Delhi, India to set up ‘comprehensive’ e-procurement system

Encouraged by the success of its e-Tendering system, the Municipal Corporation of Delhi plans to now work towards a comprehensive e-Procurement system.

A little turn of phrase on astronaut Neil Armstrong’s famous proclamation once he set foot on the Moon may be one way of describing the spirit with which the Municipal Corporation of Delhi (MCD) has approached e-governance. A small step for e-governance, but a giant technology leap for municipal corporations.

Two years ago, when the MCD’s engineering department introduced an e-Tendering facility, it marked a departure from the traditional, paper-based system of tendering at one of the largest municipal bodies anywhere in the world. With due respect to Armstrong, it wouldn’t be an exaggeration to say that the task of change management in such a large government organization has been more difficult than a walk on the moon’s surface. Or as he put it after the moon landing, “a giant leap for mankind.”

The MCD has a staff of over 100,000 across a host of departments — 107 offices in 12 geographic zones — that cater to 1.4 crore citizens. Three years ago, not all of MCD’s offices had an Internet connection and computers. Neither did it have it’s employees’ willingness to move to a technology platform for operations.

Yet, the same officials who experienced the challenging migration to IT-enabled mechanisms today believe that the job is only half done. Figures suggest that the e-Tendering process has achieved significant time- and resource-efficiencies. For instance, over 30,000 tenders have been transacted through the e-Tendering system by MCD, making it one of the world’s highest volumes in numbers by any government organization.

But MCD officials are not satisfied with what they have achieved in their efforts to fully automate the procurement process. Ask Arun Kumar, an executive engineer at MCD who has become the face of the IT initiatives in the corporation. “The e-Tendering mechanism has not yet improved the time and process efficiencies as much as we would like,” he says modestly. “This is because only the part of the system that concerns tender receipts has been automated, with great success. So, while this portion has been simplified for the contractors and for us, the approval cycle needs to be automated,” he says. Once this is done, the process efficiencies will follow.

Towards the end of this year, the engineering department is looking to announce EDIS, or the engineering department information system, which will develop the fully automated tool and integrate it with the existing e-Tendering system.

Well begun is half done

The e-Tendering system itself has helped MCD take huge strides in the preliminary stages of procurement. And it hasn’t walked the road alone. In May 2005, it outsourced the project to Wipro, which has now implemented similar systems for the Madhya Pradesh and Chhattisgarh governments. A similar project in the Karnataka State Police Housing Corporation (See Savings Up For Auction, CIO, January 1, 2006) has been widely documented.

“Governments are making process and structural changes more responsive and transparent in their functioning. The adoption of e-Tendering is a major step in this direction,” says Dr Anurag Srivastava, VP for consulting services at Wipro Infotech. “Organizations like MCD are at the forefront of adopting e-Tendering in their operations,” he adds.

The e-Tendering system has enabled MCD to post and amend tender documents, and view and compare bids online. This has substantially reduced administrative costs and eliminated the difficulties associated with paperwork. Earlier, a contractor would have had to make three visits — at the very least — to collect his tender application form and submit the required documentation.

Many times, contractors have missed a deadline by a few minutes because of the distance they’ve had to travel, recalls P.K. Khandelwal, superintendent engineer at MCD. Taking the process online has resulted in a level playing field for contractors. Transparency is the biggest benefit of the system, asserts Arun Kumar.

Contractors can now electronically download and upload tender documents, track the status of tenders and receive e-mail alerts. Wipro has also ensured that the payment gateway and issuance of digital certificates provide secure online payment options to the suppliers or contractors. “The implementation was done in a phased manner,” recalls Srivastava.

First, the tender purchase and download was made compulsory through electronic route. Then, the bid preparation and submission were made compulsory for all tenders above Rs 30 lakh (US$73,368). The value slab was reduced subsequently, he says. The application service provider set up the infrastructure to install and enable the electronic procurement system.

