SCHOOL OF CIVIL ENGINEERING

Internship Report
On

E-PROCUREMENT AND TENDERING PEOCESS

Submitted by
M V Sai kumar Reddy
R18MTE07

OCTOBER- 2019

Rukmini Knowledge park, Kattigenahalli, Yelahanka, Bengaluru-560064

www.reva.edu.in
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TABLE OF CONTENTS

 INTRODUCTION

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1. INTRODUCTION

E-PROCUREMENT
e-Procurement is the procurement of works, goods and services where procedures from initial
estimation of qualities till finalization of work order are done online. Karnataka is one of the few
states in India which have implemented e-Procurement successfully. e-Procurement has been
implemented in Karnataka since 2007 in stages. It is based on PPP model with private contractor,
Hewlett Packard (HP). The revenue sharing model is 95% to HP and 5% to GoK out of tender
processing and supplier registration and renewal fees. The e-Procurement system supports
national and international biding wherein suppliers/contractors can bid from any corner of the
world. As per RFP floated for section of Private Partner was completed only in December 2006.
The project was formally formally launced by His Excellency, the Governer of Karnataka 2007.
The first live transaction of e-Procurement happened in December 2007.

The main objectives of e-Procurement Project are:

 To create infrastructure for effective implementation of procurement policies.
 To enhance transparency and accountability of government working.
 To promote competitive market-driven bidding.
 To enable ease of access to contractor community.
 To provide a common environment for all types of tenders.
 To handle entire procurement process(end-to-end) in an online environment.
 To involve less paper, thereby, adopting green working.

GoK e-Procurement initiative has been well appreciated by many agencies such as Ministry of
Information Technology, Government of India, World bank, etc.,

Organisation Set-up
e-Procurement cell has been set up in Bangalore under the Department of e-Governance. Project
Director, e-Procurement is heading this cell. He assisted by Programme Officer and Technical
Director, e-Procurement. The support staff e-Procurement cell has been outsourced, Key officials
from impoertant departments such as PWD, Minor Irrigation, etc., are appointed in this cell.

e-Procurement System Architecture

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Figure: Government of Karnataka’s e-Procurement Project Portal

Source: Government of Karnataka’s e-Procurement website (www.eproc.karnataka.gov.in)

Types of Tenders

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Source: Government of Karnataka’s e-Procurement website (www.eproc.karnataka.gov.in)

Revenue Generation through Charges

The e-Procurement system is implemented through a Public Private Partnership (PPP) on Build-
Operate-Transfer (BOT) model with no initial cost to the Government. The Private Partner
designed, developed, deployed and maintains the solution for a period of 5 years. The revenue to
the Private Partner (HP) is based on transactions depending on the usage of supplier registration,
e-tendering and contract management / catalogue management modulus by suppliers /
contractors. A nominal fee is charged from suppliers / contractors during registration, bid
submission and finalization of work order / purchase order, which is shared between Private
Partner and Centre for e-Governance on a pre-determined revenue sharing (95% to private
partner, 5% to Government).

Source: Government of Karnataka’s e-Procurement website (www.eproc.karnataka.gov.in)

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Following fees are charged to vendors during the tendering process:

Cost of Registration of Vendors:

 Digital Signature Certificate: Rs.3500/-
 Vendor Registration Fee: Rs.500/-
 Renewal Fee : Rs.100/- year
Tender Processing Fees: Rs.550 to 7500/- depending on the value of tender.
Contract Management Fee(Works): Rs.550-7500/- depending on the value of contract.
Catalogue Management Fee (Goods and Services)
The following table shows Catalogue Management Fee Structure for different tender values.

e-Payment Options for Suppliers:

NEFT/RTGS
 Electronic transfer from any Nationalized Bank using RBI system.

Over The Counter (OTC)

 Cash or DD at designated branches of principal bank.

Credit Card
 Online payment using any Visa or MasterCard.

Direct Debit
 Online Direct debit from A/c in designated bank.

Deferred Payment
 Supplier takes challan from e-procurement system– makes payment, comes back and
enters Unique Transaction Reference No. in e-procurement system.
 e-Procurement system matches supplier inputs with scroll received from bank and
confirms matching payments.
 Partial match cases verified by matched by accounts officer, e-procurement cell
 Once matched system sends confirmation to supplier.
 Payments could take up to 2 days for matching –Mandatory 2 day latency between bid
closing and opening as decided by Steering Committee.

