Electronic Procurement. Implementation Strategy July 2001

Transcription

1

2 Electronic Procurement Implementation Strategy July 2001

3 NSW Government Electronic Procurement Implementation Strategy July 2001 DPWS Report number NSW Department of Public Works and Services Cataloguing-in-Publication data New South Wales. Department of Public Works and Services. NSW Government Electronic Procurement Implementation Strategy The electronic version is available from ISBN X ISBN (electronic version) 1. Contracting out -- Government policy -- New South Wales. 2. Electronic commerce -- Government policy -- New South Wales. 3. Government purchasing -- Government policy -- New South Wales 4. Letting of contracts Government policy -- New South Wales. 5. Public contracts -- Government policy -- New South Wales. I. Title (DDC 21) This paper was produced by the Department of Public Works and Services. Copyright in this material is vested in the Crown in the State of New South Wales, subject to the Copyright Act This material may be reproduced without formal permission or charge for personal, in-house or noncommercial use. Applications for permission to use this material for other purposes should be addressed to: Director Policy Services Division Department of Public Works and Services Level 23 McKell Building 2 24 Rawson Place Sydney NSW 2000 phone (02) fax (02) e-procurement@dpws.nsw.gov.au website Cover and artwork by the Shape of Things to Come p/l Cover printed on 100% oxygen-bleached (totally chlorine free) paper. Paper for the inside pages is 70% recycled and Australian-made. Printed using vegetable-based mineral-oil-free inks.

4 Foreword Better services for the community and greater value for money underpins the Government s commitment to Electronic Commerce and E-Government. The NSW Government Electronic Procurement Implementation Strategy is the framework by which we will take New South Wales to the forefront of E- Government in Australia. The Strategy builds on our existing policies, including the NSW Government Procurement Policy and Construct New South Wales. Developments in Electronic Service Delivery have already shown that real savings in the cost of providing services by Government can be achieved. This is evident in the early work undertaken by the Department of Public Works and Services with Electronic Tendering. Trials of E-Tendering have achieved substantial savings in time and money in the processing of Tender responses lodged over the Internet. By implementing this whole-of-government framework, we will be delivering a consistent and comprehensive approach to Electronic Procurement that builds on our commitment to E-Government. This approach is vital for Government Agencies and their suppliers alike. It will ensure that NSW sets the direction for Electronic Service Delivery in Australia. The Electronic Marketplace, Project Web, Electronic Tendering and the Government Business Entry Point will combine to offer a suite of Electronic Services that generate significant savings across Government. With greater efficiencies, the NSW Government can continue to deliver even better services to the community. The challenge for Government and industry is to embrace the opportunities now available. The NSW Government Electronic Procurement Implementation Strategy is the policy by which we can achieve this. The Hon. Morris Iemma MP Minister for Public Works and Services E-Procurement Implementation Strategy 1

5 This page is intentionally blank 2 NSW Government White Paper

6 Contents Foreword Preamble Introduction NSW Government E-Procurement philosophy and approach E-Procurement Implementation Strategy... 9 NSW Government Leading the Way Strategy The NSW Government will ensure the legislative and regulatory framework fosters confidence in the take up of electronic procurement Strategy NSW Government agencies will re-engineer their procurement processes to optimise the use of electronic commerce and other innovative technologies Strategy To help ensure rapid adoption of electronic procurement by agencies and Local Government, the NSW Government will build on the innovative ideas, expertise and applications of its agencies and other jurisdictions Doing Business with Government Strategy The NSW Government will establish a Business Entry Point through the NSW Government web site to enable service providers to seek information on NSW Government business opportunities Strategy The NSW Government will implement an electronic tendering system to provide better access and greater opportunities for Government agencies and enterprises to do business. 16 Strategy The NSW Government will develop an electronic marketplace for the procurement of goods and services Strategy NSW Government agencies will develop online construction project procurement and delivery management system capability Working with Government Strategy The NSW Government will encourage service providers in the development of their e-procurement capability to match the Government s implementation of e-procurement for both goods and services and construction Strategy The NSW Government will look to industry and business associations to take a lead role in promoting and facilitating the take up of electronic procurement amongst their members and industry generally E-Procurement Implementation Strategy 3

