E-Procurement Project in Karnataka: A Case of Public Private Partnership

Abstract

In the year 2004, the Government of Karnataka (GoK) decided to implement a state-wide e-Procurement Project. The objective was to develop a public pro curement system using the electronic platform to support its reforms in public procurement. Public procurement in India is fraught with many ailments and there is need for major reforms in this area due to serious issues like non-transparency in the process, nexus between contractors and government agencies, and preferential treatment for some. Government procurements are in general very large, complex, and driven by a complex set of archaic rules and procedures. In the year 1999, GoK brought in an important legislation to support its reforms in the area of public procurement – the Karnataka Transparency in Public Procurement Act, 1999. This legislation supports significant reforms in public procurement to achieve efficiency, cost effectiveness, and transparency. The total annual procurement by the State of Karnataka was in the range of `700 billion (about US$ 14 billion) at the start of this project. With a view of its strategic importance and ensuring compliance with the new legislation, GoK made the strategic decision of implementing a single, unitary e-Procurement System and develop the institutional set-up required to meet the challenge. One of the main objectives of implementing the e-Procurement System was to eliminate bidders’ cartels to promote healthy competitive bidding environment. GoK’s e-Procurement System is internet-enabled to support national and international bidding wherein suppliers can bid from any corner of the world. The portal has separate sections for citizens, contractors, and government users (Figure 1). The submission of bids happens in strict confidentiality. The e-procurement system facilitates free download of tender documents, enabling bidders to download tender documents anywhere/any time. The vision of the Project is to enhance efficiency and transparency in public procurement. The main aim is to enable the state government to maintain a clear picture of its procurement activities on a real-time basis, improve transparency in public procurement process, and provide equal, fair, and unbiased access to opportunities to the supplier community.