1 The Portuguese Public Procurement Case PUBLIC DEMAND OF INNOVATION FOR: Efficient Public Services and Competitive European Industries & SMEs Madrid, 2nd October 2012
2 Restructuring Program of the State s Central Administration 2007: Decree-Law 37/2007, 19 th February Definition of the Sistema Nacional de Compras Públicas (The National System of Public Procurement - NSPP) Establishment of Agência Nacional de Compras Públicas (The National Agency for Public Procurement - NAPP) The National Agency for Public Procurement, established in 2007 under the Restructuring Program of the Central State Administration (PRACE), has as main objectives the organization, professionalization and modernization of public procurement and management of State Vehicles, the rationalization and reduction of public spending on goods and services, in order to obtain savings, modernization of public administration and improved competitiveness among state s suppliers.
3 The National System of Public Procurement (NSPP) Main features: Hybrid model, based on a central management entity (NAPP) articulated with ministerial purchasing units (MPU) and purchasing entities, operating in a network; Integration of: o purchasing entities by law Mandatory entities o purchasing voluntary entities; Centralisation of the purchasing at NAPP or MPU; Acquisition under framework agreements established by NAPP; e-tendering and e-awarding are mandatory in public procurement since November 2009
4 eprocurement Strategy Government Commitment Legislation 30 Jun Jan OCT DL 18/2008 (CCP) [EU Directive] DL 143-A/2008 As of 1 st January 2009 the electronic platforms are to be certified under the 701-G/2008 order All public procurement must be awarded using electronic platforms from this date onwards Implementing Order n. 701-G/2008 Mandatory electronic use Electronic tools enotices etendering eclarifications equalification enotifications All tendering processes: eproposals List of tenderers econsultation
5 The National System of Public Procurement (NSPP) Key Stakeholders Government Ministry of Finance Contractors/ Suppliers NAPP Interministerial Advisory Committee Community/ Society MPUs (15) Contracting authorities and entities (mandatory and voluntary) MPU: Ministerial Purchasing Units
6 The National System of Public Purchasing (NSPP) NAPP Defines, by means of regulation, the working rules of NSPP; Launches international public tenders in categories of goods or services aiming to award framework agreements. Provides the required support to MPUs, mandatory and voluntary entities in what relates to NSPP, the awarded framework agreements and tendering processes; Leads centralised call off procedures for defined categories (vehicles and insurance); Manages and supervises the centralised technological tools developed to support e-procurement procedures. MPU Are pivotal amongst NAPP and all mandatory entities operating under each Ministry (links / network system); Collect, validate and compile data on public purchasing from all entities operating under their respective Ministry; Launch call offs under the framework agreements for the categories, on behalf of the mandatory entities; Prepare and submit yearly to NAPP their Annual Ministerial Plan for Public Purchasing. NAPP will then compile the data submitted by all MPUs, prepares and submits the National Plan for Public Purchasing to the Minister of Finance. National Agency for Public Procurement (NAPP) / Ministerial Purchasing Unit (MPU)
7 Developing a New Centralised Procurement System Keystones Emphasis on savings and efficiency; Mandatory constrains (to central administration); Aggregation of demand on NAPP / MPU; Purchasing centralization on NAPP / MPU; Goods and services standardization/ Framework agreements. Voluntary system (local and regional entities and state-owned companies); Increase of usage of electronic tools. Contracting Authorities Market Contracting Authorities MPU NAPP FA Contractors Individual Direct Awards or Public Tenders Aggregation of demand on NAPP / MPU Purchasing centralisation on NAPP /MPU National Agency for Public Procurement (NAPP) / Ministerial Purchasing Unit (MPU)
8 Centralized Model -Framework Agreement (FA) for Contracts and Acquisitions i i NAPP Ministry Purchasing Units (MPU) Selecting suppliers and awarding the best proposals for each Framework Agreement (FA) Acquisitions of goods and services categories available in the framework agreements (Call Off Stage / mini-competition) Public Tender Supplier Selection Request for Proposals Awarded Suppliers Request for Proposals Negotiation Awarding Public Tender announced via OJEU notice. Tender documentation available online Supplier technical and financial selection criteria Technical and functional requisites, contract requirements and economic proposal evaluation Contract awarded to the most economically advantageous tenders OR to the lowest price tenders Invitation for tendering to all the awarded suppliers (FA contractors) E-auction or traditional negotiation Best proposal (the most economically advantageous proposal OR the lowest price), as defined on the FA Framework Agreement Centralization Purchase of goods and services categories under the FAs are mandatory for the central public administration Centralization of acquisitions of goods and services under the FAs NAPP can opt to centralize the acquisitions of goods and services covered by the FA (example: Vehicles and Vehicle Insurance)