7 Encouragement and Support Strategy The NSW Government will develop communication and assistance programs, for agencies and service providers in the take up of information technology and use of e-procurement. 24 Strategy The NSW Government will offer incentives to service providers to facilitate their take up of e-procurement initiatives Opportunities for regional and small business Strategy The NSW Government e-procurement strategies will enhance opportunities for small to medium enterprises and regional businesses Performance Monitoring and Reporting Strategy NSW Government agencies will report on the progress and results of their e-procurement implementation Strategy The NSW Government will monitor the progress and benchmark the results of its e- procurement implementation strategy Sources of assistance on Business Information Glossary of Terms References Appendix A Implementation Scenario in Construction Procurement NSW Government White Paper

8 1. Preamble The emergence of the Internet has revolutionised business access to communication and information. International projections about the amount of business conducted electronically have reached hundreds of billions of dollars. Electronic Commerce in Australia is predicted to grow to A$1.3 billion by the end of 2001 and A$4 billion by the end of 2002, increasing significantly throughout the decade to The IMF World Economic Outlook in September 2000 reported that, of all advanced economies, Australia, after Sweden, has the second highest level of expenditure as a proportion of GDP, on information and communication technologies. In addition, Australia was recently ranked second only to the USA for e-readiness in the Economist Intelligence Unit/Pyramid Research e-readiness rankings. Electronic procurement is a business tool and enabler that allows businesses to remove inefficiencies from their processes and build better-integrated supply chains. It introduces exciting new ways for organisations to communicate internally and externally, conduct business transactions and manage supply chains and alliances. The cost of procurement transactions can be reduced by automating the processes and so reduce administrative tasks, such as manually copying information from one system to another, and the effort to correct errors. Maximum benefit accrues when the affected business processes are reformed to meet the business needs of an organisation and to exploit the potential of technology. The business outcomes from the application of information technology, trading communities, hubs and marketplaces are improved efficiency, stronger relationships, enhanced business opportunities, and new forms of service delivery. A November 1999 European report issued by technology research company IDC found that electronic procurement has the potential to make a big difference for government purchasing and allows government to obtain more for their budgets. For business, the advantages of e-commerce lies not only in improving its internal process efficiency and supply chain management but also its access to new or remote markets. Improved communications and access to information opens up opportunities for small to medium and regional enterprises. To realise these benefits, the NSW Government, through the actions in this implementation strategy, is leading the take up of electronic procurement by government agencies, service providers to government and industry generally. E-Procurement Implementation Strategy 5

9 2. Introduction The NSW Government Procurement Policy, released in December 1998, identified procurement as a major area from which productivity gains and efficiencies can be realised. These gains and efficiencies are expected from: better value for money outcomes for Government reducing cost of doing business, by automating and streamlining the procurement process from sourcing, ordering, payment and contract management more efficient purchasing within agencies greater leveraging of purchasing power better understanding of purchasing trends though statistics collection increased ability to assist industry to better meet Government procurement needs greater access for small and regional businesses. The NSW Government Electronic Procurement Implementation Strategy supports the strategies outlined in the procurement policy advancing the take up of electronic commerce in procurement. It will make it easier to do business with the Government and for agencies to re-engineer their procurement processes. The Implementation Strategy also delivers on actions in Construct New South Wales, released in July 1998, which support the take up of information technologies across the construction industry and therefore realise significant productivity gains for both government clients and the private sector generally. This NSW Government Electronic Procurement Implementation Strategy was finalised after extensive consultation on the discussion paper Electronic procurement taking up the challenge, released in December 1999 and the discussion paper Information technology in construction making IT happen, released in April The Implementation Strategy sets out the goals and targets for electronic procurement by the NSW Government, its agencies and service providers wishing to do business with government. The Government will to the greatest extent possible move its procurement online, and in doing so encourage its service providers to adopt corresponding electronic business practices. For government agencies this means making government business opportunities information available online to service providers. Government tendering will be conducted through the Internet and incorporate functionality for real time dynamic pricing and project management. Invoicing and payments will also be conducted electronically. Ideally, the whole procurement process would be integrated with the agency s financial management system. This will enable reports, statistics and analysis of the agency s purchasing patterns to be produced. Service providers will seek information for government business online, submit tenders, maintain and communicate information on their goods and services via the internet, receive orders, and correspondingly invoice buyers and receive payments electronically. The Department of Public Works and Services (DPWS) is responsible for coordinating this e-procurement implementation strategy, with support from the Department of Information Technology and Management (DITM) and the Department of State and Regional Development (DSRD). The Department of Information Technology and Management is responsible for information technology policy and strategy, its coordination and technical advice. 6 NSW Government White Paper

