Propose of Past-performance information system (PIS) for improving Indonesian public works performance

Transcription

1 Propose of Past-performance information system (PIS) for improving Indonesian public works performance Key words: best value procurement, electronic information system, past performance evaluation, procurement reform, public work Dewi Larasati ZR Watanabe Laboratory Graduate school of Engineering Kochi University of Technology

2 CONTENTS Introduction Problem Indonesian e-procurement Future needs and framework Proposal Evaluation

3 Introduction Islands : Land area : km2 Total area : km2 (exc.zee) Population : (65% in Java island) Province : 33 District : 561 (developing) 3

4 CONTENTS Introduction Background & problems Indonesia e-procurement Proposal Evaluation Future study

5 Problem Poor performance of construction project Not on time Not on budget Poor quality Undermine economic and social benefit 5

6 Can it be improved? 6

7 Cause 1: Corruption is one of key factors of poor performance 7

8 Corruption in public work expenditure 8

9 Losses in Indonesian public work investment Example of investment losses based on a case study Real infestation Project losses 9

10 Cause 2: Low capacity is a main problem in project lifecycle Bionomic Phase: Operational problem Utility problem Construction Phase: Poor of supply chain system Weakness of leadership Weakness of design document support Feasibility Study Phase: Budgeting inefficiency Short time for planning Existing Condition Performance: Construction does not meet user requirements High of life and operational costs Shorter period of life cycle Low of certainty over project costs and time High of waste in labor and materials Procurement Phase: Tend to be price base Poor of procurement evaluation mechanism Poor of risk and value assessment Design/ Engineering Phase: Poor quality of survey data Low accuracy of design Low constructability 10

11 Cause 3: Poor risk control Low capacity to bear with the public works characteristic which is high risk under uncertainty Construction Project Phase High risk under uncertainty Construction Project Category 11

12 Cause 4: Adversarial relationship exists between client and other parties NPO/ Auditor Accountability problem Contractor Contractual problem & dispute Client/ Owner User Low performance problem Parliament/ Council Designer Budgeting problem Lack of cooperation Distrust problem Limited trust Inefficient communication 12

13 Cause 5: 5 Decentralization 47% of central government expenditure was transferred to the regions at The existing system have not accommodated the needs of more than 501 local Governments (district/ city) 13

14 Cause 6: Poor guidelines and tools Multi interpretation rule Abuse of unclear procedure Insufficient evaluation method Lack of past performance information Lack of standard control achievement Insufficient qualification process Ethics and moral problem Lack of effectiveness of control and audit system Lack of any independent mechanism to handle complaints 14

15 CONTENTS Introduction Problem Indonesian e-procurement Future needs and framework Proposal Evaluation

16 National public procurement agency

17 Indonesian e-procurement system E-Tendering E-Purchasing Improving transparency and accountability; Improving market accessibility and fairness competition; Improving efficiency of procurement system; Supporting monitoring and audit system; Providing the need of real time information accessibility.

18 The existing of Indonesian electronic bidding system Public client Construction firm terminal Web programming Data base Operating system Data security : Java : Postgre SQL : Linux : Encryption 18

19 E-procurement website

20 Progress of implementation

21 Reducing time (36 days to 18 days for procurement) Reducing cost (budget efficiency 14%) 21

22 CONTENTS Introduction Problem Indonesian e-procurement Future needs and framework Proposal Evaluation

23 Problem formulation Corruption Low capacity of parties involved Poor risk control Adversarial relationship Decentralization Poor guideline and tools Colonization Political Leader Bribery Democracy euphoria (High political cost Support/ Backing Stronger position Powerless Stronger position Contractor Republic Democracy Procurement Official Low enforcement Bionomic Phase: Operational problem Utility problem Construction Phase: Poor of supply chain system Weakness of leadership Weakness of design document support Feasibility Study Phase: Budgeting inefficiency Short time for planning Existing Condition Performance: Construction does not meet user requirements High of life and operational costs Shorter period of life cycle Low of certainty over project costs and time High of waste in labor and materials Design/ Engineering Phase: Poor quality of survey data Low accuracy of design Low constructability Procurement Phase: Tend to be price base Poor of procurement evaluation mechanism Poor of risk and value assessment Contractor Contractual problem & dispute Parliament/ Council Budgeting problem NPO/ Auditor Accountability problem Client/ Owner User Low performance problem Designer Distrust problem Risk driver in procurement procedure Multi interpretation rule because of overlapping jurisdictions that contain conflicts and inconsistencies as well as creating confusion Abuse of unclear procedure Insufficient evaluation method Weakness in procurement planning Limitation in operation for collecting data Lack of standard control achievement Low capability of public client Insufficient qualification process Lack of systematic education of procurement staff Ethics and moral problem Lack of effectiveness of control and audit system Lack of any independent mechanism to handle complaints Focus of current procurement reform Focus of proposed procurement reform 23

24 Needs of project life cycle structure reconstruction for improving existing condition 24

25 The needs of project structure reconstruction 25

26 The criteria of reform Existing Structural Change New Framework Innovation New scheme in construction procurement Support by model development and tools simple simple Nontechnical Non- Sustainable Suitable 26

