E-Procurement Linkage System Operations 2013 4 Public Procurement

E-Procurement Linkage System Operations 2013. 4. Public Procurement Service

PPS and KONEPS Linkage Current Status of Linkages Linkage Suggestions Mechanics Related to Linkage

PPS and KONEPS Linkage

1. PPS and KONEPS Linkage PPS is the central procurement agency of Korean government providing goods, services and public works Contract Service Construction Service Stockpile Mgmt. for Property Mgmt. for Goods 3

1. PPS and KONEPS Linkage Total Procurement 35% of Total Korea’s public procurement market (101 billion USD) As of 2012 PPS (35 billon USD) 4

1. PPS and KONEPS Linkage PPS (35 billion USD) As of 2012 20% open to international companies Market opening (7 billion USD) 5

1. PPS and KONEPS Linkage 6% of Total Foreign suppliers Market Opening Volume (403 million USD) As of 2012 Market opening (7 billion USD) 6

1. PPS and KONEPS Linkage Major Milestones • • • 2002: 2003: 2007: 2009: 2013: Overseas Cases Launched System upgrade Expands standard linkage Introduces mobile bidding Next-generation KONEPS • • 2008: 2009: 2010: 2012: Vietnam Costa Rica Mongolia Tunisia Mongolia Uzbekistan Launched Tunisia Vietnam Indonesia Being Ready Costa Rica Peru 7

1. PPS and KONEPS Linkage Single Window Process Standardization One-stop Service 8

1. PPS and KONEPS Linkage Certificate Authorities Other Bidding Systems PG System (KFTC) Related Associations Certificate Authorities Authentication Certificate Integrated Notice Commission for Bid Participation Supplier Data Authentication Certificate Supplier Registration Invitation For Bidding Bid Opening /Evaluation Contracting Financial and Accounting Systems Contract information Delivery/ Inspection/ Acceptance G 4 C System Certificate for Tax Payment Supplier Registration Integrated Notice Bid Bond Encryption Time Stamp Contract / Performance/ Payment Bond Electronic Fund Transfer G 4 C System Public Org Surely Company Encryption Key Issuance System Surely Company Financial and Accounting Systems Online Transaction Banks All processes are digitalized from supplier registration to payment One-stop service is provided by using the linkage with 144 external systems 9

Current Status of Linkages

2. Current Status of Linkages The KONEPS can guarantee the precision of e-procurement transactions and seamless processing through linkages Info linkage Procurement task processing support Feature linkage • Supplier credit info • Public authentication • Past performance • Electronic settlement • Bond/ guarantees • Electronic payment • Tax info • Product certification info • Purchase request info • Bidding info • Quality Certification info • Contract info • Product info • Supplier registration info • Catalog info Procurement info linkage Procurement info sharing 11 Basic info linkage

2. Current Status of Linkages 2. 1 Procurement Processing Support: e-Bidding(1/2) KONEPS XML-SOAP Credit Rating Agencies Product Quality Certificate Authorities Credit Rating Credit Info License, Human resource License Info. Public Org Bid Submission Credit level, Certificate Info etc. DB Associations by Industry Administrative measure, Unjust supplier Info Eligibility Test Certificate Info Linkage Human resource Info Registration Preperformed result Adminis trative measure 12

2. Current Status of Linkages 2. 1 Procurement Processing Support: e-Bidding(2/2) 115 types of information gathered from 60 organizations in four groups are linked for the purpose of providing bidding information Linkage Type Linked Entities Linked Info Credit Rating Agencies 10 6 types Product Quality Certificate Organization 10 9 Associations by Industry Other Public Entities Comment Credit info, debt info, etc. New Excellent Technology, Patent, KS Mark, etc. 10 90 11 29 13 Financial info, projects undertaken, key technical personnel, etc. Info on administrative measures, unpaid taxes, temporary or permanent closure, etc.

2. Current Status of Linkages 2. 2 Procurement Processing Support: e-Contract, e-Payment (1/2) Make sure all conditions have been satisfied before signing the contract so that everything can be done with high confidence and precision KONEPS Commercial banks Bond Network purchases loans Guarantee Company Contract Payment deposits Financial & Accounting System NTS/ MOSPA KFTC Guarantees, bonds, stamp taxes, network loans Contract signing Linkage Stamp Tax tax Tax payment invoices payment certificate info Local finance DB Accounts, tax payments, guarantees Bank account info National finance Payment Educational finance Other finances 14

2. Current Status of Linkages 2. 2 Procurement Processing Support: e-Contract, e-Payment(2/2) Linking 385 types of information in 38 organization in four groups for information linkage in contracts and payments Linkage Type Linked Entities Linked Info Commercial Bank 17 13 types Surety Company 19 18 Seoul Guarantee Insurance Co. , etc. Public agency 2 5 National tax-related info Financial Accounting System 3 74 15 Comment Kookmin Bank, etc. National finance-related info

2. Current Status of Linkages 2. 3 Procurement Processing Support – Related Feature Linkage (1/2) In the case of shared services that can be used for general purpose, more effective, reliable service execution is possible through professional services KONEPS Security Authentication Performs security authentication on log-in & sent/received documents Public authentication module Authentication info Public authentication Electronic Approval Performs electronic approval when processing approval in stages Electronic approval module Approval info Public Institutions Electronic Payment Performs electronic payment when making payments PG module Payment info KFTC 16