10 3. NSW Government E-Procurement philosophy and approach The NSW Government Procurement Policy, and in turn this strategy is underpinned by 4 key principles: value for money, covering price as well as developing local industry and social and environmental responsibilities efficiency and effectiveness probity and equity effective competition. The NSW Government Electronic Procurement Implementation Strategy recognises that: government agencies will make their business decisions on e-procurement within this whole-of-government implementation strategy adopting a consistent and co-ordinated whole of government approach to implementing electronic procurement across NSW Government agencies will allow industry to proceed with confidence in dealing with government service providers to government will base their business decisions on e-procurement on their IT and electronic capability and opportunities to transact business electronically the take up of electronic commerce and e-procurement will contribute to the continuing economic development of NSW and NSW industries. This Implementation Strategy is consistent with Connect.NSW, the NSW Government s strategic framework which outlines the use of information technology to streamline internal government practices, reduce costs, improve service delivery and generally enhance the quality of life for the NSW community. Connect.NSW outlines four strategies that: integrates Government by establishing infrastructure for delivering government services and for sharing information within and amongst all tiers of government encourages NSW Government agencies to deliver customer focused services through the use of electronic technologies accelerate the take up of electronic commerce to support NSW economic development by networking within and across communities to enhance the quality of life for these communities. The NSW Strategy is consistent with the Australian Procurement and Construction Council's (APCC) Government Framework for National Cooperation on Electronic Procurement. The APCC Framework: establishes a cooperative approach for the Commonwealth, States and Territories in their development and implementation of electronic procurement systems calls for the adoption of open systems and solutions for electronic trading which foster the creation of an environment where businesses are not locked into proprietary systems or particular hardware and software encourages interoperability between the systems of multiple e-commerce providers and eliminates the need for buyers and suppliers to adopt multiple solutions E-Procurement Implementation Strategy 7

11 recognises that electronic procurement needs to support government procurement policies and should not determine operational practices. Various jurisdictions across Australia, including NSW, are cooperating in implementing electronic tendering, electronic marketplaces and supplier registries. A national government web site is being investigated which will allow suppliers to locate business opportunities for locations and categories of work across Australia and New Zealand. Potential tenderers would be directed to the web site of the agency calling tenders once a particular opportunity is located. 8 NSW Government White Paper

12 4. E-Procurement Implementation Strategy This NSW Government Electronic Procurement Implementation Strategy: sets directions for ensuring regulatory and administrative mechanisms to facilitate the take up of electronic procurement sets achievable e-procurement goals for Government, its agencies and service providers wishing to do business with government provides leadership and encouragement as well as support for small to medium enterprises and regional businesses outlines incentives the Government will offer to progress the take up of electronic procurement outlines monitoring processes and mechanisms to benchmark performance. The figure below illustrates the NSW Government e-procurement scenario, including the interaction between the various stakeholders: AGENCY AGENCY AGENCY Strategies 2, 3, 13 and 14 NSW GOVERNMENT E-PROCUREMENT Agency specific business entry site Legislative & regulatory framework Strategy 1 Legislation - Regulation - Delegations NSW Government Business Entry Point Strategy 4 Standard data sets Information on current tenders advance tenders Disclosure of information on tenders awarded Online project management Strategy 7 Project management Virtual projects Access & sharing of project information Community consultation etendering Strategy 5 Issue tenders Receive tenders Electronic Marketplace Strategy 6 Browse, search and view Dynamic pricing Ordering online Full integration with financial information systems Contract catalogues Specific catalogues Strategies 10, 11, 12, 13 and 14 Invoicing & Payment - Statistical data collection - Delivery SERVICE PROVIDERS SERVICE PROVIDERS INDUSTRY AND BUSINESS ASSOCIATIONS Strategies 8 and 9 Appendix A outlines how e-procurement solutions can be applied to the acquisition, operation, maintenance and disposal of an asset. E-Procurement Implementation Strategy 9

