Pan-European Public Procurement Online (PEPPOL)

Published on: 17/01/2011
Document

PEPPOL (Pan-European Public Procurement Online) aims to implement common standards enabling EU-wide public eProcurement. Existing national systems of electronic public procurement will be linked so that all participants can enjoy the full benefits of a single European market.

The broader vision of PEPPOL is that any company in the EU can communicate electronically with any EU governmental institution for pre-award and post-award electronic procurement activities. "Pre-award eProcurement" is the eProcurement process before a contract has been entered; typically a tender including eSignature, Virtual Company Dossier and eCatalogue. "Post-award eProcurement" is the eProcurement process based on a contract; typically eCatalogues, eOrdering and eInvoicing. PEPPOL will allow any supplier in the EU to respond to any European public tender and conduct any resulting purchasing utilizing their existing national infrastructure.

The PEPPOL project focuses on cross-border activities within the pre-award procurement process of Virtual Company Dossiers (evidentiary documents) to eCatalogues and through to eOrdering and eInvoicing. PEPPOL will enable all Member States and their government contracting agencies, their suppliers (including small and medium-sized businesses) and the ICT industry to participate, follow its work and influence the definition of specifications as they are developed.

PEPPOL will encourage all Member States to capitalise on the potential of eBusiness. This will in turn boost innovation and strengthen the competitiveness of enterprises and SMEs across the EU. The immediate benefits of PEPPOL will allow businesses to widen their markets and carry out easier, more efficient and secure pro¬curement. Contracting authorities will generate savings on administrative and transaction costs.

Policy Context

Electronic public procurement initiatives clearly demonstrate the significant potential cost savings. It has been estimated that if eProcurement were introduced over all European contracting authorities, annual savings could exceed Euro 50 billion.

Many EU countries use eProcurement to make bidding for public sector contracts simpler and more efficient. However, these solutions are often implemented at national level only, with limited coordination cross-borders. The European Commission's pilot project PEPPOL (Pan-European Public Procurement Online) has recently successfully completed its first year of activities towards making electronic communication between companies and government bodies possible for all procurement processes in the EU. PEPPOL will enable the connection of existing national systems, which is essential to allow businesses to bid for public sector contracts anywhere in the EU: an important step towards achieving the Single European Market.

Governments are the largest buyers of services in the European Union. Total public procurement in the EU is estimated at about 16% of the Union's gross domestic product (GDP) or €1,500 billion.

eProcurement allows the electronic exchange of all documents related to the various phases of the procurement process: tendering, bidding, ordering and invoicing. This makes the process much simpler and more efficient: saving money for the bidders and the tax payer. eProcurement systems are already functioning in several EU Member States.

However, many public administrations lag behind industry in electronic data exchange with their suppliers. The lack of common standards is a major obstacle for companies - especially small and medium size enterprises (SMEs) - participating in public procurement

PEPPOL is funded under the competitiveness and innovation programme (CIP).

Description of the way to implement the initiative

PEPPOL allows European businesses to widen their markets and carry out cross-border public procurement transactions. A standardised electronic procurement process from eCatalogue to eInvoice will contribute to a more economic and secure interoperability for enterprises and SMEs.

eSignature

Electronic signatures based on electronic certificates identifying companies and/or single persons are in common use already. They allow the secure identification of the sender of a document and ensure that a document has not been modified. PEPPOL aims to create interoperability between the different national schemes, so that in practice a public sector entity can validate certificates issued in other member states, allowing for electronic submission of tenders cross borders.