2. Current Status of Linkages 2. 3 Procurement Processing Support - Related Feature Linkage (2/2) By using link modules provided by each institution, service linkage is made in real time whenever needed Purpose Comment Linked Entities Linked Info Public Authentication Public authentication certificate management; electronic signatureprocessing Public authentication organization CA/RA/TSA systems 6 including Korea Info Certificate Authority Electronic Approval E-approval institution management; e-approved document processing MOSPA “On-Nara” System National institution standards Electronic Payment account management; payment transfer processing KFTC e-Payment System Limited linkage 17

2. Current Status of Linkages 2 -4. Sharing of Procurement Information (1/2) Basic procurement information is collected from public entities and the comprehensive information gathered can be shared widely among users of the KONEPS Public Entities National Finance System KONEPS Contract Request Procurement Request Linked system Bidding Notice+ Bid opening Public Entities Request Status+ Contract Status Private Suppliers Supplier status+ Supplier performance Associations by Industry E-bidding Self-bidding System Selfcontract E-contract Inspection/ supervision Public Entity System Bidding Notice Payment 18

2. Current Status of Linkages 2 -4. Sharing of Procurement Information (2/2) The shared information provided by the KONEPS is in XML and data formats; this is then reprocessed into other usable formats for linked systems KONEPS Product Certification Authorities NEP/NET Certification Info Linked system Screening system to test contract fulfillment abilities Public Entities Good Software Recycled Produce Patent Catalog Info Product Info Catalog System Shopping Mall System 3 Finance Systems Utility Model KS Mark …… 19 Associations by Industry

Linkage Mechanics

3. Linkage Mechanics Other Bidding System Document Send/Receive Type 20 Info dit Cre et, he n s ent, io lat em t lcu stat hee a x c ng r s Ta Billi rde O Quality Certified Info Standard Linkage System Catalog Info Supplier 26 Product Quality Certificate Authorities 10 gu ar an tee Only the information requested by an entity is provided in XML format in real time d, 19 Bi Co o Inf Certified Info ct a ntr Contract Info Surety Company Pre-performed result Document relay is mediated through KONEPS between procurement info company and supplier 9 r , ct de ra n. nt te fo Co tion g In a lo vit ta In Ca 28 Bid, Contract Info Government/ Public Org Inquiry Service Type Relay Type Registration Info Using the standard linkage solution of KONEPS, procurement information is sent and received in real time or in batches in document format Credit Certificate Authorities Bank 15 Certificate Authorities Related Associations 12 21 de Hou ve sin l g ne opm bo tw en nd ork t b , Lo ond an , 4

3. Linkage Mechanics KONEPS has the structure of sending and receiving linked information through web service Web Service Architecture of PPS Service Web Service Info Related to e-Procurement Bin d Linked Institution System Pu Web Service Architecture nd Bi bl is h Pu bl is h Provider Service Broker Service Find Requester G 2 B Registry eb. RIM/eb. RS Service Find Institutional System ASP-using Institutions UDDI Requester Repository 22 Info-using Institutions

3. Linkage Mechanics KONEPS provides the API solution for standardize linkage based on web service REMOTE SYSTEM Interface system Messaging system call Schema validation check module Header processing module Security processing module Logging module 호출 Webservice system Document transfer Communication processing Monitoring module APP execute module KONEPS CONNECTION SYSTEM Schema validation check Header processing Packaging Security processing Header processing Packaging module Security DBto. XML User check Error log module XMLto. DB Schema validation check Logging module (file) ’ 호출 감시 Error log module Service log Document receiving Error handling Logging module (file) Communication processing Error handling Packaging module Header processing module Security processing module Logging file directory User check module Webservice log Schema validation check module APP execute module Service link processing Service binding Receivin XML storage XML Doc creation XML Doc store XML Integrated contract Info Sending XML storage Supplier Info Remote individual system 23 Services

Suggestions Related to Linkage

4. Suggestions Related to Linkage 4 -1. Matters to Note Maintaining intimate partnership system with linked institutions Use of single standard under common protocol • Partnership terms must be explicitly specified through set of rules or MOU • In particular, credit info and supplier performance must be updated with latest data • For PPS, maintain partnership through national contract law and MOU • To maintain a huge amount of info in a consistent manner, it is critical to follow standards • This is more important for info used by many institutions • For PPS, linkage is maintained through compliance of standards like XML and SOAP Strict insistence on security guarantee appropriate for different sets of information • Depending on type of linked info, security guarantee must be made in varying degrees • In particular, containing personal info or sensitive corporate info calls for special attention • For PPS, public authentication-based encryption and electronic signature be used 25

4. Suggestions Related to Linkage 4 -2. Way Forward Expansion of international procurement information Standardization of international procurement process and info items • By linking bidding notices of many countries, one can raise opportunity of participating high-quality suppliers • Can improve reliability of bidding info through the use of trustful eligibility info • To encourage international procurement, standardization of international procurement process and information items is called for • After standardizing the basic process and info items, the same can be applied to individual processes and info items Use of common e-procurement system for international transactions • Overlapping procurement tasks, use of a common system may be possible • Using a common system can guarantee high reliability and improved efficiency 26

4. Suggestions Related to Linkage If there is a system which owns valuable information for procurement Just Link If there is no system and information go by the wayside manually Provide Service and Acquire Information 27

Jin Sung Jung jsjung@korea. kr