Real Time Payment

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 Online instant confirmation.

 Automatic matching & verification by e-procurement system.

E-Procurement System Support

 Training: Ongoing training for Govt. users and contractors

− Dedicated training infrastructure
− Train the Trainer done in many locations

 Rollout Support
− Handholding support for Govt. departments that come onboard for one year

 Help Desk: Kannada and English

− Phone: 080 25501216 /25501227
− Available Monday to Saturday (9 a.m. to 9 p.m.)
− EMAIL:- hphelpdesk.blr@intarvo.com

E-Procurement Login

Source: Government of Karnataka’s e-Procurement website (www.eproc.karnataka.gov.in)

E-Procurement Sub-Systems and Modules

i) Supplier Registration: This module handles centralized registration of suppliers/contractors.

ii) Indent Management: This module facilitates internal preparation work for estimates/indents.

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iii) e-Tendering: This module handles the upload of bid documents by bidders, encryption /
decryption of bids, opening of tenders, evaluation, negotiation bidders and completion of
financial evaluation.

iv) Contract Management: Involves issue of Letter of Intent (LoI), work order, defining
milestones and activities, measurement book, generation of bills, verification and measurement
reports and quality reports, approval of bills and payment to contractors.

v) Catalogue Management: The module involves maintenance of a database of goods and

equipment procured by the government agencies.

vi) e-Auction: The module enables suppliers/contractors to submit quotes in a ‘virtual auction
environment’ based on the bids of other bidders.

vii) e-Payments: This module handles the online transfer of funds (inflow and outflow) through
credit card or using internet banking systems.

viii) MIS: MIS sub-system enables departments to generate management reports.

ix) Accounting: The module maintains a statement of inflow and outflow of payments on
various fees collected from suppliers/contractors, tender payments, auction payments and refund
of Earnest Money Deposit (EMD).

Source: GoK’s Bid document for the e-Procurement System, GoK

New Tenders Searching Window

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Source: Government of Karnataka’s e-Procurement website (www.eproc.karnataka.gov.in)

Searching Owned Tenders

Source: Government of Karnataka’s e-Procurement website (www.eproc.karnataka.gov.in)

Flowchart: Works Tender Creation & Publishing

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Source: Government of Karnataka’s e-Procurement website (www.eproc.karnataka.gov.in)

Flowchart: Pre-Qualification Process

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Source: Government of Karnataka’s e-Procurement website (www.eproc.karnataka.gov.in)

Flowchart: E-Auction Process

Source: Government of Karnataka’s e-Procurement website (www.eproc.karnataka.gov.in)

Flowchart: Tender Evaluation Process

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Growth and Innovations

Growth in the number of users and transactions is the primary objective where the private partner
has to recover the project costs and his profits from transaction-based fees. In traditional
procurement approach, the capital and operational costs are incurred through budget resources,
and there is no pressure or incentive for the IT supplier to push for growth. Similarly, the GoK
Project Team may have their growth targets but their funding is not dependent on the growth
achieved in terms of number of departments, users or transactions. A PPP approach, will
therefore by design promote growth and thereby higher level of adoption and mainstreaming of
the new e-governance systems. It was clear that the private partner had to modify and upgrade
the systems for each department to meet their requirements, provide extensive training, and
handholding support.

In a traditional approach, the private partner would have received his payments on delivery and
installation and would have little role in promoting the growth and adoption of the systems. In
this case, every new transaction results in increased revenue for the private partner. The number
of departments grew from initial 7, to 19, to 31 and the number of suppliers increased from
initial 130 to over 4,800 in the first three years. Figure 2 shows the growth in the number of
suppliers and government users.

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In the GoK e-Procurement Project, the private partner used ‘virtualization’ for added flexibility,
ease of use, and scalability to the e-procurement solution in addition to containing costs. The
traditional design would have required at least four times the cost of the present systems and at
least 70 servers to get the same performance. The innovative project design used eight servers in
all, resulting in huge cost savings.

