IsDB, e-GP and Indonesia
E-Procurement Forum: Enhancing Public SpendingDecember 2015, Vienna, Austria
Project Procurement (PPR) DivisionOperations Policy And Services Department (OPSD)Islamic Development Bank
Providing Resources, Fighting Poverty, Restoring Dignity.
Outline
1. Indonesia at a Glance
2. IsDB and Indonesia
3. IsDB and e-GP
4. IsDB and Pilot Program on e-GP in Indonesia
5. Lesson Learned, Challenges and the Way forward
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
1. Indonesia at a Glance
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
Indonesia at a Glance
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
Data
• Land 1,919,440 km2• With 17.508 islands• Population 255 million• Density 134/km2
GDP 888.5 billion
Growth:
4,67%
Poverty headcount
11.3%
Economical
2. IsDB and Indonesia
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
IsDB and Indonesia
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
No Sector Amount (million USD)
1 Agriculture 205
2 Health 64.97
3 Education 466.04
4 Transportation 152.55
5 Finance 0.45
6 Water and Sanitation 100
Grand Total 989
Totally 16 Active
Projects
0 100 200 300 400 500
Agriculture
Health
Education
Transportation
Finance
Water and Sanitation
IsDB Active Portfolio
3. IsDB and e-GP
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
IsDB and e-GP
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
The Government of Indonesia’s(GOI’s) procurement reformagenda already includes theintroduction of e-procurement ona phased basis. At the nationallevel, the development of aNational e-Procurement Systemhas been on-going since 2004 withfinancing by the IndonesianGovernment. Limited additionaltechnical assistance has beenprovided by the donor community
The new presidential regulationNo. 54/2010 will enforce theimplementation of the national e-procurement system in allgovernment administrationsnationwide by the end of 2012.This lends itself to significantgrowth in the number ofparticipating agencies, vendors andall Ministries over the comingyears.
LKPP e-GP System
MoPW e-GP System
IsDB and e-GP…
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
The World Bank issued its No-objection on using ofe-GP of MoPW for NCB, ICB, Consulting Services ande-GP of LKPP for only NCB in February 2014.
The Asian Development Bank issued its No-objectionon using of e-GP of MoPW for NCB, ICB, ConsultingServices and e-GP of LKPP only for NCB in August 2014.
The Bank has not any previous experience onpromoting or using of e-GP in its MCs. No projectunder IDB funded projects is using e-GP in Indonesia.
MDBs and e-GP in Indonesia
4. IsDB and Pilot Program on e-GP in Indonesia
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
IsDB and Pilot Program on e-GP in Indonesia
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
The Bank has not any
previous experience on
promoting or using of e-
GP in its MCs. Recently,
upon request received
from Government of
Indonesia for application
of e-GP in SANIMAS
Community Based
Sanitation Project, the
Bank Starts its
assessment as Pilot on
the application of e-GP
which is focused on:
①Review the legal framework for applicationof e-GP in Indonesia
②Review and assess the e-GP process andmethods are used in Indonesia taking intoaccount the results of similar assessmentsdone by MDBs presented in the country
③Review the compliance of application of e-GP in Indonesia with the procurementpolicy and procedures of the Bank
④Review the compliance of application ofthe e-GP system of Indonesia with MDB’se-GP requirements
⑤ Identify the potential risks and requiredmitigations on application of e-GP systemin the Bank funded projects
⑥Adaptation of relevant SBDs for being usedunder implementation of e-GP in Indonesia
⑦Review the customization needed to berecommended to GoI for using of e-GPsystem during the implementation offunded projects
IsDB and Pilot Program on e-GP in Indonesia…
Central Government Budget
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
Fiscal YearState Budget (billion USD)
2012 143.5
2013 168.3
2014 184.2
2015 203.9
Volume Procurement:
30% - 40% equivalent with60 – 81 billion USD
0
50
100
150
200
250
2012 2013 2014 2015
State Budget (billion USD)
IsDB and Pilot Program on e-GP in Indonesia…
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
1
• Inefficiency of State Budget Management: The government estimates thatcertain amount of state budget lost every year about 20% – 30% due toinefficiency associated with the procurement processes
2• Corruption Cases: Corruption Eradication Commission (KPK) stated 80% of all
corruption cases are associated with misused of public procurement.
3
• International and National Competitiveness: (i) Lack of capacity andopportunity to participate in national economy (small and medium enterprises),(ii) Lack of capacity and opportunity to participate in international market
4• High Cost Economy: Lack of competitiveness due to market asymmetric
information and closed market.
Current Issues
IsDB and Pilot Program on e-GP in Indonesia…
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
Procurement functions decentralized throughoutprocurement unit/tender committee from allprocuring entities
e-Procurement is implemented electronicallythrough decentralized e-procurement system knownas SPSE
All provincial, City and Districts have obligation toestablish e-Procurement Service Unit known asLPSE
By 2015, all procuring entities should spend100% of budget using e-Proc
As of 2015, success to establish 627 LPSE as single e-market place (54 Ministries/Agencies,…..etc)
IsDB and Pilot Program on e-GP in Indonesia…
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
Transparency
1. Mandatory to post tender announcement in publiclyaccessible medium (web portals)
2. Sequence of procurement processes can be monitoredby public
3. Increased quality of procurement information andcontract management for audit trail
4. Fostering participative monitoring and public oversight.
Effectiveness
1. Eliminating the costs of obtaining information about atender process that can be obtained without charge forregistered bidders.
2. Ease of tracking compliance, eliminate irregularities totake needed corrective actions.
3. Reduce cost of procurement advertisement onconventional media.
Efficiency
1. Reduce exhaustive manual process and procedure leadtime through e-tendering and the use of e-cataloguesystem.
2. Government budget savings gradually increased, fromaround 20% (2010) to around 30% annually, resulting fromhealthy competition and reasonable O/E calculation
Competition
1. Increased vendor database and number of participatingbidders to foster competition (registered bidder databasegrew by 200% from 2010-2012, though the growth ratebecome saturated at 3% in 2014)
2. Nurturing competition reflected in increased number ofparticipating bidders and limit the collusion amongst bidders/localcartels as face-to face interaction is no longer required
Impact of e-GP in Indonesia
IsDB and Pilot Program on e-GP in Indonesia…
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
5. Lesson Learned, Challenges and Way forward
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
Challenges Way forward
Lesson Learned, Challenges and Way forward
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
The IsDB’s assessment for implementation of e-GP in the Bank upcoming funded projects has been started in
August 2015 and is planned to be completed by end of December 2015.
1. Technological limitations:- Limitation in Bandwidth- Stability of the Internet Connections- Technical Capacity of the End-users
2. Introducing of SPSE version 4- Full e-procurement system
1. Prepare and draft an e-GP Strategyfor the Bank
2. Consideration of e-Procurement inthe Bank’s procurement policy duringits update
3. Join to the MDB’s e-GP WorkingGroup
4. Capacity Building Program for e-Procurement internally for Bank’sprofessional staffs and externally forMCs
Wednesday, December 02, 2015 E-Procurement Forum: Enhancing Public Spending
Thank You
معا ً نبني مستقبال ً أفضل Together we build a better future
Ensemble nous construisons un avenir meilleur
Project Procurement Division
Operation Policy and Services Department
www.isdb.org
prepared by Amirmehdi AsghariSenior Project Procurement Specialist
