eProcurement Scotland

Frequently Asked Questions About Electronic Tendering and Auctions - Page 1

What exactly is "electronic tendering"?

Public sector organisations have historically employed formal tendering procedures prior to awarding contracts. With the advent of electronic communications (e-mail, the internet, etc.) it is now possible to replace much of the paperwork involved in this process with electronic equivalents.

What are the benefits of electronic tendering?

Electronic tendering holds benefits for both buyers and suppliers.

For suppliers the potential benefits include:

• elimination of costs of printing proposals
• elimination of lead-time of printing proposals
• elimination of postage/courier costs and lead-time
• electronic confirmation of receipt by buying organisation of proposal
• receipt of proposals in electronic format allows for process efficiences (for example, members of tender evaluation panels do not need to wait on receiving paper copies)
• supporting a strategy of electronic records management
• electronic audit trail
• it may open the requirement to a wider market (for example, by allowing suppliers to tender who might otherwise be discouraged by tender printing and postage costs or lead-times)

What is an electronic auction?

Electronic auctions (or reverse auctions) are conducted using internet-based software.'Reverse auctions' are auctions where sellers bid to provide specified goods or services to a buyer.

How does electronic tendering and auctions fit into the eProcurement Scotl@nd service?

Under our agreement with Capgemini and Elcom, member organisations have access to an electronic tendering (or eTender) system. This is an element of the core service and is included in the ePS service without additional cost. The eTender system is entirely separate from the eProcurement system (PECOS). It is also likely to be used by a separate - and much smaller - user-base than PECOS. The eTender system focuses on the procurement activities leading up to contract award (seeking quotations, tender exercises, etc.) in contrast with PECOS (where the focus is on the process of ordering from existing contracts with suppliers).

What does the eTender and eAuction system do?

At core the system provides the means for buyers to issue pre qualification questionnaires and invitations to tender by e-mail. Suppliers then respond via an internet-based interface to the system. The system can ensure that suppliers' electronic responses are held securely until a particular time (the equivalent of "tender opening time") when they are made available to the buying organisation.

While the system also offers additional functionality (such as document management and evaluation tools), organisations can choose the extent to which they make use of the system beyond its core functionality.

What is the technology behind the eProcurement Scotl@nd eTender and eAuction system?

The system is provided through eProcurement Scotl@nd by Elcom, Capgemini's sub contractor. (Elcom refer to the product as their Dynamic Trading Centre (DTC.) More information on the technology behind the system can be found at:

• http://www.uk.elcom.com/elcom.asp?page=89

What functionality does the eTender system have?

The eTender system provides the following functionality:

• the ability to issue electronic requests for quotations, invitations to tender, etc.

• electronic tender box for the secure receipt of quotations, tenders, etc.
• electronic document workflow for the drafting of documents, and tender evaluation
• bulletin-boards for providing pre-tender Q&A material to suppliers
• electronic post-tender clarification
• detailed analysis and evaluation support tools
• management information
• audit trails
• ability to build up libraries of frequently-used documents
• ability to create templates of preferred procurement processes

How much effort is likely to be involved in implementing electronic tendering?

While the system is free (for both buyer and supplier), buying organisations should recognise that implementation of a new system requires an investment in terms of time and management support. The biggest challenge (and most variable factor) in implementing is likely to be in deciding how to adapt current, paper-based procedures to electronic equivalents.

In terms of manpower, buying organisations should count on appointing one person (most likely from within procurement) to act as implementation lead, another (or the same) to act as system administrator and - possibly - a third as "librarian". All of these are part-time - and possibly short-term - roles.

Use of the system's auction functionality does not depend so much on any implementation effort (but may require a greater degree of external support) but rather on more strategic aspects.

Are there any IT barriers to implementing the system?

Like PECOS, the eTender/eAuction system is fully hosted so that IT barriers are minimised. Users (both buying organisations and suppliers) require only a moderately-specified PC (with internet access) in order to access the system. Note, however, that the supports Internet Explorer and Netscape browsers.

Does the system employ applets, or similar?

Again like PECOS, the system uses a small number of session-level applets that are downloaded each time a user accesses the system. However this does not require any user intervention and the applets connect to the remote system using normal TCPIP Ports.

How should buying organisations identify who in their organisation should take forward electronic tendering and auctions?

Electronic tendering should only be used by your organisation's procurement professionals who are already fully familiar with procurement procedures. Even within that group, bear in mind that individuals will vary in the speed with which they feel comfortable adapting to new systems. Arguably, the eTender system is one which lends itself to a period of experimentation by individuals rather than a top-down approach.

Do users in buying organisations require training on the system?

Yes. The system is highly sophisticated and formal training is essential prior to use. A three-day training course covering full functionality is run four times per year and is provided as part of the eProcurement Scotl@nd programme. It is also possible to have customised courses for groups of buyers.

What continuing support do users in buying organisations have?

Apart from the training course, the system provides on-line system manuals. For technical problems, Elcom provide a help-desk to nominated eTender Administrators in the same way as they do for PECOS. In addition, the eProcurement Scotl@nd Programme Office is supporting the eTender and eAuction system by offering advice, compiling Users' FAQ's, developing best-practice guidance etc.

What level of support do suppliers need in order to use the system?

The software is designed so that the supplier's interface with the system is user-friendly and sufficiently self-explanatory that tenderers familiar with the Internet can navigate their path through the system without recourse to the buying organisation. (The supplier interface also provides a Help button which links to an online Supplier Guide.)

Experience to date suggests that suppliers do find the system relatively easy to use and generally do not require additional assistance. Buying organisations can assist suppliers by explaining beforehand that electronic tendering will be used, issuing guidance material and (if necessary) holding explanatory supplier conferences. It also helps to start off in commodity sectors where the supplier-base is likely to be more experienced in using IT.