This publication is a compilation of abstracts of submissions made by procurement entities from Government, Public Sector, Autonomous, University or Research and Training Institutions following the Public Procurement regulatory f ramework, and NGOs/ CBOs involved in Public Procurement Management and Oversight Support in the South Asian countries of Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka for South Asia Procurement Innovation Awards 2017. This compilation of abstracts is prepared as a knowledge product for wider dissemination of innovative procurement practices in South Asia. It is based on the original submissions, edited and  with additional researched inputs, for providing a consistent presentation of all cases. The original submissions by the Award Winners are available at “https://www.procurementinet. org/sapia/”. This publication has not undergone the review accorded to official World Bank Publications. The findings, presentations,  interpretations, and conclusions expressed herein are those of author(s) and do not necessarily reflect the views of the  International Bank for Reconstruction and Development/The World Bank and their affiliated organizations, or those of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Copyright ©2018 by the International Bank for Reconstruction and Development/ The World Bank. Winners Afghanistan Independent Monitoring and Grants and Service Contracts Evaluation of Contracted Health Management Unit, Ministry of Public Services Leads to Improved Health, Kabul, Afghanistan Outcomes in Rural Areas of Afghanistan Bangladesh Innovations in Procurement Roads and Highways Department, Process and Selection that Dhaka, Bangladesh Lead to Improved Outcomes – Tenderers’ Database Management System Achieving Better Value for Money Dhaka Power Distribution Company Using e-Auction for Procurement (DPDC), Dhaka, Bangladesh of Goods by Public Sector – A Success Case from DPDC Bhutan Web-Based Online Evaluation Tool Construction Development Board, (e-Tool) for Procurement of Works Thimphu, Bhutan by Royal Government of Bhutan GNH Model for Procurement Jigme Namgyel Engineering College of Works that Ensures Social, (JNEC), Dewathang, Bhutan Economic, and Environmental Sustainability – Case Study on Successful Community Contracting in Bhutan India Unlocking Energy Efficiency Energy Efficiency Services Limited Market in India – Through (EESL), New Delhi, India Innovative Procurement Business Model GePNIC – A Futuristic Technology National Informatics Centre (NIC), Solution for Good Governance in New Delhi, India India Public Private Partnership for UP Health System Strengthening Laboratory Services in Public Project (UPHSSP), Lucknow, India Hospitals of Uttar Pradesh with Innovative Web-Enabled Verification Mechanisms Maldives e-Council System with Integrated Local Government Authority, Male, Procurement and Financial Maldives Management Driving Development in Maldives Nepal MIS-Driven Roster of Individual Poverty Alleviation Fund (PAF), Consultants Enabling Kathmandu, Nepal Achievement of Annual Targets in the Community Project of Nepal’s Poverty Alleviation Fund Pakistan Pointer – Eyes and Ears of Project Southern Area Development Project, Supervision for KP-Southern Area Dera Ismail Khan Development Project KPK, Pakistan Sri Lanka Guide to Project Management and Ministry of Finance and Mass Media, Contract Management (GPMCM) Colombo, Sri Lanka – New Approach to Improve Efficiency and Effectiveness of Procurement Outcomes Foreword South Asia Procurement Innovation Awards, now into their successful second edition, celebrate the most forward-thinking efforts made during 2017 by public sector procurement entities in 8 countries. The Awards recognize the innovative thinking that has gone in and the way information and communication technology has been seamlessly utilized towards achieving better value for money, efficiency, and transparency in a wide range of procurement scenarios. With 78 submissions and a winner selected for every country, these coveted Awards are a feather in the cap of procurement professionals in South Asia. The wide-spread response and acclaim that these Awards have received make it clear that they are here to stay for many more years. The second successful conclusion of the Awards reaffirms the strong partnership between members of the South Asia Public Procurement Network (SAPPN), consisting of all procurement policy and regulatory bodies of the region, the World Bank, and its knowledge and networking platform Procurement iNET. This partnership goes a long way in achieving the objectives of enhancing learning and knowledge sharing with regard to innovative procurement practices adopted within the South Asian countries. A review of the submissions shows that public procurement is moving away from mere administrative and operational focus to strategic thinking for delivering developmental objectives of institutions. There are clear evidences that procurement processes are driving Social, Economic, and Environmental Sustainability; with transparency and enhanced efficiency. I congratulate each and every winner from Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. I also compliment rest of the entities that have submitted highly competitive and commendable submissions. I take this opportunity to thank the heads of procurement and their offices in all South Asian countries for disseminating information about the Awards and encouraging procurement entities to participate in the Awards’ competition. I do wish this initiative widely spreads information about the good and innovative procurement practices of each country; practices that can be adapted by many institutions involved in procurement and contract management in other countries. I hope this compendium of innovations in South Asia becomes a ready reference for procurement professionals and practitioners across the world. Elmas Arisoy Practice Manager Solutions and Innovations in Procurement (SIP) Governance Global Practice (GGP), The World Bank Introduction “In procurement, ideas that win are ideas that work!” Seventy-eight submissions received from 8 countries for the South Asia Procurement Innovation Awards 2017 resonate the above message sent across to procurement entities from November to December 2017 for participating in this keenly contested competition. The 12 winners featured in this compendium represent ideas that range from the power of consolidating demand in procurement for influencing production and pricing strategies in energy-efficient products; utilizing advancement of remote sensing and mobile-based voiceover technologies for monitoring and measuring contract performance; to integrating procurement with other local administrative functions through web-enabled e-councils for efficiency gains in island nations. In general, submissions in this second edition of the Awards have been of a higher quality, focusing on issues like integration of e-procurement function with other business processes of entities; using newer methods in procurement for reducing administrative processes; a renewed attention to effective contract management, etc. There have also been discernible efforts seen towards eliminating possibilities of disputes. This compendium summarizes the 12 winning case stories from Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. They are edited and abridged presentations of original submissions, with additional research inputs incorporated for standardization. Original detailed submissions are available at https://www. procurementinet.org/sapia/ South Asia Procurement Innovation Awards 2017 has become a success owing to extensive cooperation and support received from public procurement entities that took out time and made efforts for submitting their case stories. We thank them for their enthusiasm and active participation in the competition. Heads of Procurement in South Asian countries have promoted the Awards extensively among their departments, public sector enterprises, and other eligible bodies for participation. World Bank Country Focal Points for Procurement and other staff too advocated with their counterparts; and without their active interest, we would not have achieved this success. We also place on record our appreciation of Ms. Elmas Arisoy, Manager-South Asia, Solutions and Innovations in Procurement, World Bank, for her guidance and support. Further, we would like to thank Mr. Plamen Kirov, Mr. Naushad Khan, Ms. Payal Malik Madan, Ms. Yodit Rezene, and Mr. Varun Malhotra for their efforts towards successful conduct of Awards 2017. Information Technology support extended by C&K Management has ensured seamless online submission and ease of access for participants from anywhere in South Asia at anytime. We would like to thank the C&K team led by Mr. Ravi Ramakrishnan and Mr. Mohammed Ishaq, Mr. Srinivas Balusu, and Mr. Naveen Pammi for their support. Editorial support from Mr. Rajaram Sankla is also highly appreciated. A K Kalesh Kumar Coordinator, SAPIA 2017 Contents Afghanistan Page Winner Independent Monitoring and Evaluation of Contracted Health Services Leads to Improved Outcomes in Rural Areas of Afghanistan...........................................................................1 Bangladesh Winner Innovations in Procurement Process and Selection that Lead to Improved Outcomes – Tenderers’ Database Management System ....................................................................................7 Runner-Up Achieving Better Value for Money Using e-Auction for Procurement of Goods by Public Sector – A Success Case from DPDC........................13 Bhutan Winner Web-Based Online Evaluation Tool (e-Tool) for Procurement of Works by Royal Government of Bhutan .................................................19 Runner-Up GNH Model for Procurement of Works that Ensures Social, Economic, and Environmental Sustainability – Case Study on Successful Community Contracting in Bhutan..............................................................25 India Winner Unlocking Energy Efficiency Market in India – Through Innovative Procurement Business Model .................................................................... 31 Winner GePNIC – A Futuristic Technology Solution for Good Governance in India ...........................................................................37 Runner-Up Public Private Partnership for Laboratory Services in Public Hospitals of Uttar Pradesh with Innovative Web-Enabled Verification Mechanisms................................................................................................ 43 Maldives Winner e-Council System with Integrated Procurement and Financial Management Driving Development in Maldives ........................................49 Nepal Winner MIS-Driven Roster of Individual Consultants Enabling Achievement of Annual Targets in the Community Project of Nepal’s Poverty Alleviation Fund ...........................................................................................55 Pakistan Winner Pointer – Eyes and Ears of Project Supervision for KP-Southern Area Development Project........................................................................... 61 Sri Lanka Winner Guide to Project Management and Contract Management (GPMCM) – New Approach to Improve Efficiency and Effectiveness of Procurement Outcomes...............................................................................67 South Asia Procurement Innovation Awards 2017 Citation The submission from GCMU, Ministry of Public Health (MoPH), is awarded the winner for Afghanistan SAPIA 2017 for its efficient monitoring of health service delivery implementation efforts by linking performance and payment to service provider NGOs with a third-party monitoring process. The third-party monitoring agency measures a range of relevant outcome and process indicators against the service levels set for the health service verification of parameters set in provider NGOs, and a portion of the MoPH’s Health Management payments is linked to meeting Information System (HMIS), these indicators. The third 10% payment against the party, an International agency in health systems’ functionality, association with a local agency, as attested by the third-party produces data that helps GCMU monitor, and, finally, 80% of develop action plans, which are payment against submission implemented and followed up for of a quarterly technical report improvement of main indicators. is considered innovative for In Fragile, Conflict and Violence the demanding environment (FCV) environments, where in Afghanistan. The selection physical access to project areas recognizes that such third-party is not always available to project monitoring arrangements with authorities for security reasons, defined performance-based this approach is noteworthy for specifications can be best its effective contract supervision used with right approach for and management. The contractual procurement, viz. non-consulting arrangements of setting aside services, to deliver better 10% payment of the contracted outcomes and results. value to performance against 1 Independent Monitoring and Evaluation of Contracted Health Services Leads to Improved Outcomes in Rural Areas of Afghanistan {This article is an abridged version of the submission on “Independent Monitoring and Evaluation of Contracted Health Services Leads to Improved Outcomes in Rural Areas of Afghanistan” made by Mr. Khwaja Mir Islam SAEED, Head of GCMU, Ministry of Public Health, Kabul, Afghanistan, for the South Asia Procurement Innovation Awards.} Summary Afghanistan’s Ministry of Public Health both the overall achievement of the health (MoPH), through its Grants and Service sector as well as performance of individual Contracts Management Unit (GCMU), contracted service providers. The Third is using contractors to provide health Party monitors a range of processes and services to the Afghan people. To ensure outcome indicators involving the entire efficacy and efficiency of these services, health sector. Data thus collected is used the ministry has taken the international to evaluate performance and pay health competitive bid route to implement a Third service providers accordingly. Third Party Party Monitoring and Evaluation project. monitoring has also generated trust and The project has turned out to be a novel confidence within the public regarding the mechanism for collecting good quality health services they are getting. and independently verified information. This has ensured proper monitoring of Independent Monitoring and Evaluation of Contracted Health Services Leads to Improved 2 Outcomes in Rural Areas of Afghanistan South Asia Procurement Innovation Awards 2017 Maternal Mortality Rate (MMR) of 1,600 per 100,000 live births in 2002 has come down to 396 in 2015. The under 5 years’ mortality rate has dropped 60 percent from 137 per 1,000 live births in 2002 to 55 in 2016. Births attended by skilled health personnel increased to 58 percent from 14.3 percent. Helped the GCMU and NGOs to develop action plans for bringing improvements in the main health indicators. Background System and Health Facility Functionality In 2003, the Afghanistan Government Verification: Takes place decided to limit its role in health sector every half year. It directly to one of stewardship, involving policy monitors achievements setting, regulation and monitoring. of all contracted Non- Provision of actual services has State providers, who since been contracted out according are paid based on to specifications of the MoPH. This their performance and system was first introduced in all functionality verification. primary health care services and later followed by first and secondary 2. National Health Facility hospitals in the country. To monitor the Assessment with the use effects of this large scale contracting of a Balanced Scorecard: out of health service provision, the Takes place on an annual MoPH, through the GCMU, designed basis. The purpose is an independent Third Party Monitoring to summarize the performance and Evaluation project, for which a of Afghanistan’s provinces in firm was contracted after international delivery of the Basic Package of competitive bidding. The reach of Health Services (BPHS) as well as the Third Party, appointed in 2015, is the Essential Package of Hospital country wide and includes less secure Services (EPHS). This provides areas or areas with limited access for policy and decision makers government staff. evidence with regard to areas of strengths and weaknesses. 