Digitalization of Public Procurement and Future Sustainable Development of Sri Lanka
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Mr. Christy Perera BSc. (SL), MCIPS (UK), PGDEPM (Italy), PGDPIT (Italy), CMP – NUS, Singapore National and International Procurement Advisor Interviewed by: Ms. A. A. I. Lakmali Coordinator – MSc in Public Procurement and Supply Chain Management, Faculty of Management Studies, The Open University of Sri Lanka.
The general public is not particularly aware of the importance of public procurement. Please tell us what public procurement is.
Procurement involves purchasing goods and services or works. In many developing countries, around 20 percent of the Gross Domestic Product represents public procurement. More importantly, public funds or taxpayers’ money is used for public procurements. In addition to that, public procurement addresses broader economic, social, and environmental aspects of a country. Hence, public procurement is a critical factor for any country which supports economic development and prosperity of the country.
You are an expert in the digitalization of public procurement. Please share your experience involving such digitalization projects.
I have represented Sri Lanka at several annual conferences of the Asia Pacific Public Electronic Procurement Network (APPeN), where I learned that many countries were on track to digitalise their public sector procurement activities by 2017. The digitalisation of public procurement is called ‘e-government procurement and involves an e-GP system. I provided consultation for the digitalization of public procurement activities in Nepal. They started the digitalisation of their public purchase activities in 2011 with the intention of improving and strengthening their government procurement practices. In 2017, the system was modernized and updated again.
What benefits do the countries get from such transformation, and how do those benefits link to sustainable supply chain management and achieving sustainable development goals of the country?
The benefit of such transformation is the significant cost saving. The money thus saved can be used to purchase other necessities such as health-related facilities, to improve educational services and to facilitate necessary infrastructure for the country, etc. and thereby promote economic development. The transformation also increases the transparency of transactions and accountability. Furthermore, the good governance of procurement enables effective use of public funds. As procurement-related information will be available freely and any interested party will be able to access it. This may discourage fraudulent activities and corruption relating to procurement. Another important point is that this may encourage even the SME to enter public procurement, and hence, enhance equity and equality. Many countries in which e-procurement has been introduced have been able to reduce the procurement expenditure significantly: for example, Singapore, which introduced their e-procurement system in 1999, by 2004, had reduced cost of procurement by 30 percent. Some other countries which were able to reduce their procurement costs after digitalisation are United States, Kenya, Chile and South Korea. Sustainable procurement is a part of sustainable supply chain management and sustainable development goals (SDG); digitalization enables both. As I mentioned earlier, cost savings for the government can be redirected to other projects. This leads to achieving SDG 9–industry, innovation and infrastructure. For example, e-sourcing to find suppliers and e-tendering to submit bids online reduces procurement time. This controls costs in supply chains and improves savings, while improvement in efficiency and value for money in procurement improves the supply chains overall. SGD 8 focuses on decent work and economic growth. Sustainable development involves certain labour practices that are required to be followed by the suppliers. Moreover, I would like to highlight SDG 12 and SDG 16 as well.
The final question is about what Sri Lanka needs to do to reach the level of other Asian countries which have digitalized procurement?
Sri Lanka needs to establish a procurement-related law. Moreover, the national guideline of public procurement needs to update every four to five years regularly since procurement is a dynamic process. Further, introducing a fully functional e-procurement system would solve many issues relating to procurement. However, the system should be fulfilled the needs of the public procurement activities of the country. The feasibility of such systems should be assessed before adapting them. The next requirement is creating the culture of ethical procurement. Furthermore, enhancing the officers in charge of procurement and supply chains and relevant technical officers with new knowledge relating to the field through training is required. In this instance, the universities and educational institutions have a major role to play in introducing programmes to cater to fulfill the existing gap. Several universities and educational institutions in Sri Lanka are in this direction. I am happy about the MSc in Public Procurement and Supply Chain Management which is being newly launched by the Faculty of Management Studies of the Open University of Sri Lanka.
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