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October, 9 2018
September, 20 2018
Are you ready for eProcurement? Guide to Electronic Procurement Reform By:Christina Ioannou
Are you ready for eProcurement?
Guide to Electronic Procurement Reform
- System use is allowed free of charge to all Contracting Authorities and Economic Operators
- Training seminars or hands on assistance are provided by a support team
- Online help, use manuals, online guidance via interactive walkthrougs (video demonstrators) and a helpdesk line for telephone support and troubleshooting are available to the users on a 24/7 basis.
I. Early reforms
By the time the Treasury of the Republic was assigned the role of the Competent Authority for Public Procurement in Cyprus, in practice there was no use of electronic means in the Public Procurement process in the country. However, there was a pressure need of the implementation, design and development of an eProcurement platform where all the public procurement will be tracked. eProcurement covers the whole spectrum of public procurement in Cyprus, and it has been very efficient and effective since the beginning of its establishment. eProcurement began operating with a centralized approach due to size specificities, since there were many small contracting authorities. One of the challenges it has faced was the transposal of EU laws in the national legal system. However, this transposal has run smoothly as there was no challenges of the interpretation of the EU public procurement laws in the Cyprus legal system. Additionally, the eProcurement system achieved advancement in the organizational and technical sector due to its very organized performance, such us providing all the necessary tools and technologies for the users free of charge. Finally, it has been enhancing from the early stages of its establishment the principles of transparency, equal treatment, non-discrimination and proportionality, as introduced by the EU policies on public procurement across Europe.
II. eProcurement reform: Legal/Regulatory Framework
- a. New legislation: Although there is not a specific eProcurement national legislation, framework agreements and eProcurement are mainly governed by the Procedures for the Conclusion of Public Procurement and for Relevant Issues Law of 2016 - 73 (I) / 2016 (Public Procurement Law – PPL) (specifically referred in Chapter 2, Article 30 of the Law).
The present recently amended law has substituted the previous relevant law on Public Procurement. Complementary laws on the main one are:
a) the Law for the Purchase of Clean and Energy Efficient Vehicles in Public Utilities of 2011 – 39(I)/2011;
b) the Law on the Regulation of Procurement Procedures for Bodies Operating in the Water, Energy, Transport and Postal Services and Related Issues of 2016 - Law 140 (I) / 2016;
c) the Law on the Regulation of the Procedures for the Assignment of Concession Contracts and Related Issues of 2017 – Law 11(I) / 2017.
EU Directives have been transposed into Cypriot Law of Public Procurement. Directive 2014/24/EC of the European Parliament has been transposed by Law 73(I) / 2016 governing public procurement main law and abolishes the previous relevant European Directive 2004/18/EC. Additionally, EU Directive 2014/23/EC has been transposed by Law 11(I) / 2017 governing the regulation of the procedures for the assignment of concession contracts. Finally, EU Directive 2014/25/EC of the European Parliament has been transposed by Law 140(I) /2016 governing public utilities.
The PPL and hence the eProcurement system in Cyprus covers:
the whole spectrum of public procurement in Cyprus
Allows electronic catalogues and e-order submissions
Mandatory use for competitions and results
It prepares Part C of the Official Gazette of the Republic
Available free of charge for:
- All Contracting Authorities of the State
- All Contracting Authorities of the wider Public Sector
- All Economic Agents inside and outside Cyprus
- Local Authorities and any associations thereof
Widespread and easily accessible media
To be able to use the system all you need is access to:
- Active email account
- Computer connected to the internet
Additionally, it includes and governs:
- One-off procurement procedures
- Open procedure
- Restricted and accelerated restricted procedures
- Competitive dialogue
- Negotiated and accelerated negotiated procedures (with and without publication)
- Simplified procedures (below threshold procurements in line with national law)
- Repetitive procurement through Framework Agreements
- with e-Catalogues support
- without e-Catalogues support
- Electronic Ordering
- specific orders can be concluded either by direct ordering (through eCatalogues or not) or by reopening competitions (through selecting specific products of supplier catalogues and requesting better prices)
- b. New Institution: According to the decision of the Council of Ministers in October 2010, the Public Procurement Directorate (PPD) of the Treasury of the Republic has been designated as the Competent Authority for the Implementation of the Framework Agreements in Cyprus. The PPD, headed by the Deputy Accountant General, comprises professional accountants, accounting officers, engineers and clerical staff
In June 2012, the group dealing with framework agreements has been strengthened by four people from the Department of State Purchasing and Procurement
- c. New electronic process: eProcurement is operated through the ePS application which is a secure and interoperable web-based application of the Republic of Cyprus and is used for the implementation of electronic procedures in conducting public procurement competitions.