Second, it maintained an online/offline backup at the disaster recovery site, and ensured proper backup of each tender, enabling easy access and avoiding data loss in case of server failure. And third, it has provided onsite and telephonic help desk services with 24×7 service. “Currently, the data center and backend facilities are being provided by the corporation, and Wipro is engaged in maintaining and supporting the application hosted at the corporation’s data center,” explains Srivastava. The data center has been leased from the Centre for Development of Advanced Computing (C-DAC), adds Kumar.

The implementation has not been limited to roads and construction. “Following the early success in the engineering department, e-Tendering has been proposed for all types of products and services across all zones covering departments such as education, conservancy, sanitation, health and horticulture,” says Khandelwal. According to one member of the Wipro team in Delhi, the corporation has reduced the tendering cycle by 66 percent and increased the number of transactions it can conduct each week. Arun Kumar puts this statistic in perspective. While the figure is accurate, it doesn’t reflect the process efficiency in its entirety, he says.

“Earlier, several contractors showed interest in the tender notices that we put up, but the number of final applications was still limited,” he explains, attributing the absence of deserving candidates to cartels among contractors, coercions faced by some competitors, and difficulties posed by physical distances. “There used to be several complaints — lodged with the anti-corruption cell and the economic offenses wing — of a nexus between contractors, and of their musclemen putting pressure on other potential suppliers to withdraw their tender applications,” he adds.

Now, contractors can be sure of privacy and confidentiality of their tender proposals and simply upload their tenders online before the deadline. The security is based on the digital signatures and public key infrastructure technology to provide authenticity, integrity and non-repudiation to electronic documents.

“The issuance of digital certificates is unique to each individual and is issued by SafeScrypt/Tata Consultancy Services (certified authorities under the IT Act 2000),” explains Srivastava. During this data transfer, the data is encrypted with the digital certificate of the Web server and can be decrypted only by the same authentication.

Reining in the users

Adapting to the technology platform was no mean feat for users. While the MCD is yet to develop its own IT team, it went about change management by constantly engaging users with a range of technology-enabled functions using the prowess of IT vendors.

Since Wipro came on board in 2005, it has trained 300 users and 2,000 contractors. The MCD, on its part, put basic infrastructure in place, providing Internet connections in each of its offices and the wherewithal to bring all users on to one network. In 2003, it brought Hyderabad-based ECIL-SARK Systems to train Citizen Service Bureau users on latest technology in urban planning. Simultaneously, by engaging internal users in newer IT-enabled functions such as property tax management, MCD began to rein in the change.

“At the beginning, only 70 percent of the engineers at MCD were willing to even touch the computers,” recalls Arun Kumar. It took about six months for them to accept the change, adds Khandelwal. Even for the application service provider of the e-Tendering facility, the challenge was huge. “The training is an ongoing activity throughout the contract period of three years,” says Wipro’s Srivastava.

Initially the Class III and above contractors were invited to participate and subsequently all the contractors were invited through newspaper advertisements. The training consisted of a PowerPoint presentation in Hindi and hands-on training under the guidance of our trainers. User manuals and help files are also made available on the portal for anytime reference by users.

The training has been as critical to the success of the system as the technology. With the electronic system, it now takes an average of 30 days to process a tender as against 90 days in the traditional method.

The approval cycle, spanning two to three months, remains the biggest challenge in designing the comprehensive e-procurement tool. “The approval cycle is still a manual process — when the certifying authority checks the veracity of documentation with the Central Public Works Department and financial concurrence. Even the preparation of tender estimation is still manual,” rues Arun Kumar.

“We have started the trial run of the software to streamline this,” he adds. If the results are good, it could be integrated with the e-Tendering system next year.

For now, the transparency and equal terms for all contractors are the biggest takeaways of the implementation. “It has reduced the subjectivity in the process of selection,” says Kumar.

“Every contractor, in and outside Delhi, can now participate in the procurement process without the physical barrier and the intrusion of department officials has come down considerably. That’s how subjectivity has reduced,” he explains.

It has been an eventful year for MCD — from the traders’ protests last year against sealing of shops to its recent elections. On the technology front, however, the progress and change within the government organization has been silent but steady.

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