3. National Afghan Household Challenges Addressed Survey (AHS): The AHS is to Functions of the Third Party in the measure key health and nutrition most recent contract include: sector indicators within the population of all provinces 1. Health Management Information through a random survey of 3 24,000 households. Level of Innovation 4. Drug Quality Assessments (DQA): To improve performance of contractors The annual DQAs assess the quality (normally NGOs) in delivering health of drugs as collected from a sample services, the GCMU has moved away of health facilities throughout the from payment of a basic fee to an country, including laboratories. incentive system, where payment is based on performance. In the new system, 10% of the contracted amount is Impacts Generated paid against verification of parameters set in the MoPH’s Health Management Third Party Monitoring and Evaluation has Information System (HMIS). Another provided good quality information, which 10% payment is against the functionality has enabled Government of Afghanistan of health systems, as attested by a Third to improve health outcomes. For example, Party Monitor contracted by the GCMU. the Maternal Mortality Rate (MMR) of The final 80% of payment is made 1,600 per 100,000 live births in 2002 has following submission of a quarterly come down to 396 in 2015; the under technical report. All these three actions 5 years’ mortality rate has dropped 60 involve a specific level of performance percent from 137 per 1,000 live births in before payment is made. 2002 to 55 in 2016. Births attended by skilled health personnel increased to 58 The third party monitoring system has percent from 14.3 percent over the same improved monitoring of contractors period. Third Party data has helped the in the delivery of health services, GCMU and NGOs to develop action plans particularly in remote areas. The for bringing improvements in the main concept is innovative. Even though health indicators. The immediate impact it requires an additional cost for has been improvement in health services monitoring activities, it is outweighed and identification of deficiencies. These by the benefit of ensuring proper health assist donors and MoPH in understanding delivery to provinces. Introduction of a the overall status and focus on gaps that performance-based payments system need to be bridged. has provided more value for money. Independent Monitoring and Evaluation of Contracted Health Services Leads to Improved 4 Outcomes in Rural Areas of Afghanistan South Asia Procurement Innovation Awards 2017 Scalability and Sustainability These innovative ideas have been studied and applied in other countries as well to achieve better outcomes in their health procurement, particularly when they are operating in difficult and fragile environments and performance requires measurement and improvement. Contracts with service providers, mostly international and local NGOs, one or more per province, are based on a competitive bidding process and are handled by Grants and Service Contracts Management Unit of MoPH. Current evidence shows that in the long run, there is sufficient improvement when hiring a third party to monitor health services. It is possible to make this innovation part of all public procurement service offices, including works, goods, and consultancy and non-consultancy services in similar and even non-similar settings. Lessons Learned Despite the progress made, the MoPH has faced challenges when implementing third party evaluation. Delays in carrying out planned activities and late submission of deliverables/ reports are the main challenges during contract execution with the 3rd party, which undermines operational needs of the MoPH. When viewed holistically, however, procuring and contracting a third party monitoring system has heralded widespread changes in quality of health service delivery. The country-wide contracting out of health services is unique in the world. It shows overall good results in terms of increased access to health services and improved health indicators. However, effective and regular monitoring is necessary to ensure that health services are delivered successfully throughout the 34 provinces of Afghanistan. Many of these provinces are in remote and security-sensitive locations; hence health service delivery is difficult and knowing whether the contractor is delivering satisfactory services is a major issue. While MoPH is committed towards monitoring activities of the public health facilities, independent performance evaluation of BPHS and EPHS services is equally important. Independent collection of data and information related to health services will help remove potential biases that may arise while reporting performance of NGOs. Therefore, MoPH is committed to engaging an independent evaluator to objectively assess performance and progress in delivery of health services in Afghanistan. 5 Independent Monitoring and Evaluation of Contracted Health Services Leads to Improved 6 Outcomes in Rural Areas of Afghanistan South Asia Procurement Innovation Awards 2017 Citation The online Tenderers’ Database Management System (TDMS) introduced by Roads and Highways Department (RHD), Dhaka, is selected as the Country Winner SAPIA 2017. TDMS captures information and testimonials of tenderers, like post qualification information that, once verified, serves as an easy tool for evaluation process. When similar works and services from similar providers are repeatedly sought, such kind of effort aligned with Dashboard”, starting from country’s e-procurement system Preliminary Examination, is very useful for expediting Technical Examination, routine procurement. This is the Tenderers’ List, to Evaluation current trend seen in many well- History and so on. This helps developed procurement systems, capture previous experience with nationwide information and and saves considerable time performance databanks being otherwise required for filling created. In that direction, this up info by tenderers, and innovation from Bangladesh is also in manual evaluation of noteworthy. Though the RHD these by procurement entities. initially designed TDMS for For scalability, the Central 200 tenderers, it has already Procurement Technical Unit captured details of 800 tenderers. (CPTU) of Bangladesh is using 110 evaluations have been TDMS as a pilot and plans to use completed using TDMS. This it system-wide along with the serves as an “Online Evaluation e-GP. 7 Innovations in Procurement Process and Selection that Lead to Improved Outcomes – Tenderers’ Database Management System {This article is an abridged version of the submission on “Innovations in Procurement Process and Selection that Lead to Improved Outcomes – Tenderers’ Database Management System” made by Ms. Kazi Sayeda Momtaz, Computer System Analyst, Roads and Highways Department, Dhaka, Bangladesh, for the South Asia Procurement Innovation Awards.} Summary meet its information needs about tenderers’ qualification, capability, financial strength, The Roads and Highways Department of human resource, any litigation, and so on. Government of Bangladesh has evolved This leads to improved outcomes for the an innovative Tenderers’ Database Roads and Highways Department. The Management System (TDMS). The system same can also be customized by other is innovative because any evaluator can departments in the country for their use its database to easily, accurately, and own use. transparently complete evaluation of a tender document within 5-10 minutes. TDMS helps the Procuring Entity as Challenges Addressed well as tenderers build a repository of information and documents for their Collecting data for TDMS was challenging. own use from anywhere and anytime. Tenderers were reluctant in sharing their Procuring Entity can use data and information with the Roads and Highways documents of tenderers from TDMS to Department (RHD). The department arranged Innovations in Procurement Process and Selection that Lead to Improved Outcomes – Tenderers’ 8 Database Management System South Asia Procurement Innovation Awards 2017 About 800 tenderers registered with the TDMS. 110 evaluations are completed using the TDMS, which is considered a great achievement. Tenderers and Procuring Entity can store and update data and documents in TDMS. Procuring Entity is able to use data and documents of tenderers from TDMS to meet its information needs. workshops in different zones of Level of Innovation Bangladesh to encourage information sharing by tenderers, who were Following are the advantages assured by RHD that their data will be of TDMS: secure and safe. Tenderers were told • Tenderers and Procuring that they will be given their own user Entity can view / download IDs using which they themselves can necessary information update their data and ensure their and documents anytime, privacy. Finally, the tenderers were anywhere from any device convinced, with about 800 of them having internet. registering with the TDMS. • Procuring Entity can use information and document Impacts Generated repository from anywhere and anytime: Already, 110 evaluations have been completed using the TDMS, which • It has a multistep process for is considered a great achievement. information and documents’ Tenderers and Procuring Entity can verification to ensure that database store and update data and documents in the system is accurate in TDMS just as they manually • Tenderers / users of Procurement maintain their own file cabinet. They Entity concerned can update can view and download the necessary information and documents into the information and documents, a facility system at anytime from anywhere. that is of great advantage to them. The These changes will not be available Procuring Entity is able to use data and for further use (such as for documents of tenderers from TDMS evaluation purpose) until they are to meet its information needs about verified and approved by concerned tenderers relating to their capability, users of the PE organization resources, financial strength, and litigations, if any, among others. • Evaluator can know the number of pending litigations, value of 9 litigation claim, and percentage of has given consent to use TDMS for litigation claimed against net-worth evaluation of e-GP tenders on a pilot basis with the following conditions: a. • Evaluator can acquire the completed The system will be under the domain of work list with multiple search options, RHD b. RHD will maintain the security calculate general experience, and and confidentiality of the system and identify specific experience based on make it available to tenderers all the evaluation criteria time, so that they do not face any • Evaluator can view and analyze problems when participating in the on-going works and current tender c. If there is any conflicting commitments with multiple search information in TDMS and e-GP, the options information provided in the e-GP system shall prevail. • Evaluator can calculate the value of works in hand within a certain number Accordingly, Chief Engineer, Roads and years (for example, next 3 years) from Highways Department, has ordered that: IFT publication date 1. The tender shall be evaluated in the • Evaluator can view summary and e-GP system with the help of online details of turnover of various financial database system – TDMS. years and also calculate average 2. Qualification information Annual Turnover (for example, last 5 and evidences {such as work years) from IFT publication date experience certificates, on-going • Evaluator can estimate the average works list, payment certificates for Annual Turnover considering certain construction turnover, equipment best years (for example, best 6 years). list (own or rented), personnel list, This makes TDMS new and innovative. etc.} of the tenderers, as mapped in the e-GP tenders, must be available in the TDMS, so that the Tender Replicability Evaluation Committee (TEC) can evaluate tenders digitally within a DG, Central Procuring Technical Unit short period of time. (CPTU), Government of Bangladesh, Innovations in Procurement Process and Selection that Lead to Improved Outcomes – Tenderers’ 10 Database Management System South Asia Procurement Innovation Awards 2017 3. If there is any conflicting information in TDMS and e-GP, the information provided in the e-GP system shall prevail. 4. A tenderer not having sufficient information in the TDMS system may be evaluated as ineligible. 5. Evaluation Sheet generated by TDMS shall be uploaded into the e-GP system by the TEC. Scalability and Sustainability TDMS reduces conflict of understanding and makes turnover calculation easy. However, it requires individual data centre and internet connectivity in remote area or grass-root levels for accessibility to all. Having 24 Hours Help Desk facility is also very important. TDMS can be scaled for every department after customizing it according the department’s needs and can even be used by another country. Lessons Learned TDMS is a unique database for evaluation of tenders. Presently, it is restricted only to the Procuring Entity (PE) for evaluating tenders. After evaluating the TDMS, if the Central Procuring Technical Unit (CPTU) so desires, it can be customized for other departments and even other countries after modifications as per needs. TDMS helps save time, makes evaluation of turnover calculation easy, and reduces conflict because of uniformity in understanding. TDMS enables selection of the best tenderer and its use is already improving outcomes. 11 Innovations in Procurement Process and Selection that Lead to Improved Outcomes – Tenderers’ 12 Database Management System South Asia Procurement Innovation Awards 2017 Citation This submission from Dhaka Power Distribution Company (DPDC) on e-Auction is selected as the Runner-Up in Bangladesh for SAPIA 2017. The case story is about introducing e-auction when selling end-of-life items. 7 such e-auctions have been completed since its introduction in 2016, which, according to DPDC, is the first time in Bangladesh and has resulted in 11% savings for the company. e-Auctions are used extensively in many procurement regimes for disposal of stocks and items. In Bangladesh context, DPDC being a front runner is a notable feat and hence has been accorded the Runner-Up Award. 13 Achieving Better Value for Money Using e-Auction for Procurement of Goods by Public Sector – A Success Case from DPDC {This article is an abridged version of the submission on “Achieving Better Value for Money for Goods Procured in Public Sector Using e-Auction – A Success Case from DPDC” made by Mr. Salek Mahmud, Executive Engineer, Contract Procurement Circle, Dhaka Power Distribution Company, Dhaka, Bangladesh, for the South Asia Procurement Innovation Awards.