Good Practices and Innovations in Public Governance 2003-2011

2003 Category 3: Republic of Korea
Asia and the Pacific
Republic of Korea
2003 Category 3 Winner
Public Procurement Service, Republic of Korea
Description
Introducing an electronic procurement system in order to improve procurement
services’ efficiency.
The Problem
Public Procurement Service (“PPS”) of the Republic of Korea administers procurement
of goods and services for about 30,000 Korean public institutions. The previous
paper based system was slow and caused the users a great deal of inconvenience. In
addition, a series of corruption scandals had hurt the reputation of the PPS.
The Solution
Given this backdrop, PPS launched a government e-procurement system. It was essentially
an “e-mall”, a combination of an Electronic Data Interchange (EDI) system
and an internet shopping mall. The “e-mall” has proved to be a big success. Currently,
about 92% of the procurement transactions, involving 24,000 public organisations,
flow through this system. The process is greatly streamlined, making it more
efficient to use by the customers and suppliers alike.
Previously, the PPS was dealing with 4.2 million documents per year. The introduction
of an electronic system drastically reduced this amount. The streamlined system is not
only much more efficient and effective; it has also proven to be very user-friendly.
The introduction of online bidding has improved the efficiency of the entire procurement
process. The initial concerns about security were resolved thanks to the introduction
of such innovative solutions as e-signatures and authentication. A very positive
result of online bidding, coupled with participation of third-party experts such as
NGOs, increased the level of transparency of the whole procurement system, which
was necessary given the recent corruption scandals.
Another strategy involved in the new system was its focus on customer satisfaction.
In addition to the technological innovations, a fundamental shift in the mindset was
introduced to turn the PPS from an ineffective, public sector entity to a lean, customer-focused
service provider. Increasing customers’ convenience became one of its
central goals. The PPS re-engineered its structure form an item-centred organisation
to customer-oriented one, and started running mobile offices and help desks to bring
itself closer to its customers.
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