VII Conclusions and Suggestions

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VII Conclusions and Suggestions

    IIAS Conference Paper draftworking group ??

    The Development of E-Procurement System in Taipei City Government

    Che-Ming Hwang

     Because of joining World Trade Organization and subscribing Government Procurement Agreement, Taiwan will open its totally government procurement market, about NT$200,000,000,000, to the international society. In order to improve procurement efficiency and encourage private enterprises to participate in, the government had taken the law of government procurement on May 27, 1999, to satisfy the political, economical and legal requirements domestically and internationally.

    According to the statistics of the Public Construction Commission in 2000, there were 92,618 government procurement cases that took more than NT$100,000, and 59,979 of them that were decided took less than NT$1,000,000. It was about 64.76% of total cases. However, the amount of the decided was about NT$23,900,000,000, only occupy 4.83% of total amount of decided, NT$494,400,000,000. We could find that the decided cases that took less than NT$1,000,000 use the most resource but cost the least. If we can deal with this kind of case in Internet, we can decrease a lot of procurement cost.

    As we know, the government E-Procurement system, which is operated by the Public Construction Commission, can achieve the bidding procedure. However, the tender opening procedure is still on the testing stage. The E-Procurement system that we proposed emphasizes that the security of procurement procedure is better than current system. In security technology, we adopt IC card, digital envelope and Advanced Encryption Standard (AES); in system procedure, the highly secure E-Procurement system is also based on the law of government procurement. Of course, our system cannot compare with the current one


    in system scale and completeness; we hope to provide a new vision in the security aspect and to improve the quality of our country's E-Procurement system.

Department of Public Administration Policy, National Taipei University.



    Abstract---------------------------------------------------------------------------4 I Foreword---------------------------------------------------------------5 II Introduction-----------------------------------------------------------7 III Trends of Electronic Government ---------------------------11 IV Electronic government Procurement Systems----------15

    V The Electronic government Procurement Systems

    in the Republic of China----------------------------------------17 VI The Electronic Procurement Systems in Taipei City

    Government----------------------------------------------------------29 VII Conclusion and Suggestions----------------------------------37 Reference----------------------------------------------------------------------39

Table 1, Developments of the Electronic Government Procurement Systems---------27

    Table 2, the Statistics of the Electronic Tender-requisition/submission cases in Taipei

    City Government, 2003-------------------------------------------------------------30

    Table 3, the Statistics of the Electronic Tender-requisition/submission cases of

    public institutions in Taipei City Government------30



     The purpose of this research is to examine the development of Electronic government Procurement (e-GP) in the Republic of China (ROC) from the viewpoint of Government Reengineering. In the recent years, because of the advance in the Information Technology, the rapid growth of the Internet and the prosperity enjoyed in the Electronic Commerce, the ways businesses conduct their marketing, management, services, and behaviors have dramatically changed. Governments and international organizations around the world all pay close attention to such trends and actively promote the projects of electronic government services. Based on the policies of promoting e-Government, the existing plans of e-GP have become government’s

    primary task. By doing so, the ROC government intends to establish an open, transparent, fair, and efficient operation environment for government procurement. According to the current research on this field, topics are more related to the planning and promotion of e-government (Need to convey meaning more clearly) . In comparison, research examining its effectiveness and achievements are much fewer. Therefore, this paper will adopt the concept of government reengineering to establish evaluation standards, and use Taipei City

    Government as an example to analyze its procedures of e-GP and examine the actual effectiveness in terms of annual-goal achievement rates on requesting tenders and submitting tenders as well as the statistic reports of tendering cases.


I Foreword

    As time progresses, innovation and flexibility have become the key factors for the public and private institutions in pursuing competitiveness. Lately, with the development of the Internet, the applications of electronic Commerce between government institutions and private businesses (Business to Business Electronic Commerce, B2B) have received great importance. According to a survey on the long-term market forecast on B2B conducted by an American company, Gartner, the global B2B trade volumes have exceeded US 433 billion dollars. By the year of 2005, the total amount is expected to reach US8 trillion and 530 billion dollars. However, before any government institution or private business participates in B2B (ecommerce), they have to commence the internal Electronic and reengineering processes.

    Owing to the deterioration of global economies, the financial situations of government departments around the world become even worse. However, people’s expectations for the quality and quantity of service

    provided by governments have never abated. Meanwhile, the traditional ways of government reforms including streamlining manpower, tightening administration budgets, and preventing corruption and bribery are not so effective as to immediately reduce the difficulties faced by the public service sectors (Osborne Gaebler, 1992). Therefore, the public administrators have to develop more effective apparatuses to design and manage several of public projects. Information technology is one of the few options that has the power to improve modern management (Chang-tai Qiu, 2000). Since the


    invention of computers, government institutions have been using the latest information technology to improve operational efficiency.

    However, up to now, the most common application of information technology used in governments has been either publishing news or computerizing the existing administration procedures (Jing Xiang, 2000; Zhong-bin Lee & Chao-meng Huang, 2001 ).