} Summary One of the ways to get better value for proved to be a very successful innovation by money for goods procured using public achieving the desired results. The system is money is to ensure a better selling price highly scalable and adoptable by all public for these goods when they come to the sector organizations of Bangladesh. It is end of their usable lifespan. Traditionally, also sustainable in terms of profitability, is Dhaka Power Distribution Company pro-people and environment friendly. Still very (DPDC), a government-owned company new in Bangladesh, there is, however, room for of Bangladesh, like the country’s other improvement in this e-auction system. public sector organizations, had been disposing ‘end-of-life’ goods through manual auction system (forward auction), Background which hinders better returns. DPDC, for the first time in the history of public sector One of the major goals of public procurement auctions in Bangladesh, introduced an is to ensure ’value for money’, which electronic ‘e-auction’ platform that has means buying goods that are effective and Achieving Better Value for Money Using e-Auction for Procurement of 14 Goods by Public Sector – A Success Case from DPDC South Asia Procurement Innovation Awards 2017 ‘End-of-life’ goods are being sold in less time compared to previously. Competition has increased – resulting in better prices for goods sold through e-auction. Reliable and clear audit trail, accountability, transparency, and fairness within the auction process. Store management has become easier and space is now free due to timely disposal of used goods. ‘economic’. Getting lowest price for introduced an electronic goods procured is important but not ‘e-auction’ platform for selling enough. To achieve economic cost, used goods; moving the lowest ‘life cycle cost’ is to be attained. whole auctioning process One of the ways to ensure this is from the manual mode to getting a better selling price for goods electronic mode. This way, till sold at the end of their usable lifespan. date, DPDC has completed If the return from such salvage is 7 e-auctions. Against the high and disposal cost is low, then expected value of BDT 7.2 the net cost decreases, resulting in million, a total of BDT 8 higher ‘value for money’. Traditionally, million was received, an in DPDC, like in other public sector amount that is 10.77% higher. organizations of the country, disposal It is also worth mentioning of ‘end-of-life’ goods had been made that even the level of by selling them through manual competition has increased. auction system. The manual system has multiple problems, including lack of sufficient competition or no Impacts Generated competition at all, resulting in lower than the expected price offer. It is Introduction of the new e-auction often reported that some unscrupulous system has made a positive impact in bidders manipulate the offer price many ways. Now, ‘end-of-life’ goods by making unholy alliances among are being sold in less time compared themselves or applying coercive power to previously, when there was manual to prevent other interested parties from auction. Competition has increased biding. In this backdrop, DPDC decided – resulting in better prices for goods to do things differently. sold through e-auction. There is reliable and clear audit trail, accountability, transparency, and fairness within the Challenges Addressed auction process. Store management has become easier and space is now For the first time in the history of public free due to timely disposal of used sector auctions in Bangladesh, DPDC goods. 15 Level of Innovation organizations of other countries, as well as private sector organizations, for In the newly introduced system, selling their used goods. interactions between sellers, buyers, and banks are electronic. Banks connected with the DPDC auction system have Scalability and Sustainability played a very important role in the system becoming a success. Bidders can transact Any system becomes sustainable if with DPDC through the designated banks. it successfully meets 3 Basic Ps – Received bids are evaluated and a work People, Planet and Profit. The newly order issued to the highest qualified introduced e-auction system in DPDC bidder through the e-auction site. Then, has successfully met these three the winning bidder pays the remaining criteria, apart from being economically amount, except the security money beneficial. The system is consistently deposited earlier, using a payment slip generating more than average returns generated by the system at the designated from selling of used goods, thereby bank. A delivery order is issued by the ensuring capital for future investment. system to the winner for delivery of goods This system has also had a positive from stores. impact on macro-economic levels, as goods sold though e-auctions are reused or recycled, thereby boosting the recycle Replicability industry and improving the environment. It is also generating more business in The emerging picture clearly shows the SME sector, leading to employment that the new system is very suitable and contributing to GDP growth. and highly replicable in all public sector organizations of Bangladesh, as almost DPDC represents only a very small the same context like DPDC prevails in portion of the total public sector them. DPDC is hopeful that this e-auction auction requirement. If all public sector system will be adopted by all other public organizations of Bangladesh start sector undertakings of the country with working using this type of e-auction some customization. This auction system system, then overall positive impact on may even be adopted by public sector national economy will be significant. As recycling or reuse of goods uses Achieving Better Value for Money Using e-Auction for Procurement of 16 Goods by Public Sector – A Success Case from DPDC South Asia Procurement Innovation Awards 2017 less energy, it also helps the planet by putting lesser burden on its energy resources. The system is also pro-people, as automation reduces their workload. Further, record keeping is organized and easy. Lessons Learned The following are the lessons learned: 1. Although a ‘user manual’ provided in the system explains the bidding procedure step by step, it has been reported that a few bidders have failed in bidding for some auctions even after depositing their security money with the bank. When probed, it was found that they attempted to bid at the eleventh hour, and they were not acquainted with the platform. From this experience, DPDC has decided to appoint a ‘Help Desk’ or person with dedicated phone line when any auction is in ‘live’ status. Help desk/ designated person will support any bidder who is facing difficulties to bid through the system. 2. The system has been designed with a goal that the potential bidder need not physically come to the DPDC office, except for taking delivery of auctioned goods. It has been found that some bidders prefer to physically inspect the materials under auction, so that they can offer a realistic price. To address this, DPDC is actively considering uploading of video clips of materials under auction in the system. 3. Banks connected with the DPDC auction system play a very important role in the system being successful. Only one bank – EBL – is playing that role so far. This limits the level of competition as many bidders may not find it comfortable to transact through any other bank than their current bank. So, more banks will be given access, thereby ensuring better competition. 4. In this e-auction system, a bidder cannot see the offered price of other bidders when the system is in live status. It is possible to redesign the system in such way that any participating bidder can see the current highest price on offer without knowing the highest bidder. This will increase competition, resulting in a more competitive price. 5. The system has been designed by DPDC using its own IT experts. This system is less secure and may be attacked / hacked any time. To overcome this risk, a high level security system is to be designed in future. 17 Achieving Better Value for Money Using e-Auction for Procurement of 18 Goods by Public Sector – A Success Case from DPDC South Asia Procurement Innovation Awards 2017 Citation This submission is selected as the Winner for Bhutan, given the innovative approach the country has adopted by introducing rated criteria for evaluation and selection in their civil works. The point-based system for evaluation of bids related to civil works has evolved and become a good model for Bhutan in terms of selecting the right contractor while considering promotion of local contractors, skills, materials, etc. The e-tool Contractors’ Registration System facilitates direct entry to Higher Class as a contractor qualifies based on historical data of the contracts completed. This has increased the number of Large Class contractors from 66 in June 2011 to 219 as of December 2017, leading to increase in competition and value for money. 11,682 government tenders have been floated on the e-tool, with 2,000 works being awarded annually. With the use of e-tool, qualification review time has now been reduced from average of 45 minutes to maximum of 15 minutes for every bid evaluated. It is innovative and replicable in countries like Bhutan. 19 Web-Based Online Evaluation Tool (e-Tool) for Procurement of Works by Royal Government of Bhutan {This article is an abridged version of the submission on “Web-Based Online Evaluation Tool (e-Tool) for Procurement of Works by Royal Governbment of Bhutann (Use of ICT, Reform, and Modernization Effort at Systemic and Institutional Level)” made by Mr. Chencho Tshering, Senior ICT Associate with the Construction Development Board, Thimphu, Bhutan, for the South Asia Procurement Innovation Awards.} Summary Construction Industry is Bhutan’s growth turnover, their human resources, equipments engine, contributing 15% to the nation’s owned, and record of their past works. GDP. The Royal Government of Bhutan Introduction of this web-based online annually spends almost 60% of its evaluation tool has to a great extent budget on infrastructure development achieved uniformity in application of the and procurement of works. As part of point-based system and standardization in “Accelerating Bhutan’s Socio-Economic bidding for works, which is in line with the Development” in different sectors, the overall objectives of the Royal Government Royal Government introduced a point- Procurement Rules. World Bank has also based system and evaluation software reviewed this system and recommended to finalize contractors for works above that the system is good enough for projects Nu. 4 million. Accordingly, database has worth 1 Million USD (Nu. 65 Million). Most been developed by Bhutan’s Construction of the large works in Bhutan fall in the range Development Board (CDB) to evaluate Nu. 15 million to 70 million. the contractors’ profile based on their Web-Based Online Evaluation Tool (e-Tool) for Procurement of Works by 20 Royal Government of Bhutan South Asia Procurement Innovation Awards 2017 The reform has increased Large Class Contractors from 66 in June 2011 to 219 incorporated companies as of 15th December 2017. 11,682 government tenders were floated on the e-tool and 2,000 works were awarded in the year to the tune Nu. 54 million. The e-tool has reduced evaluation time from an average of 45 minutes to maximum of 15 minutes for every bid evaluated, thereby saving 8,000 working hours indirectly. Today, more than 250 procuring agencies, including state-owned corporations and NGOs are using the system. Background the government procurement rules. The CDB Database Owing to the massive costs involved, is integrated with other the Royal Government felt the need for stakeholders, like Royal Civil reforms in its Procurement System. Service Commission, Road It entrusted this task to the Ministry Safety and Transport Authority, of Works and Human Settlement and Department of Civil (MoWHS), Ministry of Finance (MoF), Registration and Census. This and Construction Development Board helps validate and authenticate (CDB). The reforms focused on: 1. the CVs of key personnel and Evaluation/selection method of bidders ownership of equipments during bid evaluation, 2. Incentives for owned and proposed by bidders, 3. Contractor registration and the bidders/contractors classification system, 4. Performance during the bidding process. ratings of contractors, and 4. It helps check duplication of Development of evaluation software same resources in different to expedite the evaluation process by projects. This ensures that the work government procurement agencies. is awarded to contractors who have The reforms led to development of more bid capacity and resources. It the point-based online evaluation also limits the number of works for tool (e-tool), which is directly linked each contractor as per the work ceiling to the contractors’ profile/database approved by CDB. maintained by CDB. The points/score for evaluation parameters, like the similar work Challenges Addressed experiences, bid capacity, and past performance ratings, are automatically The point-based system for selecting generated by the e-tool from the contractors for construction projects contractors’ profile/database, thereby costing more than Nu. 4 Million is saving time for evaluation team used by all government procuring and avoiding fabricated experience agencies, including corporations and certificates. For contractors, the e-tool NGOs, who are outside the preview of and CDB website provides single 21 window services for all work-related management and policy intervention. tenders. For government, it has brought in Today, more than 250 procuring more bidders, increased competition, and agencies, including state-owned has checked collusion among bidders. corporations and NGOs are using the system. Impacts Generated Level of Innovation The reform in the Contractors’ Registration System, like direct entry to Higher Class, The introduction of e-tool and point- has increased the number of Large Class based scoring system has decreased Contractors from 66 in June 2011 to the subjectivity involved in evaluation. 219 incorporated companies as of 15th Confidence among bidders and December 2017, resulting in increased contractors has thus increased, as there competition and value for money. 11,682 is less human element in evaluation. government tenders were floated on the Bidders need not submit their past e-tool and 2,000 works awarded in the performance, annual turnover, and year to the tune Nu. 54 million. The e-tool similar work experience certificates; or has reduced evaluation time from an worry about fabricated certificates, as average of 45 minutes to maximum of 15 all information is automatically pulled minutes for every bid evaluated, thereby from the contractors’ database. The saving 8,000 working hours indirectly. web-based centralized database and Further, the procedure of recording and evaluation system provides for easy updating the Past Performance Rating of verification by all procuring agencies and contractors on e-tool has had a positive fulfills the CDB’s mandate. impact, as it has become the basis for research in improving the construction industry and procurement process at Scalability and Sustainability large. The rating information provides the lists of performing and non-performing Any government agency can adopt the contractors, and sector-wise cost and point-based system in whole or with time overrun of projects. This helps little modification in the parameters. policy makers and project managers in In case there are any changes in SBD Web-Based Online Evaluation Tool (e-Tool) for Procurement of Works by 22 Royal Government of Bhutan South Asia Procurement Innovation Awards 2017 and Procurement rules, the e-tool has provision to modify or adjust the scoring pattern for different parameters of evaluation, like bid capacity, performance ratings, credit lines, work experience, HR, and equipment scores. The system can also produce data, like the numbers of works awarded each year by every ministry, department, district, or municipality. Further, it can project the actual number of ongoing projects in one location. This gives a clear picture as to which district is getting more development activities. Lessons Learned In the initial phase, e-tool users faced difficulties, as they had to evaluate bid documents submitted by bidders physically. At times, it was very difficult to determine the authenticity of documents. But now, data on human resources and equipments of winning bidders are locked in the e-tool on award of the work. This avoids duplication and misuse of same resources in different projects. There is a high chance of e-tool users of procuring agencies colluding with bidders and manipulating data. To fix accountability and track the activity of e-tool users, an audit trail feature has also been developed to prevent misuse/manipulation of information. The audit trail has become a deterrent for e-tool users, who may indulge in corrupt practices. The need for data integration and reliable internet connectivity is, however, a necessity. This has been resolved to a great extent by making e-tool web services available through the stable government intranet (T-WAN), since most of the users are government agencies requiring data integration with relevant stake holders. 