13 NSW Government Leading the Way Strategy 1 The NSW Government will ensure the legislative and regulatory framework fosters confidence in the take up of electronic procurement. Legislation and financial practices The NSW Government is committed to ensuring that its legislation and financial practices facilitate the adoption and use of electronic procurement. The NSW Electronic Transactions Act addresses legislative issues identified to date. The Act enables business to be conducted electronically without the need for backing up with paper documents, subject to the conditions in the Act. The Act is broadly consistent with the Commonwealth legislation, enabling a uniform legislative approach across all Australian jurisdictions. Under the Act: a transaction is not invalid because it took place by means of one or more electronic communications requirements to give information in writing, provide a signature, produce a document, record information or retain a document can generally be met in electronic form: if at the time the requirement was met it was reasonable to expect that the information, document etc would be readily accessible so as to be useable for subsequent reference the person to whom the information or document is sent gives consent to it being by electronic communication. To take advantage of e-procurement, agencies need to review their financial and administrative practices, delegations and processes for maintaining accountability. To assist agencies in reviewing and changing their procurement delegations, financial and administrative practices guidelines based on best practice approaches by agencies which have adopted electronic procurement, will be developed. Security Issues Effective and appropriate information security management is a critical component in the on-line economy. The NSW Government supports the widespread adoption of the new standard AS/NZS 4444 Information security management to facilitate the take up of electronic procurement by buyers and service providers and to provide confidence in the security of electronic transactions and information in electronic form. However, the Government recognises that the threat of cyber crime is increasing, often from jurisdictions beyond the reach of Australian law and the cooperating law enforcement agencies. This demands constant vigilance and continuous upgrading of measures to safeguard the necessary confidentiality, integrity and availability of information and electronic procurement transactions. The Department of Information Technology and Management is researching and developing a policy and strategic framework for addressing security issues with electronic service delivery. 10 NSW Government White Paper

14 Risk Management To assist agencies in understanding and addressing the risks associated with electronic procurement, the Department of Public Works and Services is addressing risk management issues associated with electronic procurement on behalf of Government. As a first step, the Department of Public Works and Services has developed a guide on Risk Management in Electronic Procurement. The guide provides advice on issues such as managing electronic records and maintaining probity. Building on successful implementation of this guideline internally, the Department of Public Works and Services will provide the guide as a basis for a future whole-of-government approach to risk management in electronic procurement. Actions: 1 The NSW Treasury, Crown Solicitor, Auditor General, Department of Information Technology and Management and the Department of Public Works and Services through a working group will on an ongoing basis review and remove any legislative or regulatory impediments, to the adoption of e-procurement. 2 The NSW Treasury, the Audit Office, State Records of NSW and the Department of Public Works and Services by September 2001 will review delegation and administrative principles and provide guidelines, to assist agencies to alter their delegations to reflect the benefits and safeguards available through electronic procurement. 3 The NSW Government will operate in a secure environment using preferred open systems which are consistent with the Australian Procurement and Construction Council s Government Framework for National Cooperation on Electronic Procurement 4 The Department of Public Works and Services by October 2001 will prepare a guide providing advice on risk management strategies on the use of electronic procurement. E-Procurement Implementation Strategy 11

15 Strategy 2 NSW Government agencies will re-engineer their procurement processes to optimise the use of electronic commerce and other innovative technologies. One of the objectives of Premier s Memorandum Meeting the Government s Information and Communications Technology Strategic Agenda is for all appropriate Government services to be available electronically by December Target dates for tender information on the internet, appropriate publications on the internet, appropriate transactions on the internet are specified in the attachment Electronic Service Delivery (ESD) Reporting Framework to the memorandum. Improving the procurement process is a key strategy of the NSW Government Procurement Policy. The strategy gives effect to the ESD goals for the procurement activities of Government. The ESD goals require agencies to assess, develop and implement plans to deliver all appropriate services electronically. In order to optimise the use of electronic commerce and other innovative technologies, and to develop their individual e-procurement implement strategy, NSW Government agencies need to analyse their business needs and understand their procurement profiles, processes and capability to take up e-procurement. Some of these areas are: number of transactions type of procurement spending patterns procurement and financial system skills and capability of staff to implement e-procurement. Some of the procurement areas for consideration for re-engineering are: placing business opportunities and tendering information online streamlining purchase, approval, ordering, receipt and payment processes integrating procurement management with financial and other management systems integrating stock control and delivery systems to minimise the costs of inventory management, warehousing and wastage. Actions: 5 The Department of Public Works and Services will develop a guideline for whole-ofgovernment application by September 2001 to assist agencies develop their e-procurement implementation strategy. 6 NSW Government agencies are to assess their business needs, procurement profiles, processes and capability to take up e-procurement and re-engineer their processes accordingly. The target is for agencies to have all appropriate transactions on the Internet, and their e-procurement re-engineering strategy in place by December 2001 (see Strategies 5, 6 and 7). 7 NSW Government agencies will report annually their performance on their take up of e-procurement against the targets established in their agency implementation strategy through the reporting mechanism outlined in Strategy NSW Government White Paper