     What the government officials need to do is not merely

    computerizing massive amount of jobs but seeking for innovative solutions for new problems. The main purposes of the Electronic government Program in 2001, planned by the Executive Yuan, were to improve the service effectiveness of all administration departments, the efficiency of handling public affairs, and the quality of decision making processes by implementing proper information technologies. Among all the objectives stated above, “Information Sharing and Exchanging Scheme” was listed as the primary goal that needed to be achieved

    foremost. The goal of promoting e-services for Taipei City Government is to re-create its own value. The evaluation criteria for government e-services must include providing complete information, selecting appropriate solutions to solve technical problems, integrating strategic cooperation companies, applying collective marketing strategies, and building e-organization procedures. Among these, setting up payment mechanisms is especially important. The mechanisms should be able to provide a risk free, dead-loan proof, secure, transparent, and comfortable trading and shopping environment.


II Introduction

    Procurement is a commercial system in which a tender case is generated and can involve only one buyer but more than two sellers. The Electronic Procurement Systems mentioned in this paper is a set of procedures that are based on the Government Procurement Act and can be applied on the Internet. The purpose is to create a set of ideal on-line electronic procurement systems to meet government procurement demands.

    A. Research Background

    For the past 20 years, because of the rise of personal computers and the Internet, commercial behaviors among people have changed from a face-to-face trade interactions to electronic commercial modes that mediated through the Internet. One may well say that we are transforming from an industrial society into an Internet one in which various kinds of commercial transaction are conducted through the Internet. The Internet is characteristic by its convenience, time saving, and cost reducing, which enable businesses and government greatly minimize cost, manpower, and time.

    Since the implementation of the Government Procurement Act on 27 May 1999, all government institutions, public schools and businesses have had to follow the Act when commencing procurement businesses. For the recent years, the ROC government even more actively promotes the idea of electronic procurement procedures, which use the Internet to greatly reduce the costs, time, and manpower spent on procurement.


    At present, the tender-requisition/submission Procedures of the Government Procurement Systems, developed by the Public Construction Commission and Chungwa Telecom Company, has successfully realized the requisition and submission stages in the procurement procedures.

    In addition, to cope with the government “E-Industry Projects”, the

    National Science Council has authorized domestic academic sector to develop a set of open, fair, and impartial electronic procurement systems that comply with the Government Procurement Act. Currently, the latest technology has been integrated into the existing systems to form preliminary electronic procurement systems. Furthermore, in order to introduce the Electronic Signatures Act to the public (published on the website of the Department of Commerce, Ministry of Economic

    stAffairs), which was put into force on 1 April 2002, the National Science

    Council even held a press conference named “Electronic Procurement Systems Research Results” on 14 March 2002 in the Science Building. The press conference aimed to introduce the use of electronic signatures systems to the public so that people may have general understanding of such systems.

B. Research Objective

    The objective of this paper is to examine the Electronic Procurement Procedure of Taipei City Government so as to analyze and evaluate actual cases, and describe in detail the whole Procedures. After critically examining the Electronic Procurement Procedures, this paper suggests that such Procedures should be adopted more


    comprehensively to reduce procurement costs incurred by public institutions and private companies .

    This research reveals that a secure electronic procurement system should possess the following characters:

    1. The buyer i.e. the government organization cannot falsify ceiling

    prices. Only when the time for opening tender arrives can the

    organizer disclose the ceiling price.

    2. Only the suppliers that have successfully registered with the

    Certifying Authority can participate in the tender processes. The

    verification of the qualifications and identities of suppliers will be

    conducted by the Certificate Authority. Suppliers who fail to register

    in the Certificate Authority can view the tender cases but cannot

    participate in the bidding. The Certificate Authority can be the

    Government Certificate Authority (GCA) operated by the Research,

    Development, and Evaluation Commission of the Executive Yuan.

    The GCA is responsible for the issuing, managing, and abolishing of

    national certificates. In addition to GCA, the Certificate Authority

    can also be the Electronic Procurement Certificate Authority (EPCA)

    which is designed and built within the Electronic Procurement

    Systems. The EPCA can also certify the suppliers that successfully

    register in the GCA. The main function of the EPCA is to issue

    certificates to registered suppliers.

    3. Bidders can prove that they have officially participated in the

    bidding processes. The bidders can use the receipts issued by the

    electronic transaction systems as an evidence to prove that they


    are registered bidders.

    4. The identities of bidders and the awarded bidder can kept


    5. The government organizers cannot falsify the tender prices

    provided by registered bidders. In other words, the confidentiality of

    sealed bid forms can be well protected.

    6. The awarded bidder holds proof of winning. In other words, the

    awarded bidder has the evidence of awarded bid forms. 7. Every bidder can examine the final result.

    8. Unreasonable complaints will not be accepted.

    9. A registered bidder can only request one blank bid form and bid

    once. The purpose is to ensure impartiality.

C. Research Structures

    The first part of this paper is the foreword. The second part

    introduces the research background, objectives and structure. The

    third part discusses trends in Electronic government development.

    The forth part explains the Electronic government Procurement

    Systems. In the fifth part, the paper focuses on the present situations

    of the Government Procurement Systems of the ROC. Finally in the

    sixth part, the paper discusses the Government Procurement

    Systems adopted by Taipei City Government and foresees its future

    development. In the conclusion, the paper gives a brief summery

    and provides some suggestions.


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