23 Web-Based Online Evaluation Tool (e-Tool) for Procurement of Works by 24 Royal Government of Bhutan South Asia Procurement Innovation Awards 2017 Citation The GNH Model of Procurement of works that ensures Social, Economic, and Environmental Sustainability in Bhutan wins the Runner-Up Award for linking Gross National Happiness (GNH) to community contracting, and putting local communities in charge of their projects. The impact assessment shows that in case of 95% of 205 gewogs, administration officials found that community contracting creates a greater impact on developing the living standard of the rural people in Bhutan. Along with the enhanced ownership of assets created in 205 gewogs, works have been completed at lower costs and in lesser time; leading to overall improvement in employment and income levels of rural labor and contributing to the GNH principles. 25 GNH Model for Procurement of Works that Ensures Social, Economic, and Environmental Sustainability – Case Study on Successful Community Contracting in Bhutan {This article is an abridged version of the submission on “GNH Model for Procurement of Works that Ensure Social, Economic, and Environmental Sustainability – Case Study Based on a Successful Story about Community Contracting in Bhutan” made by Mr. Pema Wangchuk, Associate Lecturer with Jigme Namgyel Engineering College, Dewathang, SJ, Bhutan, for the South Asia Procurement Innovation Awards.} Summary GNH (Gross National Happiness) contracting at the level of gewog (block Model of Community Contracting in or a group of villages) and chiwog Bhutan has successfully safeguarded (administrative levels below gewog). The social, economic, and environmental case study proves that GNH principles can sustainability in Bhutan. This case coexist with development and progress, and study points to the relationship between community contracting has a greater impact happiness and development in Bhutan on improving living standards of the rural through procurement in accordance with people in Bhutan. The study concludes with Gross National Happiness principles, justifications for adopting the GNH guidelines and rules. Around 90% of Model of Procurement in Bhutan as a the kingdom’s developmental activities Development Tool. are associated with infrastructure development through community GNH Model for Procurement of Works that Ensures Social, Economic, and Environmental 26 Sustainability – Case Study on Successful Community Contracting in Bhutan South Asia Procurement Innovation Awards 2017 Costs of community contracting are significantly lower. A high proportion of community contract costs are used to pay local labor and for local materials. The community benefits directly from additional income, thereby contributing to Gross National Happiness. Local communities have an incentive in implementing works of a high quality because they are the beneficiaries. Background protocol is that community contracting encourages local All five-year plans for development of communities of the country’s infrastructure in Bhutan have been mostly hilly and forest regions implemented mostly at local levels to assume ownership of owing to the Royal Government’s their development project priorities. Though there have been outputs. More so, community significant increases in investments contracting suits remote on infrastructure development of areas, where commercial the country, finding contractors to contractors are unwilling to carry out works, especially in remote work. Such contracting allows areas, has been difficult, leading to local communities flexibility increase in cost as well as delays in in deciding for themselves the implementation of planned activities. appropriate mix of paid and Therefore, the Bhutan Administration unpaid (voluntary) labor. has decided on an alternative procurement of works at local level, with “Community Contracting Protocol” Impacts Generated addressing all hassles encountered so far. The advantages enshrined in the Community Contracting Protocol are: • Costs of community contracting are Challenges Addressed often significantly lower than those One of the most important challenges of commercial contracts; is to ensure that local development • A high proportion of community progresses in accordance with contract costs are used to pay local Gross National Happiness policies labor and for local materials. So, and guidelines. Accordingly, a the community benefits directly Community Contracting Protocol has from additional income, thereby been circulated by the Ministry of contributing to Gross National Home and Cultural Affairs (MOHCA), Happiness; Bhutan. The main advantage of this 27 • Community contracting is an effective As a result, unlike other nations, means of mobilizing community labor Bhutan focuses every socio-economic and ensuring that works are completed development on value creation, starting on time; from the grass root level and depending on needs of the local people. While doing • Local communities have an incentive so, the maximum participation of people in implementing works of a high quality is always ensured and maintained. because they are the beneficiaries of Around 90% of developmental activities these works. are associated with infrastructure development at gewog and chiwog levels, which include maintenance of Level of Innovation farm roads, irrigation channels, drinking The GNH Community Contracting Model water supply, construction of farm enshrined in Bhutan’s sacred Constitution houses, maintenance of schools, RNR stipulates that “The State shall strive to centers, BHUs, and ORC buildings, promote those conditions that enable the and other essential infrastructure pursuit of Gross National Happiness.” The development. The annual budget for Dzongkhag Tshogdu (District Councils) most of these activities is from the and Gewog Tshogde (Block Councils) Gewog Development Grant (GDG). have the autonomy in formulating Five Year Plans and Annual Plans for their Dzongkhag and Gewog. Moreover, Replicability these councils monitor and evaluate A few gewogs in Bhutan, which development policies, plans, and projects, have successfully implemented the as per procedures formulated by the Gross community contracting approach over National Happiness Commission. Similarly, the last couple of years, are Kana in all local governments of the country’s 20 Dagana District, Kabjisa in Punakha districts and 205 gewogs execute their District and Bidung in Trashigang annual plans in line with GNH guidelines to District. Kana Gewog is one of the promote national goals, that is: “To fulfill remote gewogs in Dagana. It majorly the wellbeing of citizens together with benefited with construction of a new development.” farm road, while Kabjisa and Bidung GNH Model for Procurement of Works that Ensures Social, Economic, and Environmental 28 Sustainability – Case Study on Successful Community Contracting in Bhutan South Asia Procurement Innovation Awards 2017 gained from maintenance works and constructions of useful farm houses for farmers. All these were executed in 2016-17 by their own people after forming an association or a small group. According to Choiku Gyeltshen, the Gewog Administrator Officer, Kana Gewog, budget for construction of new farm roads were allocated from GDG and works were carried out by the local people themselves through community contracting. Scalability and Sustainability Socio-economic development and sustainability is one of the main pillars of Bhutan’s Gross National Happiness. This principle makes all development processes in Bhutan sustainable and vibrant. All stakeholders, who involve in community contracting as committee members, must uphold directions of the GNHC (Gross National Happiness Commission) as well as the following objectives of GNHC: • To guide long-term sustainable socio-economic development and strategies; • To ensure that GNH principles are mainstreamed into plans and policies in line with regional and international commitments; • To mobilize adequate resources on a timely basis and ensure equitable and efficient allocation; and • To monitor, facilitate, and coordinate implementation of policies, plans, and programs, thereby ensuring effective delivery. The gewog budget is sustainable because every year the Government of Bhutan allocates Nu. 2 million fund in the form of GDG to all 205 gewogs in Bhutan. When it comes to preservation of environment, the Bhutanese Constitution mandates for around 60% of forest cover at all times to come in Bhutan. Therefore, local authorities remain aware that preservation of the forest is to be always prioritized, despite developmental activities at their village level. 29 Lessons Learned The case study has shown that community contracting in Bhutan does bring a rapid revolution in the field of procurement of works, thereby ensuring socio- economic development, sustainability, and preservation of environment. GNH model in procurement of works at local levels is viable and lucrative in various parts of gewogs and chiwogs, with massive benefits, such as: • Encouragement of local community to assume ownership of project outputs; • Costs of community contracting often being significantly lower than for commercial contracts; and • A high proportion of community contract costs are used to pay local labor and for local materials, so the community benefits directly from additional income. GNH Model for Procurement of Works that Ensures Social, Economic, and Environmental 30 Sustainability – Case Study on Successful Community Contracting in Bhutan South Asia Procurement Innovation Awards 2017 Citation This submission from Energy Efficiency Services Limited (EESL), selected as the Winner for India, is about how a business model developed around procurement-led market interventions has brought transformation in terms of bringing in standards for performance, quality standards, and production of LED bulbs, energy-efficient pump sets, energy-efficient fans, etc. thus promoting the environmental objectives of the Government of India. EESL achieved this through aggregating demand and supply for citizens for their personal use, energy efficient products as part of as the intervention changed the national programs in these areas. the dynamics of production Moving from a compliance-focused and pricing technologies in the procurement approach, EESL’s country. EESL, with its mandate to innovative market-led procurement promote the use of energy-efficient approach ensures values for all technologies in the country, is stakeholders, including consumers, bringing in such changes in other bidders/industry, as well as the products, like Energy-Efficient country at large in energy efficiency. Pump Sets, Energy-Efficient Fans, The intervention is mainly based Electric Vehicles, etc. Recognizing on policy decisions for promoting these efforts towards a low energy-efficient lighting in public emission-economy focusing places. This has led to a massive on energy-efficiency programs, swelling of demand for bulbs in the the Global Environment Facility country, which allowed bringing in (GEF) has now partnered with of newer and mass-scale economic EESL for the project – Creating technologies for production. EESL and Sustaining Markets for used their regulatory position for Energy Efficiency. This is a great demand consolidation and the example of public procurement illustrated unit price of INR 350 delivering value for sustainability ($6), discovered through bidding and development objectives of a for 700,000 LED bulbs in 2014, country. Power of procurement in corrected to INR 38 (60 cents) by consolidating and driving product consolidating and offering a quantity development, and mass-scale of multiple tranches of 50 million production benefitting public as LED bulbs by 2017. This benefit has well as private individuals, is a percolated down even to private great innovation. 31 Unlocking Energy Efficiency Market in India – Through Innovative Procurement Business Model {This article is an abridged version of the submission on “Unlocking Energy Efficiency Market in India – Through Innovative Procurement Business Model” made by Mr. Rajneesh Rana, General Manager, Energy Efficiency Services Limited, Noida, Uttar Pradesh, India, for the South Asia Procurement Innovation Awards.} Summary Energy Efficiency Services Limited (EESL), on procurement, is setting the roadmap for through its innovative, transparent, making energy efficiency more accessible and fast procurement-based business and affordable in India,without imposing model of consolidating demand for any subsidy burden on the government. products, is promoting the environmental By implementing UJALA (Unnat Jyoti by sustainability goals of the Government. Affordable LEDs and Appliances for All) and The business model is also helping various other energy-efficiency programs, in market transformation in terms of EESL has tremendously reduced the burden pricing and production of energy-efficient of energy bills on the country’s people and products in India. With its mandate organizations. of conceptualizing and implementing By aggregating demand through the country-wide programs that promote program, EESL could present the volumes use of energy-efficient products to meet required as ten times or more in a single the country’s sustainable development lot of procurement for LED (Light Emitting goals, EESL’s business model, focusing Unlocking Energy Efficiency Market in India – Through Innovative 32 Procurement Business Model South Asia Procurement Innovation Awards 2017 Common household consumers using LED bulbs save about Rs. 272, which is almost 90% reduction in their electricity bills. Reduced their energy bills by 50%, while also decreased the peak demand and carbon-di-oxide emissions. 2,000 agricultural pump sets have been replaced by energy- efficient ones. Investment in infrastructure improvement, distribution network, and logistics improvement, among others, also provides indirect job opportunities. Diode) bulbs that led to reduction in a time frame of 7–10 years. prices of energy-efficient appliances, Due to effective planning, like LED bulbs, by 70–80%. In 2014, demand forecasting, and 5Rs market price of 7W LED bulb was of Procurement (Right source, Rs. 550. In 2017, its discovered price Right time, Right quality, Right in UJALA tenders fell from Rs. 310 quantity, and Right time), EESL in 2014 to Rs 38 in 2017, while its is able to leverage demand Lumen/Watt quality at the same time aggregation and economies increased from 70 Lumens to 110 of scale. EESL has reached Lumens. More importantly, use of LED the masses by distributing bulbs has reduced the power bill of 280 Million LED bulbs since average households by almost 90%. the inception of UJALA in Likewise, Solar PV (Photovoltaic)- 2014. Similar has been the based agricultural pump sets have performance of SLNP (Street enabled farmers save 30% on their Light National Program – LED farming operations, thereby increasing street lights), Energy-Efficient their income. The revolutionary (EE) agricultural pump sets, and EE change brought in by EESL has led to fan distribution programs, which replication of its ESCO (Energy Service have, in turn, accelerated the growth Company) model in other countries, of domestic industries. EESL has including Malaysia, Kingdom of Saudi thus created a new normal through Arabia, and the United Kingdom. large-scale transformation, helping consumers get more with the same energy consumption while boosting Background industrial growth. The success of ESCO Service business model is owing to its efficient Challenges Addressed procurement strategies. In this model, EESL invests the complete amount With every program, EESL had faced a in a project upfront, i.e. equity of 20% number of challenges in the form of: and debt 80%. The cost is recovered 1. Timely and speedy procurement, from the client through annuities in along with ensuring delivery on a scale 33 unseen before, 2. Ensuring the quality stakeholders, including consumers, of appliances and meeting industry industry, and the country at large. 1. standards, 3. Compliance with various Common household consumers using processes of public procurement. 4. LED bulbs save about Rs. 272, which is Creating awareness about the benefits of almost 90% reduction in their electricity energy-efficiency interventions through bills. Switching to energy-efficient fans innovative marketing campaigns, and and ACs under EESL programs reduces 5. Enhancing the capacity of Indian these bills further. These savings can industries in making large-scale deliveries be utilized by households in meeting without compromising on quality their daily expenses, educating children, of products. EESL addressed these health care and so on. 2. Likewise, challenges through numerous ways. To municipalities and panchayats (village- ensure transparent, timely, and speedy level bodies) have reduced their energy procurement, EESL switched from manual bills by 50%, while also decreasing tendering to e-tendering method in 2015. the peak demand and carbon-di-oxide With regard to quality of appliances, it emissions. 