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Centralized or De-centralized Electronic Government Procurement?

 

November 12, 2009

We attended the 3rd Global Conference on Electronic Government Procurement (e-GP) held at the Inter-American Development Bank in Washington DC. The event was sponsored by the Multilateral Development Banks e-GP Working Group. Trends and issues in public procurement were discussed. Numerous case studies were presented in this valuable conference. FreeBalance was tweeting to provide a running commentary of what we were learning during the event.

e-GP objectives differ among countries. This has resulted in different electronic procurement regimes depending on the country context. There are factors that encourage the centralization or decentralization of public procurement across multiple dimensions. In general, the centralized approach encourages:

  • Mandatory use of country e-GP
  • Opening up of public procurement to more players, particularly international vendors
  • Standardization of procurement documentation and procedures
  • Leveraging e-GP to support tendering of complex procurement (low volume, high value)

 

The de-centralized approach encourages:

  • Flexibility in procurement procedures
  • Optional usage where e-GP can have the biggest impact
  • Local businesses and the building of local capacity
  • Leverage e-GP to support the purchase of commodity products (high volume, low value)

There appears to be five main forces affecting country e-GP priorities:

  • Transparent government that favours centralized model
  • Building Small and Medium Size Enterprises (SMEs) that favours the de-centralized model
  • Value for money, accessibility to government opportunities and environmental sustainability that can favour either the centralized or de-centralized model

Of course, this is a simple generalization. Technology and legal reform can enable standardized optional usage of e-GP to support SMEs for complex tenders.

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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