Constraints
1. Constraints for not using e-Procurement

 Food and Civil supplies department was planning to introduce e-Procurement since 2010.
But due to pressure from various stakeholders, particularly transporters the
implementation was derailed.
 Transporters are apprehensive about the security mechanism in e-Procurement platform.
Transporters are of opinion that with this system, their bids will be seen by other co-
bidders.
 Lack of strong decision making level will-power is a major constraint in the department.
 Department of public instruction is not into major constraint in this department.
2. Constraints during Actual Implementation
 Ease of use: When a submitted tender document has more attachments and two
attachments arc to be compared, each attachment is to be opened separately. No provision
has been made to view two documents simultaneously for comparison.
 Reliability: Officers found the system to be unreliable. Server breakdown happens
several times. Especially during eleventh hour, if server is down then officers find it
difficult to handle the work. In such cases the work gets delayed.
 Capacity Building: In family Welfare Dept. only 1 or 2 officers are trained for e-
procurement system and are well versed with e-procurement system. These officers only
have digital signatures certificates, if these officers are on leave or gone out for official
work then work gets affected.
 Efficiency: Even after introduction of e-Procurement hard files are maintained for each
work.(This is done to keep back up of documents in case of system failure). After getting
approval on paper, concerned officer makes the entry into the e-Procurement system.
Officers and Clerks found it cumbersome and repetitive. Due to this e-Procurement is not
adding value in reducing cycle time as desired.
Example for e-Procurement Tender:

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DEPT: KARNATAKA CO-OPERATIVE MILK PRODUCER’S FEDERATION

LIMITED

NAME OF PROJECT:
CONSTRUCTION OF STAFF QUARTRES BUILDING AT CFP PREMISES GUBBI,
TUMKUR DISTRICT.

DATE OF DOWNLOADING OF TENDER : 28/01/2019 TO 01/03/2019 UPTO 4 PM

DOCUMENTS

LAST DATE AND TIME FOR RECEIPT OF : 01/03/2019 UPTO 4 PM

TENDERS

TIME AND DATE OF OPENING OF : 05/03/2019 AT 11.30 AM

COVER ONE OF TECHNICAL TENDER

TIME AND DATE OF OPENING OF : 08/03/2019 AT 11.30AM

COVER TWO OF COMMERCIAL TENDER

PLACE OF OPENING OF TENDERS : KMF Central Office

ADDRESS FOR COMMUNICATION Karnataka Milk Federation Ltd,

Dr.M.H.Marigowda Road DRC Post, B'lore -560 029

CHECK LIST - Following listed documents have to be furnished to claim the eligibility.

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NAME OF PROJECT: CONSTRUCTION OF STAFF QUARTRES

BUILDING AT CFP PREMISES GUBBI,TUMKUR DISTRICT.
IFT IFT NO KMF/ENGG/CFP-G/QTRS/00692/2018-19, dt:25/01/2018

To qualify for award of this contract, each tenderer in its name should have in the last five years. 20013-14
to 2017-18 the following criteria
Status
SL No Particulars

1. Prescribed EMD shall be submitted through e-procurement only

through following modes :

a)Credit Card,

b)Debit Card

c)NEFT (National Electronic, Fund Transfer) &

d)OTC (Over the Counter) - ICICI BANK

2 Registration certificate PWD/CPWD/MES of (Class 1 & above) DOCUMENT TO BE

shall be attached ATTACHED

3. Details of tenderers Bio-data DETAILS TO BE

ATTACHED

4 Work done certificate (As per Eligibility criteria of technical DOCUMENT TO BE

tender bid Document : refer page no-6 to 7) ATTACHED

5 Documents in respect of Achieved in at least two financial DOCUMENT TO BE

years a minimum financial turnover (As per Eligibility criteria ATTACHED
of technical tender bid document : refer page no-6 to 7)

6 Documents in respect of credit lines /letter of credit/certificate DOCUMENT TO BE

from banks.(As per Eligibility criteria of technical tender bid ATTACHED
document : refer page no-6 to 7 )

7 GST, PAN & other statutory registration certificates to be DOCUMENTS TO BE

Attached ATTACHED

SIGNATURE OF THE TENDERER

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