3. Till date, 2,000 agricultural asked participating bidders to provide pump sets have been replaced by test reports from National Accreditation energy-efficient ones in Karnataka and Board of Laboratories. EESL’s e-tendering 1 lakh pump sets are being replaced in portal has the certification of STQC AP, leading to farmers saving 30% on (Standardization Testing and Quality their energy bills. 4. EESL has played Certification), an apex body of the an instrumental role in developing Government of India for quality standards. the Indian industry related to LEDs, The portal’s audit, conducted by a agricultural pump sets, solar energy, multilateral bank, has found that EESL’s energy audit, electric vehicles, smart tendering process is in compliance with metering and so on. 5. Investment in international standards. infrastructure improvement, distribution network, and logistics improvement, among others, also provides indirect Impacts Generated job opportunities. EESL innovative market-led business approach ensures value for all Unlocking Energy Efficiency Market in India – Through Innovative 34 Procurement Business Model South Asia Procurement Innovation Awards 2017 Level of Innovation Globally, public sector has been traditionally used to subsidies for making transformative solutions affordable. But EESL’s approach uses the novel business model of no subsidy and Pay-As-You-Save (PAYS). PAYS model obviates the need for any upfront capital investment. Further, the organization’s approach to aggregate demand makes the market attractive enough for industry. For example, before EESL’s intervention in 2014, penetration of LEDs in domestic market was 0.1%. After successful implementation of the Demand Aggregation model, this increased to 20% in 2017. Production of LED bulbs has increased to about 4 crores/month from 10 lakh two years ago. EESL has evolved a Service Model to enable municipalities to replace conventional street lights with LEDs at no upfront cost. The cost is recovered by monetizing energy savings. Replicability The success of EESL’s energy service model has created a blueprint for commercial growth of companies in the Indian energy-efficiency space. The model is now being replicated to transform electric mobility, smart metering, energy-efficient agricultural pump sets, and solar roof-top programs in the country. The agricultural pump sets program faced many challenges since farmers are getting electricity free of cost in many states and thus see no advantage. EESL has mitigated this challenge by creating awareness and convincing farmers about the increase in flow of water by adopting scientific method of pump selection. The success of UJALA scheme has led to its replication in Malaysia’s Maleka. UJALA is being implemented in UK too. The Kingdom of Saudi Arabia has sought collaboration with EESL to replicate India’s successful domestic and street lighting programs. Scalability and Sustainability Through the India Energy Efficiency Scale-Up Program, the World Bank is supporting EESL in scaling up its priority initiatives with regard to energy savings in residential and public sector. What adds to the sustainability of EESL initiatives is running of its programs on a market-led approach, rather than the traditional approach of incentives and subsidies. With the Government of India envisaging transformation in many new areas to fulfill its commitment of reducing CO2 emissions and switching to cleaner fuel options, EESL is planning an Electric Vehicle program, along with charging infrastructure in India. The National Electric Mobility Mission Plan seeks to have 400,000 Electric Vehicles (EVs) on Indian streets by 2020. Recognizing India’s efforts towards a low-emission economy, the Global Environment Facility (GEF) has now partnered with EESL for Creating and Sustaining Markets for Energy Efficiency. The project will receive a composite funding of $ 454 million. EESL’s efforts have been appreciated and recognized at international platforms, with World Bank President, Dr. Jim Yong Kim, making a mention about it at the climate change event in Paris. Early next year, EESL will use a USD 220 million World Bank loan, combined with an 80 million dollar guarantee facility, and leverage $ 200 million of commercial finance, to deploy thousands of electric cars and charging stations and millions of smart electricity- consumption meters throughout India. 35 Lessons Learned Conceiving a project on paper is far easier than taking the same to execution on the ground level with economic viability. Some of the programs announced by EESL in initial years were not able to gather enough attention from the manufacturer and consumer side. By organizing industry awareness programs, elaborate pre-bid meetings, and accommodating as many suggestions received from the industry, EESL has created a positive environment for competition and ensured maximum participation. Majority of its tenders are being wrapped up in 45 days, with well thought of payment terms reinforcing active participation by prospective bidders. Unlocking Energy Efficiency Market in India – Through Innovative 36 Procurement Business Model South Asia Procurement Innovation Awards 2017 Citation Government e-Procurement System of National Informatics Centre – GePNIC, which bags the Winner Award from India, has been in place in India for the last 10 years and is offering seamless e-procurement service to 27 federal states and 350 other large public sector entities. The system has features like Authenticity – Mandatory use of Digital Signature Certificates, digital signing of all documents, two factor authentication, secured hosting, the system to run over 100,000 client-side encryption, multiple bids a year makes it a winner. bid openers; 24 x 7 availability This may be one of the very of portal and telephonic help few e-procurement systems desk, anytime and anywhere developed fully in house by bidding, periodic SMS and mail any government department, alerts; mobile apps, online which has a reach as wide tender opening, online payment as the length and breadth of and automatic refund in a user- India. Customized provisions, friendly system, system-aided like integration with mobile evaluation process, on-the-fly technology, state/country-wide reports / comparative statements, single registration of vendors etc. Over the years, NIC has for repeated participation in been deepening its reach and bidding, ability to integrate with widening the depth, as required other enterprise management by each organization. Variations systems, logistics and of the base system can now warehouse management boast an integrated solution with systems, FMIS, etc. make e-tendering, e-reverse auction, and GePNIC a continuously evolving e-auction, as delivered to some of and futuristic technology the public sector undertakings. solution for good governance. This adaptability and resilience of 37 GePNIC – A Futuristic Technology Solution for Good Governance in India {This article is an abridged version of the submission on “Government e-Procurement System of National Informatics Centre – GePNIC” made by Mr. Srinivasa Raghavan K, Scientist F, National Informatics Centre, Chennai, India, for the South Asia Procurement Innovation Awards.} Summary The Central Public Procurement Portal from Google Play or Apple stores. More of Government of India is a single- than 2.7 million e-tenders worth over Rs. point access for information on all 402 trillion have been processed since the procurements by various central inception of GePNIC. The system, designed government organizations and state taking into account the procurement rules government entities across the country. followed by India is customizable for the It facilitates electronic or e-tendering procedures followed by the World Bank, and using the Government e-Procurement Asian Development Bank, etc. It has features System of National Informatics Centre like mandatory use of Digital Signature (GePNIC). Over 350 Central Government Certificates, digital signing of all documents, organizations, apart from 27 state two factor authentication, secured hosting, governments and union territories are client-side encryption, multiple bid openers; using GePNIC, which is also available on 24 x 7 availability of portal and telephonic mobile phones with apps downloadable help desk, anytime and anywhere bidding, GePNIC – A Futuristic Technology Solution for 38 Good Governance in India South Asia Procurement Innovation Awards 2017 Centralized Information as all tenders of the country are assimilated in one portal. Organizations indicated huge savings in time and cost. Availability of step-by-step details of the tender life in public domain ensures complete transparency. A single product used by various organizations ensures uniformity in the tender process. periodic SMS and mail alerts; mobile which makes the process apps, online tender opening, online of evaluating a tender payment, and automatic refund in a unbiased and cuts short the user-friendly system; system-aided time required for awarding evaluation process, and on-the-fly contracts. Variations made reports / comparative statements.. within the base system Even with such a large user base and provide an integrated solution national outreach, NIC is providing with e-tendering, e-reverse individualized value additions as auction, and e-auction, as needed by various procurement entities delivered to some of the including integration of e-procurement public sector undertakings. with ERP systems; end to end solution This is a significant step in including online evaluation and managing large procurements contract management; electronic without any litigation. Tender- money transfer for bid security etc. cum-auction process using This adaptability and evolving nature GePNIC enables competitive of features with such a wide outreach bidding and has brought in lots of makes GePNIC a living innovation. revenue for the government in sand mining and other tenders. As a result, the process is being followed by Background various other organizations across the country, leading to an increase in their GePNIC has been developed by revenue share too. National Informatics Centre (NIC) of the Ministry of Electronics and Information Technology (MeitY), Challenges Addressed Government of India, to cater to the electronic procurement / tendering As per a World Bank report, the overall requirements of Government procurement within India is 13% departments and organizations. The of its National Budget. Earlier, the tendering process is fully automated, government carried out procurement 39 through conventional methodology, 2. Time and Cost Savings: Studies investing huge human and other resources conducted by various organizations and consuming a lot of time, with little or have indicated huge savings in time no transparency. Mandatory adoption of and cost. the electronic medium for tendering with 3. Transparency: Availability of step- state-of-the-art security has ensured ample by-step details of the tender life in transparency and accountability by various public domain ensures complete stakeholders. Major challenges addressed transparency. This has instilled by GePNIC through process reengineering faith and confidence amongst all and emulating best practices are stakeholders. adoption of standard bidding document, price bid templates, and directories on 4. Uniformity in Tendering Process: bidders, products, and locations. Front- As this is a single product used end computer systems with necessary by various organizations, there is network connectivity, accessories, power uniformity in the tender process backup facility, and back-end systems followed. Workflow-based system having necessary capacity meet all the ensures that no step of the tendering user requirements. Predictive analytics process can be circumvented. is planned to be included once base analysis is made available on the portal. 5. Authenticity: Mandatory use of Adaptability and resilience of the system digital signature certificates, digital to run over 100,000 bids a year has made signing of all documents, two-factor the system a winner. authentication, secured hosting, and client-side encryption have ensured the authenticity of each task performed. Impacts Generated 6. Bidder Convenience: The system GePNIC has generated considerable is available 24 x 7 with help desk. impact by way of: This enables anytime and anywhere 1. Centralized Information at One Point: All bidding with no physical threat; tenders of the country are assimilated allowing fair, free, and fearless into one portal. participation from vendors. GePNIC – A Futuristic Technology Solution for 40 Good Governance in India South Asia Procurement Innovation Awards 2017 7. Data Assimilation and Analytics: This provides real-time graphs, trends, and statistics. Many new entrepreneurs have thus got encouraged to participate in e-tendering under Government of India’s Make in India vision. Level of Innovation When work on GePNIC was taken up, there was no readymade system available, which could meet the varied requirements. Hence, NIC decided on development of the system addressing all requirements and overcoming every challenge. This led to many innovations like a) Mobile Apps, which enabled tendering and updates on the go. b) A Dash Board that provides descriptive analysis and key performance indicators on various parameters. This facilitates a detailed insight into various activities taking place within the system. c) Process innovation that facilitates quick bid opening, thereby ensuring quick and instant results. All documents uploaded are digitally signed and backed by the IT Act of Government of India. There are audit logs, time stamping, and role-based access with tamper-proof methodology. d) As suggested by the World Bank after a study across different states, product categories have been made uniform. There is a standard yard stick for similar works across various portals. Provisioning of configurable functionalities has made GePNIC more versatile. Customized provisions, like integration with mobile technology, state/country-wide single registration of vendors for repeated participation in bidding, ability to integrate with other enterprise management systems, logistics and warehouse management systems, and Financial Management Information System (FMIS), among others, make GePNIC a continuously evolving and futuristic technology solution for good governance. The mobile interface adds to the system’s openness and transparency. Replicability e-Procurement system of NIC has been developed as a generic product, which makes it replicable for all kinds of procurement needs of government offices in the country, whether Goods, Services or Works. As it is on an Open Architecture Framework, there is flexibility for scaling up and meeting the dynamic needs of the Government. Further, it has been designed taking into account the General Financial Rules (GFR) on tendering and, thus, adheres to various guidelines issued by the World Bank and Asian Development Bank. Some of the processes are deployed on Virtual Machines / Cloud to cater to the requirements of peak time load and other such critical resource- intense activities. With such capabilities, GePNIC can also be implemented initially in SAARC countries, followed by other nations. Scalability and Sustainability Various methods have been adopted for funding and sustainability of the system. 1. Certain State Governments have a process of registering bidders for a specified period, for which a nominal one-time fee is collected from bidders. This brings in continuous revenue without overburdening the bidder on the cost aspect. 41 2. For each bid, a small percentage on the bid value is collected for maintaining the system and meeting other requirements. However, this may overburden bidders. 