Additionally, an e-catalogue platform called ‘e-Agora’ was created to progressively increase electronic submission of tenders so as to be in a good starting-point upon transposition of the European directives.
III. Law and operational policies
A legal framework was produced using principles governing public procurement and eProcurement in the EU and incorporated some specific features, including, inter alia, electronic documents transmission and electronic certified signatures. The legislation focused on consistency of the electronic process and developed a comprehensive legislative package including:
1) Public procurement in general (general law): Procedures for the Conclusion of Public Procurement and for Relevant Issues Law of 2016 - 73 (I) / 2016 (Public Procurement Law – PPL)
2) Specific eProcurement regulations:
- the Law on the Regulation of Procurement Procedures for Bodies Operating in the Water, Energy, Transport and Postal Services and Related Issues of 2016 - Law 140 (I) / 2016
- Accounting and Financial Management and Financial Control of the Republic Law – Law 38 (I) / 2014
- Procurement Contracts (Supplies, Projects and Services whose Estimated Value does not exceed Thresholds) Regulations of the Water Supply Councils of Nicosia, Limassol and Larnaca in 2013, Regulatory Administrative Act (RAA) 317/2013
- Law of 2011 on the Purchase of Clean and Energy Efficient Vehicles in Utilities
3) Dispute mechanism resolution and regulation:
- The Procedures for the Recourse (administrative appeal) in the Area of Public Procurement Laws of 2010 and 2011 (Consolidated Text) N.104 (I) / 2010
This legislations and regulations were integrated in different times within the public procurement system in Cyprus. Nevertheless, the legislators make sure that every law or regulation would be equally followed and in case of non-compliance, certain strict sanctions will apply, such as administrative fines.
IV. Institutional framework
The objective of the PPD as the competent authority in Cyprus for public procurement is to maximize economy and efficiency in procurement. This was set out with a number of targets including:
- fostering and encouraging participation in procurement proceedings by suppliers and contractors as in that way it promotes the EU internal market,
- promoting competition among suppliers and contractors for the supply of the goods, works or services to be procured,
- providing for the fair and equitable treatment of all suppliers and contractors,
- promoting the integrity and public confidence in the procurement process
- ensure the transparency in procedures relating to procurement to be and be seen as fair
- achieving the above enhances the concept of value for money in procurement. Public procurement is extremely significant for the Cyprus Economy as the annual spending through procurement is just below 10% of the GDP (close to EU average).
The network was composed by different bodies which are all responsible with certain tasks. As previously mentioned, the Treasury is responsible for the implementation of the project throughout its design, development and arrangement, therefore makes sure it follows clear lines for better application. The Department of Information Technology Services assists on technical aspects, such as providing the internet gateway for the system to run. The Attorney General and the Auditor General play an important role for the achievement of a comprehensive system. Although they are not directly involved in public procurement activities, their consultation o drafting the relevant regulations which govern the use of the system and its design are essential. Finally, the contracting authorities and economic operators and their organized representatives have a fundamental role in Cyprus public procurement system. Both actors are directly involved during the design phase of the system to assist identify the purchaser’s and seller’s side.
Some of the major features of the eProcurement system (specifically of the framework agreements and e-catalogues) are:
· Standard bidding procedures are followed by a notice
· Duration up to four years with few exceptions
· Right of use to those Buyers declared from the outset
· It does not entail a purchase obligation from the Contracting Authorities and this will force Suppliers to offer good quality at competitive prices (Value for Money)
· Tool for implementing environmental and social policies
· It significantly contributes to reducing administrative burdens
· Big savings in transaction costs are achieved
V. eProcurement reform: Business and Technology Considerations
The major requirement of the reforms and the transposal of the EU laws in the Cyprus public procurement system was for all awarded public contracts to be in a web portal. This was achieved with the implementation of the ePS platform.
As it has been previously mentioned, the ePS is a web-based online application which hosts the implementation of electronic procedures in conducting public procurement competitions in Cyprus.
The system constitutes an example of efficient and flawless compliance with the European laws in public procurement proceedings in Cyprus.
The portal provides:
Contracting Authority Services, i.e. a collaborative eProcurement environment for organising calls for tender related activities. Services provided support the management of electronic competitions, including electronic preparation and transmission of procurement notices to the Official Journal of the European Union. Advanced services include automated evaluation of tenders, automated notification of Economic Operators when addenda/corrigenda for competitions are published, and support for electronic auctions.