16 Strategy 3 To help ensure rapid adoption of electronic procurement by agencies and Local Government, the NSW Government will build on the innovative ideas, expertise and applications of its agencies and other jurisdictions. The NSW Government will use the knowledge and experience gained by key agencies and other jurisdictions to guide future adoption of e-procurement processes and avoid duplication of effort and costs. Recognising that Local Government is a significant procurer, they will also be encouraged to support the take up of e-procurement and participate in this Implementation Strategy. Actions: 8 The NSW Government, through the State Contracts Control Board and Construction Policy Steering Committee and in consultation with the Department of Information Technology and Management, will identify suitable e-procurement initiatives developed and implemented by agencies and other jurisdictions that have potential for adoption by NSW Government agencies. 9 The NSW Government, through the Department of Local Government, will encourage local government organisations to take up e-procurement in a manner consistent with this Implementation Strategy. E-Procurement Implementation Strategy 13

17 Doing Business with Government Strategy 4 The NSW Government will establish a Business Entry Point through the NSW Government web site to enable service providers to seek information on NSW Government business opportunities. The NSW Government is committed to ensure that all appropriate government services are available electronically. This includes tender information. To enhance access to the tender information a NSW Government Business Entry Point will be operational through the NSW Government web site, ServiceNSW at by September The Business Entry Point will permit searching for information across all NSW Government agencies, on the basis of agency, work and product type, location, and indicative value. It will provide information on: current tenders status of tenders advance notice of tenders other relevant tender and business opportunity information. In addition, the Business Entry Point will also provide information on contracts awarded by NSW Government agencies. Premier s Memorandum No Disclosure on Information on Government Contracts with the Private Sector outlines the information to be provided to the private sector. The Department of Public Works and Services, the Department of Information Technology and Management and the Department of State and Regional Development will maintain and promote the site to industry as the source of information for NSW Government business opportunities. The Department of Public Works and Services will ensure that standard tender data format, agreed to by all Australian jurisdictions, are used to enable consistency and searchability of information across agencies. Where agencies have individual web sites for their business opportunities, they are to ensure that the standard tender data format is used to enable the information to be found through the Business Entry Point. For agencies without the required capability, their business opportunities information can be hosted in partnership with agencies with the necessary capability. 14 NSW Government White Paper

18 Actions: 10 The Department of Public Works and Services, the Department of Information Technology and Management and the Department of State and Regional Development will maintain and promote to industry the Business Entry Point established for NSW Government business opportunities on the NSW Government web site ServiceNSW at by September The Department of Public Works and Services will communicate by July 2001 the nationally agreed standard tender data format to NSW agencies and local government agencies to enable consistency and searchability of tender information across agencies. 12 NSW Government agencies will make available their business opportunities information on the internet using the standard tender data format, commencing from July By December 2001, all NSW Government agencies will have their business opportunities information available through the NSW Government web site. 13 All NSW Government agencies will make their contract awarded information available through the NSW Government web site from December E-Procurement Implementation Strategy 15

19 Strategy 5 The NSW Government will implement an electronic tendering system to provide better access and greater opportunities for Government agencies and enterprises to do business. Agency tender information is currently available on the Internet. On behalf of the NSW Government, the Department of Public Works and Services in August 2000 launched etendering, a system for tendering via the internet. etendering is a best practice electronic tendering system which satisfies high probity requirements and meets security and integrity requirements. The etendering system is compatible with other electronic tendering systems such as those of the South Australian and Western Australian Governments. etendering enables prospective tenderers to view opportunities, register expressions of interest, receive information and submit tenders electronically. The tender web site at tenders.nsw.gov.au is easy to navigate, locating and submitting tenders is a simple operation requiring no special user skills, software or hardware. The etendering system streamlines the whole tendering process and provides better access and greater opportunities for businesses, particularly small and regionally based enterprises. For example, through the electronic submissions of tenders, agencies are able to download the information into a form suitable for evaluation purposes without having to manually enter data, saving time and costs. For businesses, electronic tendering makes it easier to obtain tender documentation and to submit an offer, saving on time, printing and delivery costs. The Department of Public Works and Services will call major tenders for goods and services and construction services using the etendering system by July By December 2001, all Department of Public Works and Services tenders will be available and can be submitted and received electronically. A number of the Government s procurement agencies such as the Roads and Traffic Authority, Sydney Water, and the Sydney Catchment Authority, will also be calling tenders electronically for major construction projects from the second half of Actions: 14 NSW Government agencies will implement electronic tendering through the etendering system. 15 NSW Government agencies will initially maintain both paper and electronic methods to enable service providers to adapt to the new tendering system. By December 2001, all agencies will use electronic tendering for appropriate tenders (see Strategy 2). 16 From January 2003, NSW Government agencies will use electronic tendering for most procurement activities. 16 NSW Government White Paper

