Public eProcurement in Norway

Published on: 15/02/2006

The Norwegian Government has established a fully operational tool for electronic public procurement. The electronic Marketplace is operated by a private e-procurement service provider, IBX AS. The main goals of the initiative has been to lower the threshold for taking e-procurement in use, both for public sector entities and their suppliers. The most important mean in order to achive this, has been the establishment of an operational electronic tool for public procurement - the Marketplace

Description of the way to implement the initiative

The member state administrations should bear in mind the following over all challenges: - Do not underestimate the efforts needed to establish necessary awareness of procurement and e-procurement challenges and possibilities. - Select the public procurement processes to be supported by electronic means carefully - preferably on basis of a cost/benefit analysis and the general e-readiness among contracting authorities and their suppliers. Secure management buy in/political support and communicate the priorities and goals in all available channels. - Focus on establishment of relevant e-procurement services at an affordable price and acceptable risk for both public sector entities and their suppliers, rather than just writing reports. - Focus on the established e-procurement services as means for lowering the threshold for taking e-procurement in to use for public sector entities and their suppliers so that they can acheive real benefits, not on the e-procurement service as a goal in it self

Main results, benefits and impacts

By the end of May 2005, the status for usage of was: - 32 public entities use for electronic ordering. 23 of these are municipalities, 3 are counties (of a total of 433 municipalities and 18 counties) and 6 are central government entities. - The 32 public sector entities on represent approx. 20% of the total public procurement within operating costs, namely approx. NOK 23 billion ( euro 2,9 billion) of a total of NOK 112 billion.(euro 14 billion) - 233 suppliers are connected to the portal with electronic catalogues, in addition approx. 260 are currently in process for connection with electronic catalogues within 2005. - Total throughput the last 12 month period: NOK 408 million (euro 52 million). The target for 2005 is NOK 1 billion (euro 125 million). Total throughput since start up in June 2002: NOK 525 million (euro 66,5 million). - Total number of transactions the last 12 month period: 42 653. Totally 62 887 since start up. The focus for, since start up in 2002, has been to give support for the ordering process and to arrange for simplified invoice handling. Building on the forthcoming revision of the Norwegian public procurement regulations (implementing Directive 2004/18/EC), the relationship with user organisations and the skills accumulated through operation of the existing services, focus is now being set on the remaining parts of the public procurement process. This implies increased support for electronic invoice handling and the sourcing process. The latter including focus on the notification and publication of tender process, management of receipts/submission of tenders and evaluation of tenders. To support the sourcing process, a pilot was initiated in January 2005. The purpose of this project has been to: - Give input to the ongoing process on update of national public procurement regulations and to establish necessary national guidelines on use of electronic means in the public procurement process. - Gain experience on potential benefits and challenges connected with use of electronic sourcing processes. - Establish complementary functional specifications (using IDA-specifications as a starting point). The Ministry of Modernisation which is coordinating and supervising the public e-initiatives, is in the process of establishing a new action plan on e-procurement. This action plan is based on the EU´s action plan for the implementation of the legal framework for electronic public procurement and the results from the Programme and This will most likely enable a new initiative in order to improve public procurement in Norway by extended use of ebusiness.

Return on investment

Return on investment: Not applicable / Not available

Lessons learnt

On a more general level, lessons learned from the work on are that: - Introduction of e-procurement takes more time and more resources than expected - both in the public sector and among their suppliers. - Few of the challenges related to implementation of e-procurement are e-procurement specific, most can be related to change management and organisation of the procurement function and processes. - The e-procurement specific challenge is to provide the buyers with relevant, correct and up to date information as a basis for the buying decision: - The establishment of high quality e- catalogues. - Functionality in the solution and the user interface. - The threshold for adopting e-procurement by private companies and suppliers has been lowered. - Legislation is not an obstacle: - Initial focus on improving the regulations on general accounting and auditing - Future focus on the new EU public procurement regulations and national implementation of this. - The use of a private company as operator of the eMarketplace has been a success so far: - Synergy effects with the operations of similar services in the private sector. - Reduced risk for the public sector.

Scope: National