3. The Earnest Money deposit (EMD) collected from bidders is deposited in banks. The interest earned during the deposit period is used for sustainability of the system. This does not have a direct impact on bidders’ costs. These measures have been running for more than 10 years in certain instances, confirming the sustainability of the system. Lessons Learned Major learnings from implementation of GePNIC across the country can be summarized as follows: • The system, driven from the top, has had a great impact on the speed at which it is being implemented. • Bidders are able to bid on any site without relearning, as the product is the same all over. • e-Procurement systems have a standardized approach to rolling out efficient processes. They serve not only the needs of procurement, but also all departments involved in processing and record keeping of various transactions. • There must be in place a Core Committee or some such empowered decision-making body to take quick decisions on issues that may arise. • Continuous process re-engineering is essential for value addition. • Constant capacity-building measures have to be put in place. • Key to successful and continued running of GePNIC is creating a strong support structure comprising help desks, system administrators, and IT support. • Technology improvements by way of better performance, and enhanced features, like Mobile Apps and Data Analytics, will be very useful for end users. • Item codification and standardization of bidder categories are also essential. • Multi-currency templates are required for global tenders. GePNIC – A Futuristic Technology Solution for 42 Good Governance in India South Asia Procurement Innovation Awards 2017 Citation A Public Private Partnership (PPP) contract for diagnostic services in rural and urban areas of Uttar Pradesh, engaging high- end private diagnostic labs with a performance-based contract system, wherein performance is evaluated on the basis of Turnaround Time (TAT) calculated starting from the time sample is taken from the patient up to successfully uploading the test result on the website of Patients Diagnostic Information System tests. By a careful packaging owned by UP Health System of cluster of districts for PPP Strengthening Project (UPHSSP), bidding, the rates offered is a successful innovation in have been an average of 20% health service delivery and gets below the Central Government the Runner-Up Award for India. Health Service’s rate. Over 90% UPHSSP has also hired an External patients reported higher levels Quality Assurance Agency (BIO- of satisfaction with regard to RAD) to do monthly audit and services provided. The results maintain quality standards of the from the intervention have equipment of service providers. triggered its replication across The number of patients increased the state and the model has from 11,314 (Dec 2015) to been adopted by National Health 1,369,864 (Dec 2017), and they Mission, Government of India. benefited from a range of 173 43 Public Private Partnership for Laboratory Services in Public Hospitals of Uttar Pradesh with Innovative Web-Enabled Verification Mechanisms {This article is an abridged version of the submission on “An Evidence from Uttar Pradesh on Public Private Partnership for Laboratory Services in Public Hospitals” made by Ms. V Hekali Zhimomi, Project Director, UP Health System Strengthening Project, Lucknow, Uttar Pradesh, India, for the South Asia Procurement Innovation Awards.} Summary Uttar Pradesh, the largest state/ would not visit a hospital but remain at province in India, had substantially low home, owing to such costs involved. Having hospitalization rates in its public hospitals identified the potential gaps in public health when compared to the national average. care facilities of the state, the UPHSSP , in The key reason for this was found to consultation with the Word Bank, introduced be lack of availability and accessibility an innovative and brand new concept of to laboratory services in the state’s establishing high-end private diagnostic 52 district hospitals. According to the labs within the premises of public hospitals National Sample Survey Organization, in UP under the Public Private Partnership diagnostic services accounted for 14% (PPP) mode. The innovation has had an and 15.4% of Out-of-Pocket expenditure enormous impact. A proof of this is increase at public facilities in rural and urban areas in the number of patients at these hospitals of UP. A study conducted by UP Health from 11,314 (December 2015) to 1,369,864 System Strengthening Project (UPHSSP) (December 2017). revealed that 21%, or a fifth of the patients, Public Private Partnership for Laboratory Services in Public Hospitals of 44 Uttar Pradesh with Innovative Web-Enabled Verification Mechanisms South Asia Procurement Innovation Awards 2017 Increase in patients availing quality diagnostic services in high-end laboratories within hospital premises from 11,314 in Dec. 2015 to 1,369,864 in Dec. 2017. 90% patients were satisfied with getting their lab reports on time. Rates quoted during competitive bidding were at an average 20% below the rates stipulated by the Central Government. Test results are available online. Background Challenges Addressed With a population of 199.8 million Some of the challenges that (2011 Census), Uttar Pradesh, if required UPHSSP’s attention considered a country, will be the fifth are 1. Poor Public Health most populous nation on the globe. System: Overall per-capita Given such enormous population spending on health is very density, UP will play a crucial role low (Rs. 372), indicating a in achieving India’s health-related capacity deficit within the Millennium Development Goals. The government-run secondary engagement of high-end private labs care hospitals to provide under the PPP model, the first-of-its- affordable and quality kind performance-based contract laboratory services. Therefore, system in UP, will go a long way in high-end laboratory services achieving the millennium goals. have been introduced at Care has been taken to evaluate the district government hospitals performance of these diagnostic to provide quality services at no cost labs on the basis of Quality and to the patients, resulting in much Turnaround Time (TAT). The TAT is better diagnosis and treatment of calculated starting from the time patients. 2. Out-of-Pocket Expenditure: sample is taken from a patient to 8% of households in the state fall successful uploading of the test result below the poverty line compared to on the website of Patients’ Diagnostic the national average of 6.2%. Lack of Information System (PDIS). An external quality pathological lab services in quality assurance agency conducts government hospitals forced patients monthly audits to ensure accurate test to avail these services from private results, indicating better diagnosis service providers at very high rates. and treatment planning. Engaging 6 Now, with establishment of high- well-established private diagnostic end laboratory centers within the labs in such a manner has ensured hospital premises, patients get quality that underprivileged communities in diagnostic services at no additional Uttar Pradesh have access to high-end cost, which has significantly reduced pathology lab services. their out-of-pocket expenditure burden. 45 3. Effective Monitoring: A simple and bidding were at an average 20% efficient monitoring system has been below the rates stipulated by the developed, where each hospital and Central Government Health Scheme doctors are assigned a unique code. (CGHS). The present running cost These codes help in tracking each lab test of a high-end test is Rs. 463 per referrals from across the state on real-time patient, which the government basis. reimburses to the private player. 3. Test results are also available online. Access through a login ID Impacts Generated ensures privacy. The result comes The UPHSSP project has achieved many on specially designed software quantitative milestones and has had an PDIS, which is available on the impact that is cost effective for patients as UPHSSP website. well as government. Some of the major impacts are: Level of Innovation 1. There has been a significant increase Implementation of performance- in the number of patients availing based contract for delivering high-end quality diagnostic services in high- laboratory services in public health end laboratories within the hospital facilities is a first-of-its-kind innovation premises from 11,314 in December in Uttar Pradesh. The most innovative 2015 to 1,369,864 in December 2017. parts of the intervention are: cost- An internal survey in 9 districts effective high-end laboratory facilities, revealed that 90% patients were improved and efficient delivery of health satisfied with getting their lab reports services, performance-linked payment, on time. process for patient feedback, online facility for patients to view and generate 2. The intervention is cost effective. The their reports, and introduction of private 52 district hospitals were segregated sector in the most complex areas of into 11 clusters in such a way that health sector. The intervention has rates quoted during competitive facilitated development of a knowledge Public Private Partnership for Laboratory Services in Public Hospitals of 46 Uttar Pradesh with Innovative Web-Enabled Verification Mechanisms South Asia Procurement Innovation Awards 2017 repository that helps understand the disease and health profile of selected districts, which enables tracking of any emerging epidemics. The UPHSS initiative is also equitable and adequately attempts to address the needs of different sections of the society, such as women and poor religious minorities. Replicability The system has demonstrated that it is the most viable model, which can be replicated across the state and country. The model has already been adopted by National Health Mission of Uttar Pradesh and scaled up to 95 district hospitals and 822 Community Health Centers (CHC) in the state. As the costs/rates of high-end diagnostic test services are CGHS-based, they are the lowest rate in the country. Thus, the government does not pay a huge amount for these services, which makes easy a policy decision for replication by other governments. The online PDIS software designed for monitoring has been developed on a simple, secured, and open source platform, which is compatible for migration and replication. Scalability and Sustainability This innovative public-private partnership model is a win-win situation for all three stakeholders and, hence, scalable and sustainable. Patients are getting quality services, which is their right, free of cost. Pathology labs are getting reimbursement of their service delivery costs from government. And, government provides its people access to high-end pathology lab centers without spending any amount on infrastructure and human resources, but only paying for services at much lower CGHS rates. Labs are able to manage their expenses through higher footfall of patients. Therefore, this performance-based contracting system model has all the potential to become a self-sufficient and sustainable model in other parts of the country and abroad. 47 Lessons Learned The lessons learned are: 1. Stakeholder consultation is essential for assessing the market – Initially, there was strong resistance within the public sector when it came to involving private players. However, continued consultation with private sector helped it understand market opportunities and the influencing factors in rate negotiations. 2. Cluster approach makes the package more attractive – Given the extensive spread of health facilities in the state, hospitals were divided into 11 clusters covering all 52 hospitals. The concept of clustering ensured cross subsidization and private sector could make profits through increased footfalls. 3. Inclusion of quality parameters for performance-based payment – Many contracts that involve payment on inputs have the risk of compromising on quality. In light of this, the project set up an External Quality Assurance Service (EQAS), which is linked to performance for payment. EQAS evaluates the standardized quality control checks for tests conducted in laboratories to ascertain their actual quality. Only on a satisfactory report, 10% payment linked to the quality parameter is released to the service provider. Similarly, another 10% is released on compliance with timely delivery of test reports to patients. 4. Retaining available services but adding services of high-end pathology not available at the hospital was the key, providing patients an additional benefit at the hospital. Public Private Partnership for Laboratory Services in Public Hospitals of 48 Uttar Pradesh with Innovative Web-Enabled Verification Mechanisms South Asia Procurement Innovation Awards 2017 Citation e-Council, an integrated procurement and financial management solution developed for managing the challenges of a small country Maldives with decentralized government authorities, 179 Island Councils, 18 Atoll Councils, and 3 City Councils, gets the Winner Award for SAPIA 2017. This is a ‘fit for purpose’ solution in the context and is innovative, as the portal digitized manual procurement, administrative and financial framework of local councils, and gathered and fed data into a central depository and all other developmental aspects of the local council functioning. e-Council, as a platform for all decentralized administrative units to manage their financial and procurement matters and link up to central government structures, adds value to governance in the country. 49 e-Council System with Integrated Procurement and Financial Management Driving Development in Maldives {This article is an abridged version of the submission on “e-Council” made by Mr. Adam Shareef Ahmed, Director General, Local Government Authority, Male, Maldives, for the South Asia Procurement Innovation Awards.} Summary Maldives is an island nation with authority is working together with line a population of 400,000, which is ministries, independent institutions, and geographically scattered over roughly other government partners for developing 1,190 islands across the Indian Ocean. standards, policies, and procedures to The administration of these islands is strengthen decentralization system in by Local Councils, which are separate the Maldives. The aim is to promote good legal entities elected by residents of governance and transparency at local levels. the respective islands, atolls, and cities. One of the initiatives has been to develop With the Decentralization Act devolving a web-based system called e-Council to many municipal functions to these Local deliver efficient services to the public. The Councils and their functionaries, there system also strengthens and standardizes is a need to strengthen their capacity of the financial and administrative structures governance. Hence, a Local Government of councils as well as procurements made Authority has been created as a regulatory by them. body for Local Councils to monitor, regulate, and build their capacity. This e-Council System with Integrated Procurement and Financial Management 50 Driving Development in Maldives South Asia Procurement Innovation Awards 2017 Possible to digitize manual procurement, in addition to the administrative and financial frameworks of Local Councils. Creation of a national hub in terms gathering data collected at local levels. Standardization of the local councils’ financial management system towards proper maintenance of data. Local Councils possess the necessary systematic procurement controls and approvals. Background online training. Further, there is a video There are 179 Island Councils, 18 Atoll conferencing system Councils, and 3 City Councils in the that enables interactions Maldives with a mandate to govern with Local Councils the affairs of their communities. To through a single central exercise governance, the e-Council government network, system includes the following modules which connects all at the moment: councils in the country. • Procurement and Finance Module, • Establishing procurement and financial processes through the Challenges Addressed electronic system, The key challenge is • Generating and maintaining to change the finance different reports, and procurement process of the Maldives as per the newly adopted • Administrative and Statistical decentralization system. This modules for all data mandated by mandates reports on revenues, the Act, expenses, assets, and liabilities, which effectively become the basis • Local council registries and for accounting and accountability. It projects, also implies that the councils prepare • Monitoring staff and annual work their consolidated financial statements plans, that incorporate revenues from the state budget, operating expenses, • Birth, Death, and House Registries, and revenues and expenses from and operations of business activities of the • All other statistical data councils. This has led to development mandated by Act. The e-Council of the e-Council Procurement and Project also comprises an online Finance Module as per the finalized platform (E-Filaa) to facilitate criteria. 