20 Strategy 6 The NSW Government will develop an electronic marketplace for the procurement of goods and services. Electronic marketplaces are online trading communities where buyers and service providers are brought together through the internet. Buyers and service providers can seek or provide information and conduct transactions online. The electronic marketplace may also provide for value added services such as personalised catalogues, collection of statistical data and tracking of orders. Moving government purchasing on line is a key component of the e-procurement implementation strategy and is being investigated by the Department of Public Works and Services, with the support a number of central and major procurement agencies, including the Department of Information Technology and Management, The Premier s Department, NSW Treasury, Department of Education and Training, NSW Health and the Department of State and Regional Development. Included in the investigation will be cataloguing, product numbering, barcoding and messaging standards. It is proposed that the Government s initiative will be implemented in four phases, in partnership with agencies and key service providers. The electronic marketplace will reflect the NSW Government s procurement policy and probity requirements. The phases are generally as outlined below. However, the sequence and timing of implementation will vary between industry sectors. Phase 1 Phase 2 Phase 3 Phase 4 comprises a web site which allows agency buyers to browse catalogues to view details of items on NSW Government approved contracts. will add the ability to place orders online. In addition to contract items, the site will provide details of items available from accredited service providers to Government. This phase will allow agencies with integrated electronic procurement processes to benefit from streamlined procurement, such as requisition and approval workflow with agency managed financial authorisation. will integrate procurement with financial management systems and allow invoicing and payment and review of purchasing. Integration for logistics and distribution with several freight companies will be added to provide track and trace. This phase will include the industry specific catalogues, such as health or education. will extend use of the marketplace by voluntary participation of additional agencies and industry partners. The Government will ensure all agencies undertaking procurement on line adopt a similar approach to ensure suppliers and purchasers are not required to develop and operate a multitude of different systems. E-Procurement Implementation Strategy 17

21 Actions: 17 The Department of Public Works and Services will establish an electronic marketplace for the procurement of goods and services which will initially capture State Contracts Control Board contracts with a current expenditure in excess of $2.4 billion annually. The anticipated implementation phases of the marketplace are: phase 1 which allows accredited customers controlled access to browse, search and view details of goods and services available under State Contracts Control Board and other NSW Government approved contracts, has been completed. phase 2 which allows agencies to order online and to provide dynamic pricing functionality such as reverse auctions, will be added by September phase 3 which will include catalogues for specific markets and or agency sectors and provide full integration with financial information management systems. Phase 3 will be functional from December phase 4 which will include voluntary participation by additional agencies and industry partners. 18 NSW Government agencies are to progressively conduct key procurement activities electronically in accordance with their e-procurement implementation strategy (see Strategy 2). 19 Agencies, in undertaking procurement on line, are to adopt a similar approach to ensure suppliers and purchasers are not required to develop and operate a multitude of different systems. 18 NSW Government White Paper

22 Strategy 7 NSW Government agencies will develop online construction project procurement and delivery management system capability. Construction industry enterprises are taking greater advantage of the opportunities offered by the adoption of knowledge and information management processes and the use of information technology to improve efficiency and productivity. The trend towards the use of online collaborative technologies in the construction industry promises significant efficiencies. Online project management is an example of collaborative tools, which uses technology to manage project information from conceptualisation, feasibility, design coordination and modelling/demonstration, verification and review; tendering, contract, construction and cost management; supply chains; operations and maintenance management and decommissioning planning. Managing knowledge and information represents an opportunity for construction industry enterprises to achieve substantial savings, significant improvements in enterprise performance and competitive advantage. The Department of Public Works and Services, embarked on an online project management initiative (Asset.gov) that enables all stakeholders in construction procurement and delivery projects to access, share, collaborate on and review project information. The focus of the initiative is on providing products built around the asset life cycle management concept, seamlessly integrating information and practices across larger parts of the value chain from planning, procurement, asset creation, asset management and asset disposal. Its aim is to realise better understanding between clients, contractors, local council, and other planning authorities, better coordination between disciplines and fewer discrepancies in documentation. Project stakeholders are able to better understand critical issues and their development and are therefore in a better position to make informed decisions. Initially Asset.gov products will support phases of planning, development and delivery of government projects. Digital project information can be viewed online, including CAD drawings, perspectives and site panoramas, incorporating tools to take measurements, insert and review comments. Future releases of assets.gov will bring radically increased levels of online interactivity across construction projects, allowing real time communication and decision making. For example, Asset.gov will offer online construction management tools, the project communication system will list and manage hot issues, emerging actions and maintain a register of all documents and correspondence. To facilitate consultation among communities with shared interest on projects, online communication tools for virtual communities will also be added to Asset.gov. The Department of Public Works and Services will use Asset.gov on its major construction projects from June The use of Asset.gov will be available to NSW Government agencies and service providers to government. E-Procurement Implementation Strategy 19