Virtual Company Dossier (VCD)

The objective of the VCD is to replace paper certificates with electronic attestations. The VCD and its standardised specifications will support tenderers in creating their information and qualification package in their home country more easily and with a higher degree of quality. With the VCD it shall be easier for enterprises and SMEs to make a cross-border submission and to meet the legal and formal company qualification criteria for the awarding phase.

eCatalogue

A shared approach for providing product information though eCatalogues will save time for suppliers when preparing their offers and it will facilitate the evaluation of tenders for contracting authorities. Economic operators will be encouraged to invest into the creation of an electronic prospectus of their offer, because it can be reused for different tenders and across sectors. At the same time, open source solutions will benefit a large number of public administration small offices, which do not have budget for the purchase of proprietary eProcurement applications.

eOrdering

The eOrder process deals with the electronic transmissions of documents. It starts with the issuing of orders by the buyer and ends with the receipt of an order response and the transmission of the delivery instructions from the supplier. Ordering is an important procurement phase as it strongly affects the other phases, from catalogue to payment. The goal is to implement a European Ordering (EOI) framework that allows SMEs to adopt eOrdering in an effective way to lower their cost of entry and operating costs.

eInvoicing

The eInvoicing process deals with the claim for payment for the goods and services that have been either ordered or delivered received or consumed under the conditions agreed by the buyer and supplier. eInvoicing links the two important value chains, the procurement process and the payment process. PEPPOL seeks to implement and pilot arrangements for the exchange of eInvoicing documents between all awarding entities and related economic operators.

PEPPOL Transport Infrastructure

The foundation of all PEPPOL post-award services is an interconnected eProcurement infrastructure based on common IT standards compatible with the various solutions provided on a Member State-level. The centrepiece of this infrastructure is a messaging service enabling government agencies and private companies to exchanges of all kinds of business documents in a secure and reliable manner.

Main results, benefits and impacts

Objectives:

PEPPOL aims to develop pilot solutions for the domain of public procurement. The objective of the PEPPOL project is to set up a pan-European pilot solution that, conjointly with existing national solutions, facilitates EU-wide interoperable public eProcurement. The pilots that will be developed in PEPPOL will support any economic operator in the EU and the European Economic Area (EEA) to respond to any published public tender notice electronically and to govern the entire procurement process from their own national infrastructure to any another national infrastructure.

Thereby PEPPOL will focus on the engagement and participation of SME companies to public eProcurement. The vision of the PEPPOL project is that any company and in particular SMEs in the EU can communicate electronically with any European governmental institution for the entire procurement process. The final outcome of PEPPOL will be an interoperational environment built upon national systems and infrastructures supporting the full cycle of eProcurement activities. National procedures should be connected to pan-European process chains to ensure fulfilment of existing specifications and directives.

Progress:

During its first year PEPPOL successfully specified and designed the infrastructure to enable cross- border public procurement in Europe. The PEPPOL infrastructure was released for beta test on 1 May 2009. Since then it has been possible to exchange business documents through the PEPPOL infrastructure for testing purposes.

For the remaining two and a half years the project aims to construct and pilot the solution which will be operative after the project ends in late 2011. A plan for long-term sustainability is in progress. The pilot project will facilitate the electronic cross-border exchange of orders, invoices, and catalogues. It also includes the re-use of company information required for bidding. The mutual recognition of electronic signatures will also be addressed.

Enlargement:

In order to enlarge the geographical coverage of PEPPOL, to strengthen specific focus areas and to ensure long-term sustainability, the project budget has been increased by €11.2 million. It makes a total budget of €30.8 million, half of which comes from the European Commission.

Greece, Portugal, Sweden and the United Kingdom entered the project as of 1 November 2009. The PEPPOL consortium consists now of 18 partners from 12 EU countries. The project timeframe has been extended by six months, with completion foreseen by 31 October 2011.

Impact:

Small- and medium-size enterprises will benefit from reduced costs through automated and simplified processes, and could ultimately see an increase in their sales thanks to access to new and larger markets.

The higher maturity in eProcurement at both buyer and supplier side, will create new innovative IT projects for the software industry, by expanding optimization of business processes to the whole supply chain.

EU governments at federal, regional and local level will see reduced costs through automated and simplified processes and reduced costs through more competition in bids. Electronic processes ensure transparency and better control of funds, as well as possibility of facilitating green and sustainable procurement. PEPPOL can also contribute to the export of domestic products and support economy modernisation.

Lessons learnt

This field will be completed by the submitter when the lessons learnt have been identified and understood.

Scope: Cross-border, International, Pan-European