51 Impacts Generated hindered communication flow from local governments to the central The establishment of web-based e-Council government. The advent of e-Council system has been an innovative effort in platform has, however, revolutionized terms of digitizing manual procurement, procurement and financial processes in addition to the administrative and of the local government organizations financial frameworks of Local Councils. at the national level, which is an This system also addresses another key innovation of its own kind. The new challenge by becoming a national hub in platform has developed new segments terms gathering data collected at local of local governance that enable users levels. Implementation of such a system to exercise all essential controls and has carved new pathways to standardize help gather reports required for financial the local councils’ financial management management and audit purpose. system towards proper maintenance of their ledgers, stocks, and inventories, In short, the e-Council system is slated and involves internal and external to achieve the following objectives: audits. All Local Councils thus possess • Implementation of consistent and the necessary systematic procurement uniform accounting policies across controls and approvals. all councils, • Clarity with respect to transactions Level of Innovation and functions of the personnel, During the initial phase, reports required • Processes being in line with for audit of Local Councils were not the statutory requirements properly maintained, as there was no of Public Finance Act, Public control over procurement and finance Finance Regulation, and IPSAS management. Due to unmethodical (International Public Sector workflow, it was difficult to ensure a Accounting Standards), transparent and proper procurement • Efficient and accurate accounting process. Lack of standardization was transactions with adequate the most pressing issue that had to be controls in place, resolved, as it affected the workflow of all government organizations. It • Process-based approach to identify, e-Council System with Integrated Procurement and Financial Management 52 Driving Development in Maldives South Asia Procurement Innovation Awards 2017 account for, and monitor revenues and costs of Local Councils, • Robust information management system at council levels, and • Provision of economic and efficient services to the public. Replicability The e-Council system enables small community organizations to enhance their administrative processes at the local level, which would greatly impact administration at the national level. The web-based platform enables all Local Councils to simultaneously work at island, atoll, and city council levels. As the system is on the central government network, there is systemic protection. Furthermore, the system facilitates other stakeholders, such as national organizations and line ministries, in accessing any data or statistics that they require. Foreign agencies can also use the system to provide aid to local government councils. Scalability and Sustainability This system facilitates necessary linkages between central and local governments for obtaining the required reports and statistical data in a timely manner. It assists Local Councils in maintaining their accounts in a proper way for audit purpose. The system is designed in a way to provide only the required amount of access to stakeholders, which enables the network to channelize important information as deemed fit. As the system has been developed under the world-wide IPSAS guidelines, it can used by any other country. 53 Lessons Learned The e-Council system demands lot of commitment before it can be fully developed, with various modules being incorporated gradually. Since the global business market and technology is always evolving, it is important to continuously upgrade the system to enhance its efficiency and effectiveness. However, due to limited skilled manpower and increasing responsibilities caused by devolution, Local Councils are unable to maintain up-to-date records, which make reconciliation and review difficult. The procurement process has also been weak in terms of adhering to regulations and maintaining proper records. To overcome these hindrances in establishing local governance system in the Maldives, utmost priority is being given to fully understand the existing financial framework and align the local governance system with that of the central government. Discussions with experts from the field have been carried out and a new local government financial management system has been finalized in collaboration with Ministry of Finance and Treasury, and Auditor General’s Office of Maldives. Furthermore, a separate chart of accounts for local government organizations has been developed, so that they are in alignment with the central government. e-Council System with Integrated Procurement and Financial Management 54 Driving Development in Maldives South Asia Procurement Innovation Awards 2017 Citation This submission is selected for the Winner Award from Nepal. A community demand-driven program, targeting enhancement of livelihoods of grass root- level population, annual targets for registration of community organizations, and reaching agreements for income generation and community infrastructure activities for their working area based on program’s annual budget, requires rapid assistance in review and appraisal of proposals and time-bound monitoring and evaluation of progress. This submission from Nepal Poverty Alleviation Fund (NPF) presents the innovative strategy of a roster followed for identification, selection, and recruitment of individual consultants for drawing up their time as required; and how such intervention can scale up project implementation. PAF is using this approach for the last seven years. And, appraisals/ monitoring of around 18,000 number of income generation projects and 3,000 number of community infrastructure projects have been done by this system. 55 MIS-Driven Roster of Individual Consultants Enabling Achievement of Annual Targets in the Community Project of Nepal’s Poverty Alleviation Fund {This article is an abridged version of the submission on “MIS-Driven Roster of Individual Consultants Enabling Achievement of Annual Targets in Nepal Poverty Alleviation Fund’s Community Project Approvals and Monitoring” made by Mr. Shankar Prasad Yadav, Procurement Consultant, Nepal-India Regional Trade and Transport Project, Ministry of Commerce, Kathmandu, Nepal, for the South Asia Procurement Innovation Awards.} Summary Poverty Alleviation Fund (PAF) is a of professionals in the project, individual special and targeted program to bring consultants have to be selected as per excluded communities of Nepal into the WB procurement guidelines. As program mainstream of development. The targeted coverage has increased, a big challenge program, started in 2003 in 6 districts, is appointing of consultants in time. Thus, has now expanded to 55 of the total 75 PAF program faced difficulties in achieving districts. PAF has adopted a demand- its annual physical and financial targets. To led, community-based approach to overcome this, in consultation with World alleviate poverty, with 33,124 community Bank, a roster of individual consultants has organizations being registered by the been built for timely award of contracts, end of 2015-16. The core programs of which supports timely achievement of PAF include income generation and annual targets. community infrastructure activities as two major demand-driven projects. The main funding agency in this regard is the World Bank. Due to insufficient number MIS-Driven Roster of Individual Consultants Enabling Achievement of Annual 56 Targets in the Community Project of Nepal’s Poverty Alleviation Fund South Asia Procurement Innovation Awards 2017 Innovation of a roster for procurement of individual consultants has led to better implementation of the PAF program. Procurement Unit is finding sufficient time for implementing other activities as per the procurement plan. Reduced the cost of advertising the Request for Expression of Interest (REoI). 20-30 people of each roster group find assignments/jobs throughout the year. Background about 40 days on average before a contract could Under the PAF program, poor and be awarded for a single disadvantaged groups themselves assignment. This led to the are placed in the driving seat of following issues: (i) Non- development efforts to bring the fulfillment of annual physical excluded communities into the and financial targets, (ii) mainstream of development. Each Blame game when targets Portfolio Manager or District In Charge are not achieved, (iii) has an annual target of registering Wastage of huge amounts community organizations and signing in advertisements seeking the agreement for income generation individual consultants. and community infrastructure activities These issues have, however, for their districts based on the been taken care of after PAF program’s annual budget. The Portfolio authorities, in consultation Manager seeks supply of individual with the World Bank, took a consultants for project appraisals decision to introduce an innovative before registering a community roster system for appointing organization and signing an agreement individual consultants. As a result, with it for income-generation and project consultants are now available community infrastructure projects. In for awarding contracts within a week. addition, individual consultants have The innovation has greatly helped in to monitor and evaluate the projects achieving annual targets, reducing and enter relevant data about the administrative costs, and saving specific project into the PMIS (Project time. A single notice in a year seeking Management Information System). individual consultants brings enough of them on the roster and they are given assignments on a Challenges Addressed rotational basis. Procurement of individual project consultants in the beginning took 57 Impacts Generated Level of Innovation Innovation of a roster for procurement of As per guidelines issued to World individual consultants has led to better Bank Borrowers for Selection of implementation of the PAF program. The Consultants, individual consultants Procurement Unit is also finding sufficient have to be selected on the basis of time for implementing other activities their qualifications for the assignment. as per the procurement plan. One-time Consultants shall be selected after evaluation for qualifying individual comparing qualifications of at least consultants and preparation of roster for three candidates from among those a full fiscal year assists in timely selection who have expressed their interest in of individual consultants for appraisal/ the assignment. There are more than monitoring of income generation and 400 such assignments per package. community infrastructure projects and Thus, the Procurement Committee proper data entry into the PMIS. This helps had to spend a lot of time in choosing achieve the annual targets of the PAF individual consultants. Following this program. The innovation has also reduced innovation, the Procurement Committee the cost of advertising the Request for now evaluates consultants only once Expression of Interest (REoI) by individual a year to develop a roster of individual consultants and their evaluation process. consultants for each category of works. About 20-30 people of each roster group The roster for each category is prepared find assignments/jobs throughout the by taking the top 20-25 candidates year and are able to complete their on merit basis. The detailed list of tasks in close coordination with the consultants is uploaded in the PMIS Project Coordinator. Hope of getting (Project Management Information another assignment after completing the System). Consultants in the merit list previous one is encouraging individuals are appointed on a top-to-bottom and in becoming accountable for their task. rotation basis once demand is placed by Disputes are also minimal. the Portfolio Manager. After completion of one cycle, the second cycle is again MIS-Driven Roster of Individual Consultants Enabling Achievement of Annual 58 Targets in the Community Project of Nepal’s Poverty Alleviation Fund South Asia Procurement Innovation Awards 2017 started from the top rank. On completion of the assignment, the consultant is evaluated based on a report submitted by the Project Coordinator before final payment. Replicability This innovation of roster for individual consultants can be replicated for all community-based projects, where expertise of individual consultants is required. Institutions having lesser knowledge of procurement and contract management too can apply this innovation for appointment of individual consultants. As this innovation is very simple, it can be replicated in any other project of the country or abroad. Scalability and Sustainability PAF has been using this approach for the last seven years. Appraisal/monitoring of around 18,000 income-generation projects and 3,000 community infrastructure projects has been done using this system. Disputes among consultants during contract period in this innovation are minimal. Getting another assignment after completing the previous one encourages individuals to ensure quality and be more accountable for their task. The approach is thus also sustainable. Lessons Learned This innovation has led to cost savings, transparency, and streamlining of the procurement process. Data-based management system ensures transparency and quick supply of individual consultants on rotational basis. An orientation program about the assignment for selected consultants can help them focus on their job as per the project requirement. Evaluation of the job done by the consultant after each assignment ensures that they are sincere with regard to their job. A Standard Format for Reporting can also be developed for a quick review of reports submitted by the consultants. 59 MIS-Driven Roster of Individual Consultants Enabling Achievement of Annual 60 Targets in the Community Project of Nepal’s Poverty Alleviation Fund South Asia Procurement Innovation Awards 2017 Citation This submission from KP-Southern Area Development Project on Pointer – a web-based monitoring application, is selected for the Winner Award at country level. Pointer is developed to capture geo-tagged images of physical progress, serving as Eyes for the project, with an added Interactive Voice Response System (in local languages) that provides access to local communities to provide feedback on what is going on in the field, which serves as Ears for the project. Pointer is developed as a web-based tool to track physical progress remotely. 1,189 activities have been tracked using Pointer and around 500 complaints have been reported and resolved using the IVR system, showing the economic value and replicability in similar projects. With a set and recurring cost of about $6,000 per annum per project, this is a low cost but high-impact innovative solution for contract monitoring, using technology that is suitable to all beneficiary groups. Its wide adaptation in many other projects in Pakistan makes it an innovation that can be replicated and scaled up for better contract management and project delivery. 61 Pointer – Eyes and Ears of Project Supervision for KP-Southern Area Development Project {This article is an abridged version of the submission on “Eyes and Ears of Supervision by Bank Procurement Team for KP-Southern Area Development Project” made by Mr. Ghulam Habib, Project Director, Southern Area Development Project, Dera Ismail Khan, KPK, Pakistan, for the South Asia Procurement Innovation Awards.