Economic Operator Services, for transparent and secure preparation and electronic submission of requests for participation to tenders. The system is managed by the Public Procurement Directorate of the Treasury of the Republic of Cyprus and was the recipient of the 'Good Practice Label' of the 4th European eGovernment Awards, 2009.
Additionally, on September 14th 2011, the Treasury of the Republic was awarded the Innovation Award of 2010 for the wider public sector by OEB for the development and implementation of the eProcurement System. This acknowledgement complements the success of the ePS to classify Cyprus, for two consecutive years, first in the area of eProcurement amongst the Member States of the EU, something that was achieved for the first time by the Republic of Cyprus in the comparison of the 20 basic public services for e-Government.
How it works?
The platforms on the ePS differ according to the procedure. There are different platforms for pre-tendering and others for post-tendering. In pre-tendering there are 3 platforms: e-Registration, e-Notification and e-Tendering and they all have different functions:
- Free registration of Economic Operators –Need to be verified by the Administrators
- Controlled registration of Contracting Authorities by the Administrators
- electronic preparation of CfTs and Notices OJEU, OG, publication of tender docs, define tender structure
- Questions and Answers, Clarifications, Addenda, automated notifications
- Upon Publication of a Tender, all economic operators are notified if it is in their line of business
- electronic preparation and submission of tenders online/offline tender preparation tools,
- tender verification with immediate economic operator’s feedback
- tender encryption, tender time stamping
- two-phased tender submission for large tenders
Accordingly, post tendering is also divided in different platforms:
e-Evaluation / e-Awarding:
secure electronic tender opening, automated evaluation using Lowest Price or MEAT, contract awarding process handling and communications, support for lots
e-Auction (used as extension to the tender evaluation process):
Support for three auction types, user’s connection monitoring tool, chat-based communication for online support
E-Catalog is an autonomous eProcurement application that offers a web-based and multi-lingual platform to public officials and economic operators. It is based on open source building blocks and is consisted by 2 components of the online purchasing process: the online catalogue and online orders. The platform offers possibilities for managing some conventional e-mail activities, such as e-ordering. Of major importance is that access to the application is always safe.
As a best practice, the implementation and operation of eCatalogue and framework agreements have significantly eradicated the administrative burden, as framework agreements do not have to be published individually, therefore adding to a time-saving practice and eliminating administrative costs.
e-Catalogues usually exceed 1000 type of products they have on display, amongst other they are:
- Personal Computers and peripherals
- Portable Computers and peripherals
- Printers and fax machines
- Projectors and other office equipment
- Stationery items
A major feature of the ePS system in the e-catalogue is the e-Agora platform. Τhe implementation of e-Agora has boosted e-Government amongst small companies as it:
- gives the opportunity to set-up electronic catalogues cost-free
- has their products displayed to Contracting authorities for low value purchases
- uses these catalogues as a reference with their business partners
- receives and processes orders electronically throughout the validity of their catalogues
e-Agora assists the public sector in avoiding direct awards as it gives the opportunity for price updates resulting in better prices and further reductions in administrative costs.
- Photocopy paper
- Plastic pipes and equipment
- Ductile iron pipes and equipment
- General Medical Consumables with more than 2.000 products
Statistical analysis and regulatory reporting on annual procurement activity, regulatory reporting per CfT
VI. eProcurement reform forms a part of the e-Government reform programme
The eProcurement reforms in Cyprus were not an independent-driving process, but an essential part of e-Governemnt project that started in 2010-2011. The latter was initiated in March 2014 when the publication of the intention of Contracting Authorities to publish a competition prior to the actual official procurement process became mandatory so as to assist SME's participation in public procurement competitions.
This was implemented online via a new functionality introduced on the eProcurement System. The Government Secure Gateway started its pilot operation and was given the name Ariadne. Ariadne enables users to access the electronic services (eServices) that are made available by the Government of Cyprus over the Internet.
Through Ariadne, citizens can be served quickly and easily, 24x7. The system aims to the full electronic completion of a service, by retrieving required information from the interconnected back-end systems, thus reducing or abolishing any bureaucratic procedures. Individuals, organisations, and agents are required to register to login to the system. Ariadne has provided the platform with the necessary common core services enabling the delivery of eServices and the execution of online transactions in a secure manner (e.g. user identity management, security infrastructure, transaction routing and processing, application integration, certificates and other information, payment engine, etc.).
VII. Centralised purchasing based on eProcurement tools
The Cyprus eProcurement application is developed utilising Open Source Software. There is a Centralised approach followed due to size specificities as there are many small contracting authorities due lack of capacity and financial viability of more than one eProcurement system and uniformity in application of eProcurement throughout Cyprus. However, the procurement and management of competitions remains decentralised as each CA is responsible for its own procurements.