27 The needs of reform process Corruption Low capacity of parties involved Poor risk control Adversarial relationship Decentralization Poor guideline and tools Colonization Republic Democracy Democracy euphoria (High political cost Stronger position Political Leader Procurement Powerless Official Support/ Stronger Bribery Backing position Low enforcement Contractor Feasibility Study Phase: Budgeting inefficiency Short time for planning Design/ Engineering Phase: Existing Condition Bionomic Phase: Performance: Poor quality of Operational Construction does not meet user survey data problem requirements Low accuracy of Utility problem High of life and operational costs design Shorter period of life cycle Low Low of certainty over project constructability costs and time High of waste in labor and materials Construction Phase: Procurement Phase: Poor of supply Tend to be price chain system base Weakness of Poor of procurement leadership evaluation mechanism Weakness of design document support Poor of risk and value assessment Contractor Contractual problem & dispute Parliament/ Council Budgeting problem NPO/ Auditor Accountability problem Client/ Owner User Low performance problem Designer Distrust problem Risk driver in procurement procedure Multi interpretation rule because of overlapping jurisdictions that contain conflicts and inconsistencies as well as creating confusion Abuse of unclear procedure Insufficient evaluation method Weakness in procurement planning Limitation in operation for collecting data Lack of standard control achievement Low capability of public client Insufficient qualification process Lack of systematic education of procurement staff Ethics and moral problem Lack of effectiveness of control and audit system Lack of any independent mechanism to handle complaints THE NEEDS OF REFORM Theoretical needs Practical needs 27

28 Focus of reform Corruption Low capacity of parties involved Poor risk control Adversarial relationship Decentralization Poor guideline and tools Colonization Political Leader Bribery Democracy euphoria (High political cost Support/ Backing Stronger position Powerless Stronger position Contractor Republic Democracy Procurement Official Low enforcement Feasibility Study Phase: Budgeting inefficiency Short time for planning Design/ Engineering Phase: Existing Condition Bionomic Phase: Performance: Poor quality of Operational Construction does not meet user survey data problem requirements Low accuracy of Utility problem High of life and operational costs design Shorter period of life cycle Low Low of certainty over project constructability costs and time High of waste in labor and materials Construction Phase: Procurement Phase: Poor of supply Tend to be price chain system base Weakness of Poor of procurement leadership evaluation mechanism Weakness of design document support Poor of risk and value assessment Contractor Contractual problem & dispute Parliament/ Council Budgeting problem NPO/ Auditor Accountability problem Client/ Owner User Low performance problem Designer Distrust problem Risk driver in procurement procedure Multi interpretation rule because of overlapping jurisdictions that contain conflicts and inconsistencies as well as creating confusion Abuse of unclear procedure Insufficient evaluation method Weakness in procurement planning Limitation in operation for collecting data Lack of standard control achievement Low capability of public client Insufficient qualification process Lack of systematic education of procurement staff Ethics and moral problem Lack of effectiveness of control and audit system Lack of any independent mechanism to handle complaints THE NEEDS OF REFORM Focus of reform in project lifecycle Project life cycle Pre construction Under construction FS/ Planning Detail design Procurement Construction Bionomic Demolition 28

29 1. Inter-related 2. Inter-section High Supply Provide Preliminary design Detail design Procurement Cumulative cost Procurement Requirement Low Start date Time Construction Ability to influence cost End date 5. Core of public works activity Why focus in procurement? 3. Multi-party The stakeholders User Politician Public client NGO Contractor Designer 4. In the middle of project lifecycle/ DESIGN PROCUREMENT FS D/E P C B SUPPLY CONSTRUCT 29

30 30

31 CONTENTS Introduction Problem Indonesian e-procurement Future needs and framework Proposal Evaluation

32 The theoretical approaches Best value procurement Approach Reputationbased Approach Developing past performance information system for Indonesia public work procurement Communitybased approach Comprehensive evaluation method Approach 32

33 Open reputation record information system Encouraging capacity and capability enhancement Approach 1: Reputation approach Public availability in accessing reputation information system Related actors Ensure collective action in delivering socially desirable result Motivation in building and maintaining good reputation Building trust Open reputation evaluation system Encouraging integrity Trust can be raised if the parties involved have good reputation in conducting their task Encouraging good reputation due to improve the capacity of involved parties A balanced mechanism between the reputation system and society sanction system 33

34 Paradigm change Approach 2: Best value procurement 34

35 Best value procurement approach 35

36 Approach 3: Community based approach Multi party involvement 36

37 Approach 4: Comprehensive past performance evaluation User & contractor satisfaction of procurement procedure and administrative issues Policy & procedure performance Process & product performance User/ client Satisfaction of product Dimension of past performance evaluation system Defect User/ client Satisfaction of service Safety control performance Timeliness of performance Cost control performance 37

38 Proposed past performance information system 38

39 Proposed framework of past performance information system The system eliminates the negative consequence of fierce competition by ensuring that contractor bid according to their real capabilities, thus reducing the amount of low quality works The system confirms technical capabilities of tendering company in improving the performance of public works The system enables the stakeholders to search past performance information records of engineer This system enables the stakeholders to evaluate the professionalism of public client in conducting public work procurement 39

40 Proposed Integrated project information system 40

41 Proposed Integrated e procurement system 1. Two way evaluation system which is related to comprehensive dimension of evaluation such as policy and procedure in public client side, and product and service evaluation in construction firm side. 2. Involved all stakeholders who are public client, contractor firm, consultant firm, engineer, NGO, construction firms association, user, local and national government. 3. Sustainable system that can evaluate past performance in a long time, since the quality of a public works product becomes fully known after its delivery has taken place and sometimes after its prolonged use. 4. Dynamic system that automatically can analyze and update data based on the last or recent information. 41

42 Data exchange in proposed integrated e procurement system 42

43 CONTENT Introduction Problem Indonesian e-procurement Future needs and framework Proposal Evaluation

44 Evaluation 1: The differences between existing and proposed past performance evaluation system 44

45 Evaluation 2: Survey of the importance of proposed project past information system 45

46 The needs of Past performance information 46

47 The needs of disclosure of project information 47

48 Problem and consideration in developing project information system 48

49 Publi c client Construct ion firm terminal 49

50 Thank you very much 50