronic auctions is expected to result in significant savings for both the contracting authorities and tenderers.
Examples of real benefits:
Municipality of Berovo (population: 13.942) is one of the registered contracting authorities to use the e-Procurement system and represents a good example that shows the benefits of using the system. Until now, they have published 3 tenders and all of them were closed successfully. Their latest tender (procurement of construction works for the public square) gained for the municipality savings of over 1 million MKD (app.$25.000).
Municipality of Kocani published a tender for procurement of maintenance of traffic light signalization. Through the MESPP the whole evaluation process was conducted in 2 hours, together with the preparation of Report from the evaluation of the bids and Decision for selection of the most favorable bidder. The winner was announced in less than 3 hours starting from the moment of public opening. The estimated value of this tender was 350.000 MKD. The most favorable bidder offered price of 280.000 MKD, which contributed to savings up to 30 % compared to the estimated price.

Track record of sharing

MESPP was designed to follow the procurement legislation in FYR of Macedonia. However, this legislation is fully compatible with the EU Directives, thus the application needs modifications in order to incorporate specifics of other countryâ€™s procurement systems. MESPP can be adopted and used by all Public Authorities in the country.
After the full implementation of the MESPP, in early 2007 the e-Gov Project shared its experience for development and implementation with the Albanian Public Procurement Agency. The result of this presentation was the uptake of the Albanians to develop and implement similar application for their public procurements.
MESPP was also presented to the representatives of the World Bank; however no particular activity followed.
Through many training activities conducted so far, the MESPP was presented to around 1.160 representatives from various contracting authorities and economic operators, out of which 80% were Contracting Authorities and 20% economic operators. As a result, the number of registered users of the system has significantly increased. The intention of the Government is to continue with the e-Procurement trainings and workshops, so that by the end of 2008 all CAs in the country (around 1.200) are registered to use the system.
MESPP offers an annual archiving of all procedures conducted through the system, together with all related documents to each of the procedures. No specific standards were adopted and followed when implementing this functionality.

Lessons learnt

Main lessons learnt while introducing the MESPP are the following:
Even countries with low internet penetration rate, can create a revolution if the services offered online are easily accessible and user friendly. The MESPP is a web based SW solution that can be easily accessed by using different internet browsers. The systemâ€™s functionalities and design are user-friendly and do not require any advanced IT knowledge.
When the public procurement procedure is carried out electronically, the business community understands that bribes should not be an automatic part of getting the contract. The mindset change leads to reduction and elimination of the corruption from the public procurement process.
It took enormous efforts and time to develop and implement a fully-fledged e-Procurement system. Due to the complexity and sensitivity of the public procurements and the resistance to the use of IT in this area such system could not be made operational over night.
It really makes the procedure simple, efficient and transparent if all steps in the public procurement procedure are taken over the system. However, a step-by-step rather than pushing for fully fledged electronic system is better approach for all those who would like to implement e-Procurement systems. Developing and making mandatory for usage of only few modules at the beginning would bring quick and positive results.
Continuous education and training for all system users need to be established and implemented. Interoperability issues with other state bodies, such as the institutions responsible for issuing evidence for the vendorâ€™s economic and financial capacity must be resolved in order to provide more efficient functioning of the system.
Mandatory use of the MESPP, in whole or in part, must be provided in the national legislation. Such arrangement would significantly enhance the number of transactions carried out through the system thus increasing its effectiveness.

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