23 Actions: 20 The Department of Public Works and Services will use Asset.gov to facilitate the early involvement of planning authorities, including Councils and the Board of Fire Commissioners, in the approval of Development and Building Applications, from June 2001, to reduce approval times. 21 The use of Asset.gov will be extended to facilitate community consultation on Department of Public Works and Service s projects from July The Roads and Traffic Authority (RTA) is trialing project web technology in the procurement of civil construction services and delivery to enhance stakeholder communication and collaboration, including community consultation, on key projects. 23 NSW Government agencies will develop by December 2001 their own program for the implementation of online project management capability to improve construction services and delivery (see Strategy 2). 24 The Construction Policy Steering Committee (CPSC) will monitor and coordinate the development of these programs to ensure consistent agency practices and to reduce the cost of doing business (see Strategy 13). 20 NSW Government White Paper

24 Working with Government Strategy 8 The NSW Government will encourage service providers in the development of their e-procurement capability to match the Government s implementation of e-procurement for both goods and services and construction. The Government acknowledges that the rate of take up of electronic procurement by enterprises, across and within industry sectors will vary. Within any particular sector, some participants may be more advanced than others, and some will be faster adopters of electronic procurement. The level of take up will range from the use of , to participation in electronic marketplaces, to full scale integration of procurement processes. All enterprises, large or small, whether they deal in one product or a complex range of products or services, need to determine what is appropriate for them. There are numerous examples of electronic procurement initiatives for goods and services and construction undertaken by small business enterprises and large corporations. To accelerate the take up of electronic procurement the NSW Government has identified three levels of take up of e-procurement for service providers which reflect the level of investment and capability required of service providers and the potential benefits. The levels identified match the levels of e-procurement take up by the Government. Level 1 Level 2 Level 3 Is limited to the simple use of electronic communication requiring minimal investment in hardware, software and human resource. Involves receiving, managing, using and communicating information in electronic form. This requires an investment in financial and human resources, time, and customising organisation systems. To make effective use of information, an organisation s internal processes will need to be redesigned. Involves enterprises working closely together forming virtual enterprises. This will require a significant investment in resources and industry wide cultural and process changes. The level of potential benefit will increase with the level of commitment to electronic procurement systems. The investment required to achieve the benefits will also increase. E-Procurement Implementation Strategy 21

25 Actions: 25 Service providers to Government for goods and services and construction are encouraged to review their e-procurement capability and determine the level of investment in resources and technology they require to take advantage of electronic commerce opportunities available to their business and market position. 26 To take advantage of available e commerce and procurement opportunities, service providers for goods and services and construction need to: re-engineer their internal business processes for electronic procurement extend the use of electronic procurement for their own supply chain set reflective e-procurement goals down the supply chains eg for subcontractors and suppliers network with Government agencies and other enterprise, clients and service providers about experiences, achievements and improvements needed. 22 NSW Government White Paper