9 Recent # Volunteer (Total a 31Ago12: 482) Local State Owned Companies 70 State Owned Companies 82 Others YTD 31Ago12 0 Autonomous Regions 46 Municipalities 260 Contracting Authorities Volunteer Framework Agreements Today, more than entities are in the National System of Public Procurement
10 Framework Agreements 2008/2011 Spending categories Car and Motorcycle Insurance Cleaning Services and Products Electric Vehicles Energy (incl. Electricity) E-procurement Tools Valid as of Feb 2011 Aug 2010 Sep 2011 Nov 2011 Jun 2009 FA Contractors qualified and selected Suppliers (70%+ are SME) Annual Public Expenditure addressed via the Agency s framework agreements: Fuel and LGP Hardware Landline Communications (voice and data) Sep 2008 Aug 2011 Jun MEUR (about 80% of total expenditure transverse to NSPP entities) Meals Jul Savings : Mobile Communications Sep Estimated: 150 MEUR Office Furniture Paper and Stationery Mar 2010 Apr Achieved: 168 MEUR (+12%) Printing and Copying Apr Framework Agreements Security and Surveillance Services Apr Software Licensing Sep Travel and Accommodation Sep Vehicles and Motorcycles June
11 Framework Agreement Development Conceptual model by NAPP Identification of annual expense Evaluation of the public administration needs Market s solutions review Public Administration Consultation Concept model and technical solutions review with all ministries Preparation of technological solutions to include in the FA Term of the framework agreement, FA criteria award,... Technical Validation by experts Review and validation of products and services specifications Public Consultation Economical operators, associations, public administration & citizens
12 Policies supporting SME, SBA implementation Public Procurement The Portuguese Government adopted a transparent and competitive approach in several categories of goods and services covered by framework agreements, under the National Public Procurement System, mandatory for all central administration and public institutes (+1800 entities). Between 2009 and 2011, ANCP, the system manager developed over 20 public tenders, dully publicized in OJEU, in order to celebrate and renew 17 active framework agreements, covering Eur M, 80% of transversal public expending. Through the Portuguese e-procurement solution, SMES are able to better access public markets, either isolated or inassociation, i inorder to improve scale. In designing i the tenders, several measures were taken according to the principles of the SBA, like creation of lots, regionally and by size, adaptation of requisites to the economic dimension of the markets, or multi-access criteria. Currently SMES account for 70% of the System s 250 suppliers. The renewal rate of framework agreements in 2011 was 33%, stimulating competition and larger presence of SMES, and new categories were included (electricity, travel and accommodation) and others are being analyzed for further development. E- procurement is mandatory in Portugal, with the country reaching an utilization ratio of 91% in 2010.
13 Policies supporting SME, SBA implementation Reduction of administrative burden E-procurement improved dramatically the access conditions of economic operators to public markets, regardless of size or location. New measures are being taken in order to improve its usage and capabilities. Through the Council of Ministers Resolution n.º 12/2012, of Jan , the Portuguese Government envisages the development of a B2B platform to expand the public procurement chain currently covered by e-procurement, allowing an extent of the process covered by electronic means, from source to pay. The conceptualization of the project is already concluded by ESPAP, allowing the government to identify technical and functional specifications, costs and governance model. A global platform of centralized monitoring of public procurement P2P (Purchase to Pay) will permit a better understanding of public spending and will become a concrete tool to boost optimization and rationalize public expenditure. Implementation will start in 2012.
14 Policies supporting SME, SBA implementation Demand side innovation policies Through the National System for Public Procurement, the Government managed to improve innovative-driven policies in specific economic sectors, and tried to stimulate demand in new markets, like electric vehicles. Also, in several categories of goods, like hardware or vehicles, ecological and TCO indicators were used and considered in terms of awarding criteria.
15 Policies supporting SME, SBA implementation Green economy, sustainable industrial policy The assessment of the National Green Public Procurement strategy for the period ending Dec.2010 was quite positive, with over 56% of procedures and 60% of total value of goods and services awarded having green criteria. The new strategy for the period running until Dec.2013 is currently being approved by the Government and it is designed to improve monitoring and control, and also follows the EU recommendations in this field, with more categories covered, including public works and waste management, and a larger use of green awarding criteria. It is expected that it will fix more demanding goals, with a 65% green criteria coverage in central administration and the inclusion of regional and local entities. In the public tenders run by ESPAP in 2011, ecological requisites, social responsibility and energy efficiency criteria were reinforced and utilized either in the selection of suppliers, or for the awarding phase.