} Summary Pointer, a web-based application that This enabled the teams to “listen and see” captures geo-tagged images of works as to what is actually happening on the being implemented and an Interactive field while the development project is being Voice Response (IVR) system in local implemented. Pointer has thus proved to be languages, allowing resident communities a cost effective and time-efficient solution to tell what is going on in the field in to ensure completion of tasks and physical KP-Southern Area Development Project existence of activities being implemented in Pakistan’s Khyber-Pakhtunkhwa under KP-SADP. (KP) province, has turned out to be an effective tool in monitoring projects in this remote and security-sensitive region. Background Keeping in mind difficulties involved while implementing the KP-Southern Pointer is a tool developed to capture Area Development Project (SADP), the geo-tagged images of physical progress, Project teams came up with a solution by which serves as “Eyes” of a project developing “Eyes and Ears of Supervision”. under implementation. It comes with an Interactive Voice Response (IVR) system Pointer – Eyes and Ears of Project Supervision for KP-Southern 62 Area Development Project South Asia Procurement Innovation Awards 2017 Significantly reduced the turnaround time for resolution of complaints. Helped the teams to complete tasks in a timely manner. The system has turned into a Citizen Engagement Tool. Communities are recording their needs on the field, like requirement of water facility or paving of streets. available in local languages, which particular in FATA and KP, allows resident communities to tell primarily due to security what is going on in the field. This concerns. The resultant travel serves as “Ears” for the project. The restrictions constrained web-based tool thus remotely tracks periodic field supervision of the physical progress of any project. activities being financed by It allows the Government agency the Project and Bank teams. responsible for implementing the Thus, frequent monitoring project, to capture geo-tagged images and validation of the project’s of assets / facilities created under the physical progress, particularly project, which are then displayed on projects with a wide a GIS-based platform. The images are geographic span / foot-print, captured through a smart phone and became a challenge. This automatically tagged with the GPS led to an innovative solution coordinates. This enables sequenced in the form of Pointer, which monitoring, as it captures the different was utilized to track 1,189 phases of the project. For example, the activities. Around 500 complaints before, during, and after images of a were reported and resolved using the road construction project in Federally IVR system. The system also enabled Administered Tribal Areas (FATA), females in remote areas to access or a community shelter in Khyber the system directly from their homes. Pakhtunkhwa (KP), can be uploaded Project and Bank teams could thus get to Pointer, which allows the task team weekly status of the project through to remotely monitor physical progress. calls / complaints received, leading to Even something as simple as office resolution of the complaints. furniture procured through Project funds can be included in the Pointer. Impacts Generated Challenges Addressed The online monitoring of complaints by the Project has significantly The Project teams were unable reduced the turnaround time for to travel to certain project areas, resolution of complaints. Tracking 63 of physical progress of activities using Pointer system requires merely an Pointer has helped the teams to complete understanding of how to make a call. tasks in a timely manner and ensure The rest is taken care by the system physical existence of the activities being automatically. The system is multilingual implemented. With time, the system has and supports local languages. even turned into a Citizen Engagement Tool, where communities are recording their needs on the field, like requirement Replicability of a water facility, paving of streets and so on. The development of Pointer had been for the KP-SADP project. However, the tool also found utility in implementation of the Punjab Land Record Management Level of Innovation Information System Project by way Any good software must respond to of tracking construction of field data the needs of the user. While developing centers. The tool also helped implement Pointer and Interactive Voice Response the Electricity Distribution and (IVR) system, it has been ensured that Transmission Improvement Project, and in addition to responding to the needs Disaster and Climate Resilience Project. of Bank teams, requirements of the Further, the IVR model found replication Government as well as Third Parties are in the Sindh Agriculture Growth Project also adequately addressed. The design of for getting feedback from farmers functional specifications of Pointer was with regard to agricultural equipment finalized following several consultations supplied to them. with implementing agencies, private sector, and community beneficiaries. The IVR-based Complaint Redressal Scalability and Sustainability Mechanism is an automated system, which can be accessed by anyone from Pointer is on an open source platform. the field dialing from a common phone. Thus, there is no licensing fee for This is different from an SMS-based software. The only expenses are web- system, which is limited only to people hosting charges, which are less than who can read and write messages. The USD 150 per year. Pointer has been Pointer – Eyes and Ears of Project Supervision for KP-Southern 64 Area Development Project South Asia Procurement Innovation Awards 2017 developed in a way that any project, either financed by the Bank or Government, can easily be configured in just a few clicks. Since it has been developed using a web platform, anyone from around the globe can use it to upload images and see the progress. IVR is ported on a toll free number and has a web-based platform. Any new project within Pakistan can easily be ported with some customization in voice menu. There are though subscription charges of approximately USD 6,000 per year. Lessons Learned The system has paved the way for KP-SADP to easily track the physical progress of community projects in an efficient and effective manner. It is one of the best systems for asset monitoring and management through uploading of pictures of assets purchased under World Bank financing. The system is very user friendly and can be utilized by all community people. It is not limited to any specific language. Communities can submit their issues regarding their schemes at any stage. This system has provided an easy way and window of opportunity to all local communities for submitting their needs as per their priorities. It has also provided access to females in remote areas for connecting with the system directly from their homes via mobiles. Using Pointer, Project teams have been able to track physical progress efficiently, effectively, and economically. This has also ensured physical existence of activities being implemented and timely completion of tasks. 65 Pointer – Eyes and Ears of Project Supervision for KP-Southern 66 Area Development Project South Asia Procurement Innovation Awards 2017 Citation This submission on “Guide to Project Management and Contract Management (GPMCM)”, developed by Ministry of Finance, with support of Asian Development Bank, aims to educate and guide all stakeholders in reducing negative impacts when engaged in contract/ project management. With an online depository for various government instructions, guidance, forms, and submission claims, GPMCM has been used extensively, leading to better understanding of various provisions among staff and other stakeholders. As recognition of learning programs that directly contribute to improving procurement performance, this effort is selected for the Winner Award from Sri Lanka. 67 Guide to Project Management and Contract Management (GPMCM) – New Approach to Improve Efficiency and Effectiveness of Procurement Outcomes {This article is an abridged version of the submission on “New Approach to Improve Efficiency and Effectiveness of Procurement Outcomes” made by Mr. MKP Kumara, Director, Procurement Monitoring Unit, Ministry of Finance, Colombo, Sri Lanka, for the South Asia Procurement Innovation Awards.} Summary The public sector in Sri Lanka enters into of time, quality, and public money. To avoid a large variety of contracts, which vary these, a “Guide to Project Management and significantly in value, their duration, and Contract Management (GPMCM)” has been complexity. Consequently, the nature and prepared as a comprehensive document to extent of contract management practices aid and help the stakeholders engaged in also vary depending on the size, nature, project management. complexity, and risk profile of each contract. Entities and others involved in managing contracts must therefore be Background conversant with the general principles and practices that apply to such contracts. Government of Sri Lanka has implemented a This will enable them to choose contract large number of infrastructure development administration and management practices projects during the past decades. Some of that are appropriate to their particular them experienced scope changes, delays, situation. Lack of such knowledge will cost overruns, disputes, and protests from lead to considerable wastage in terms society. This resulted in additional costs, prolonged social and environmental impact Guide to Project Management and Contract Management (GPMCM) – 68 New Approach to Improve Efficiency and Effectiveness of Procurement Outcomes South Asia Procurement Innovation Awards 2017 Meeting needs of citizens in time. Delivering service to the satisfaction of both the contracting parties. Ensuring benefits and value for money. Making provisions to ensure that there are no disputes, surprises, or delays. during construction that denied the iii. Ensures uniformity in general public use of infrastructure contract management facilities for years, and underutilization activities of diverse projects of local and foreign funds. Key factors belonging to different that contributed to this were lack organizations; iv. Checks of proper project management and recurrence of problems/ contract management skills, and weaknesses through lessons dispute resolution within Project learned and corrective/ Management Units. To overcome these preventive measures; issues, the Ministry of Finance in Sri v. Facilitates training of Lanka decided to streamline project project staff in project/ and contract management activities, contract management, which led to formulation of GPMCM, thereby enabling them with technical assistance from the to apply proper contract Asian Development Bank (ADB). management practices; vi. Provides for establishment of a Quality Management System; vii. Challenges Addressed Assists project staff in safeguarding Employer’s interests and fulfilling GPMCM includes a recap of the contractual obligations, so as to avoid legislation and related policies unnecessary claims, delays, additional relevant to public sector contracting. costs, and disputes; and viii. Helps the It focuses broadly on effective implementation agency in completing management of a contract, right from the contract within time, budget, and entering into a contract to closure/ quality specified. termination of the contract. GPMCM: i. Defines responsibility and authority for specific activities in contract Impacts Generated management; ii. Assists project staff in ensuring compliance with Operationalization of GPMCM has contractual obligations when carrying impacted three key stakeholders – out contract management functions; citizens, government officials, and 69 contractors. The impacts are by way increases on timely completion of of: i. Meeting needs of citizens in time, quality infrastructure. ii. Delivering service to the satisfaction of both the contracting parties, iii. Ensuring benefits and value for money, Replicability iv. Understanding of obligations by stakeholders under the contract, and v. GPMCM provides guidance to Making provisions to ensure that there are staff involved in implementation no disputes, surprises, or delays. and monitoring of infrastructure development projects. For the purpose, it uses the harmonized version of FIDIC (Fédération Internationale des Level of Innovation Ingénieurs-Conseils) Multi-Lateral GPMCM has 3 three broad sections: Development Banks (FIDIC Pink Book). The Guide will also be of interest to (i) Introduction, Principles, and Concepts members of Procurement Committees, of Contract Management; (ii) Contract Management Procedures; and Technical Evaluation Committees, and staff in Project Management Units. (iii) Forms, templates, and specimen GPMCM can be used by both public letters for each contract management and private sector organizations in action. Forms, templates, and specimen Sri Lanka for better management letters have been customized to meet and administration of government various projects needs. There are IT-based construction contracts. As GPMCM project management tools to facilitate incorporates many foreign funding project and/or contract management. The agency requirements, standard forms templates and forms are downloadable and formats, and FIDIC conditions, this for free from the Ministry of Finance guide can be replicated for any other website, with facility for e-filling. Value country with minimal changes to suit created by this Guide is confined not the local situations. GPMCM has already only to post award but applies to the been shared with member states of the whole procurement process. There South Asia Region on consent of the are both monetary and non-monetary South Asia Region Public Procurement value creations, where value for money Network (SARPPN). Guide to Project Management and Contract Management (GPMCM) – 70 New Approach to Improve Efficiency and Effectiveness of Procurement Outcomes South Asia Procurement Innovation Awards 2017 Scalability and Sustainability Both public and private sector organizations are under pressure to reduce costs and improve financial and operational performance. New regulatory requirements, globalization of markets, increase in contract volumes, and complexity of projects have underlined the importance and benefits of effective contract and project management. There is also need to reengineer and improve contractual processes for compliance. GPMCM has thus been presented to various professional organizations and groups representing the construction industry including the Construction Industry Development Authority (CIDA). Their observations and suggestions for improvements have also been incorporated into the GPMCM, which is currently available on the website of the Ministry of Finance. Lessons Learned This Guide has been written in simple English, as it is intended to serve as a first reference point for project staff in managing their projects effectively and efficiently. Irrespective of the source of funding, the guide provides generally accepted practices and procedures common to many projects, which are useful in addressing issues at the project implementation stage. The rights and obligations of parties to contracts have also been explained in the Guide. Recognizing that users of the Guide will have different information needs, templates have been provided for project management documents/forms with reference to each aspect of contracting activity. The Guide does not attempt to address all issues that may need to be considered in a particular circumstance. It identifies the key issues and considerations that entities should be aware of in administration and management of contracts. As such, the Guide is intended to be a general reference document for senior managers, contract managers, and stakeholders involved in project management. 71 Guide to Project Management and Contract Management (GPMCM) – 72 New Approach to Improve Efficiency and Effectiveness of Procurement Outcomes