26 Strategy 9 The NSW Government will look to industry and business associations to take a lead role in promoting and facilitating the take up of electronic procurement amongst their members and industry generally. As the representatives of industry and business, industry associations have a vital role in supporting the Government s direction for the take up of electronic procurement and in facilitating productive and efficient outcomes for industry enterprises generally. The NSW Government will work with industry and business associations on the communication of e-procurement implementation benefits to enterprises and will conduct forums to gain industry feedback and will collaborate on identified initiatives. Actions: 27 The NSW Government through the Department of State and Regional Development, the Department of Public Works and Services and the Department of Information Technology and Management, will conduct forums with industry and business associations to gain industry feedback on e-procurement initiatives on goods and services and construction services and collaborate on initiatives. 28 Industry and business associations will be encouraged to provide constructive feedback on government e-procurement initiatives for goods and services and construction. 29 The Department of State and Regional Development and the Department of Information Technology and Management will work with industry and business associations on: taking the lead in developing e-procurement initiatives for their industry sector and project performance indicators and benchmarks identifying and promoting good practices and publish case studies about the benefits of electronic procurement encouraging the prompt take-up by industry, particularly small-to-medium enterprises sponsoring and encouraging participation in, awareness and training courses. 30 Industry and business associations will be encouraged to identify and provide assistance to their members by: providing e-procurement capability audit services organising arrangements with IT companies to provide assistance in taking up electronic procurement in the areas of hardware, software, advisory services and training developing guidelines and toolkits on the implementation of electronic commerce and electronic procurement in their industry sector. E-Procurement Implementation Strategy 23

27 Encouragement and Support Strategy 10 The NSW Government will develop communication and assistance programs, for agencies and service providers in the take up of information technology and use of e- procurement. The take up of e-procurement for both Government and service providers is influenced by its potential business and commercial opportunities. The investment required in implementing e-procurement is not only in terms of dollars but also in changes required to business systems and processes. The NSW Government recognises the need to communicate the benefits of e-procurement and provide assistance to both agencies and service providers. To raise the awareness of e-procurement potential and benefits and to assist agencies and service providers in the take up of electronic procurement, the Government will, where appropriate, work with industry and industry associations, to develop communication and assistance programs. For example the Department of State and Regional Development s small business assistance programs. Actions: 31 The NSW Government major procurement and other lead agencies, on an ongoing basis, will identify organisations (public and private) that have implemented best practice in e- procurement, and publish case studies annually for the guidance of both public and private sector agencies. 32 NSW Government major procurement and other lead agencies will provide the necessary assistance to service providers to participate in their e-procurement projects and initiatives. 33 The Department of State and Regional Development, in conjunction with the Department of Public Works and Services and the Department of Information Technology and Management will by September 2001, prepare and release a resource guide on electronic procurement for use by government agencies and service providers. The directory will be published on the NSW Government web site. 34 The Department of State and Regional Development, working with industry associations, the Department of Public Works and Services and the Department of Information Technology and Management will conduct seminars for agencies and service providers to promote the benefits of e-procurement. The seminar program will begin in September NSW Government White Paper

28 Strategy 11 The NSW Government will offer incentives to service providers to facilitate their take up of e-procurement initiatives. The NSW Government recognises a level of commitment and investment is required of service providers to make effective use of the enabling technology for e-procurement. To encourage service providers, the Government will offer incentives to facilitate the take-up of electronic procurement. The level of incentive provided will be commensurate with the level of commitment and investment required by service providers. The 3 levels of incentives described below complement the NSW Government s 3 levels of goals for service providers, outlined in Strategy 8. Level 1 Level 2 Level 3 At the simplest level, the Government will provide better online access to its business. At this level, the investment required is minimal. Enterprises can use low-level technology to gain access, to start to become aware of the potential of electronic commerce, and to understand how and when they can benefit through further investment. Where the level of investment becomes greater, there are longer-term benefits but enterprises will need time to recoup the initial set-up costs. At this level, the Government will offer incentives which help balance those set-up costs but which are still commensurate with the potential benefits. These incentives may take the form of a tender price assessment advantage for tenderers who have demonstrated commitment and implementation of electronic procurement in a way that will accrue benefits in the long term. At this level, where there is significant investment, organisational and process change required and where participants need to work closely, the incentive provided by Government may consist of exclusive access whereby the Government will only deal with organisations that demonstrate this level electronic procurement implementation. Such exclusive dealing will only take place if there are enough organisations for Government to obtain competitive offers. Service providers will not be disadvantaged by competing with organisations which have not made the necessary investment. The Government may decide who provides the best value service through pre-qualification rather than through bidding. Actions: 35 The level 1 incentive of better access to NSW Government business will be in place by October The level 2 incentives, based on a cost benefit for tenderers who have demonstrated commitment and implementation of e-procurement, will be introduced by December Where appropriate, NSW Government agencies will procure exclusively with level 3 e- procurement-enabled service providers by December E-Procurement Implementation Strategy 25