16 FA Lots Region Subcontracting Contractors t / SME Paper & Stationary Paper Stationary Consumables No Yes 30 / 26 Printing & Copying Scanning Fax Portable printers Printers (Low, medium, high performance) Combine lot No Yes 21 / 18 Cleaning Services & Products Services Products North, South, Alentejo, Lisbon, Algarve, Azores, Madeira and National Level. (NUTS II) Yes 15 / 10 Security &Surveillance Services Surveillance Alarm Receiving Centre & Monitoring services Combine lot North, South, Alentejo, Lisbon, Algarve, Azores, Madeira and National Level. (NUTS II) Yes 8 / 0 NUTS: Nomenclature of territorial units for statistics / NUTS II (Basic regions for the application of regional policies)
17 Monitoring i the performance of Framework kagreements Management Information System Real Data Management Information eagregation ecatalogue Accounting and Finnance etendering Platform
18 eprocurement What we want to achieve in future - Global Vision Key issue: lack of integration of information along the procurement process making difficult to control and monitor the end to end process - Control of the Payments cycle is crucial to control the contract management and the aggregation needs. Solution: develop an end-to-end technological model to ensure not only transparent and cost effective procurement processes, but also the construction of the knowledge base that is needed to support strategic decisions towards public expenditure reduction and optimization. e-sourcing e-aggregation e-tendering / e- awarding e-contract e-catalogue e-ordering e- invoicing e- payment
19 Monitoring i Framework kagreements Identify and measure the spenditure and savings for each FA
20 Monitoring i Framework kagreements Monitoring Contracts made between Suppliers and Public Entities
21 The Agency s website Integrated Procurement Solution
22 National lpublic Procurement ecatalogue Supplier Good Description Price
23 National lpublic Procurement ecatalogue Example : Compare Products - By Two Supplier; Characterists; Price; SLA; ( )
24 Tendering Platform Overview
25 Tendering Platform Overview Monitoring in Real Time all the call-offs under the FAs
26 eprocurement end to end integration process Strategy benefits The Agency believes that implementation of this model will allow it to pursue its mission along three key strategic dimensions: Financial obtaining much needed savings and public expenditure reduction both in the short and the long term; Political l throughh completely l transparent, t rigorous and efficient i procurement processes; Social providing a better service for all stakeholders, achieving their buy-in and contribution, alongside a fundamental cultural change in the Public Administration towards the effective use of taxpayers funds. Transforming eprocurement as part of public procurement strategy Build common processes based on functional design, business process & supplier interfaces Create t a shared value sustainable solution reducing investments t for the Government; Manage Procurement as a strategy area of Government Promote corporate Governance in electronic Public Procurement.
27 2012 Creation of the Entity for Public Shared Services, Decree of Law 117-A/2012, 14th of June
28 Where to go? How we organize? Complex organization model How? No normalization and same process repeated in every public organization Organization and HR Business Processes Technology What do we have? Working like silos, not sharing information and no integrated services What do we have? Redundancy (in HR there is more than 150 solutions) 28
29 eprocurement Interoperability Platform to achieve - end to end integration process Public Procurement Common Model Data integration Source-To-Pay Solution Interoperability: From a Problem to a Solution Identify the key interoperability data from Procurement Process that shall be exchanged ( E.g. Consulting a contract, receive a order buy, update a e- catalogue ); Define Standard base solutions for IT Providers; Integrating effective e systems. stems API Service Oriented Architecture Provide a Set of Services related with Public Procurement Business Innovation Market Value.
30 Enterprise Architecture Compras PVE Compras (F-e) PVE (F-e) Compras PVE
31 Public Procurement in Portugal Major challenges: Increase centralization and dynamics in NAPP; Increase the number of entities in the National Public Procurement System; New wave of framework agreements (version 2.0): create new categories and further improve the renewal of existing framework agreements; Implement new Strategy for Green Public Procurement, with criteria revision and update; Develop the Technological Model, end-to-end, full scale and integration; Conducting training and awareness sessions, skills development and full usage of electronic means to support public procurement; Monitoring results and performance of the framework agreements. Maintaining sustainability and delivering value
32 Questions 32
33 Thank You