In Cyprus there is currently only one eProcurement System, serving all Contracting authorities for free, for all types of competitions and for all types of procedures.
- Avoided any strict policy or decision-making actions to be transferred to the system in order to fit all Contracting Authority needs
- Allowed Contracting Authorities to use the system in as much depth as they feel appropriate in order to work on change management. Publication of notices is however mandatory to secure at least the initial system utilisation
- Extended system functionalities with e-Catalogues and e-Ordering modules incorporated in the core eProcurement System
- Emphasised promotion and change management activities via a Promotion Contract
- VIII. Key benefits of eProcurement
Enhancement to e-Government :
- Since its early implementation, nearly 6.000 Economic Operators have been registered on the eProcurement System using the internet to do business with the public sector
- E-catalogues implementation assisted small companies that did not even have a website to build electronic catalogues of their products and accept and process orders electronically
- Economic operators in lines of business that traditionally are not IT literate (such as electrical supplies, building materials, paper and stationery, car batteries and tires, iron and plastic pipes) are now actually transacting electronically with the public sector including the electronic submission of tenders and the setting up of electronic catalogues
- The introduction of e-Agora will give the opportunity to companies transacting on traditional means to set-up electronic catalogues and gear towards electronic commerce
Practice has shown that electronic means are the future in public procurement as the use of electronic tools and procedures are more efficient time and costly-wise.
IX. The way forward
eProcurement in Cyprus has facilitated major improvements in the conduct and the objective of public procurement area. The core plan is to develop a comprehensive and complete technological model which will ensure that knowledge and skills are used in effect to achieve transparent and low-cost effective procurement procedures and strengthen strategic decisions towards public spending reduction. In these regards, some further steps have been suggested by the competent authority:
- focusing in increasing the variety of products offered via e-catalogues to users of the wider public sector as a result of concluded framework agreements
- further strengthen the use and practicality of e-Agora that will greatly boost eGovernment amongst small companies as they will be given the opportunity to set-up without any costs electronic catalogues
- will have their products displayed to Contracting authorities for low value purchases
- will have the opportunity to use these catalogues as a reference with their business partners
- will receive and process orders electronically throughout the validity of their catalogues
X. Lessons learned
The technical specifications have been based to a large extend to the Functional and non Functional Requirements on Public Procurement documents disseminated by the EC in 2004, which were available to everyone. This underlies an important message: when in need, if you search assistance and/or guidance you will avoid the costs and pitfalls associated to the effort to reinvent the wheel. However, this is not a one-side game; there must be a lot of effort on behalf of the PPD to cater for the specificities of the Cyprus public procurement market. It is this combination though that has turned the Cyprus eProcurement System into a success story.
- ’’When there is a will there is a way’’. Dedication is essential to achieve the best result possible for the conclusion of a task, but flexibility is also significant as it helps you to get there.
- There must be a very good, coherent organization plan when there is a change of management, promotion and dissemination of results in order to build trust and get the end-users familiarized and open up to the concepts of something new, and this applies to eProcurement too.
- Recognise key stakeholders in the market and involve at early stages in order to gain support and create the momentum for system uptake. Be positive and create anticipation for something good (CAs and EOs)
- •’The best critic is self-critic’’. Realizing the weaknesses of the system and try to make strengths out of them (i.e. procurement of notices)
- Identify the market forces and drivers of change and use them to your advantage.
- ’’Forests take hundreds of years to form but it only takes a moment to destroy’’. Keep focused in managing the implementation of electronic systems because once the trust and confidence of the users is lost it will take a lot of time and effort to rebuilt.
 Philippos Katranis, Public Procurement Directorate, Treasury of the Republic of Cyprus, Europeone e-Government Conference: Presentation in the context of Session 4: European eProcurement, Cyprus eProcurement platform & e-catalogues Module and Electronic Marketplace, 4th December 2012.
 Phiilippos Katranis, eProcurement System of the Republic of Cyprus, Joinup for the European Commission https://joinup.ec.europa.eu/community/epractice/case/eProcurement-system-republic-cyprus, 24th of November 2008, as accessed 24th July 2017
 P. Katranis (n.1)
 European Commission, e-Government in Cyprus, February 2016, Edition 18.0
 DG GROWTH by PwC EU Services EESV Contract reference, eProcurement Uptake - Final Report (Cyprus), 23 April 2015, pg. 72
 European Commission (n.5)
 As registered in 2012
 P. Katranis (n.1)
 P. Katranis (n.1)