Last March 23, 2008 President Soesilo Bambang Yudhoyono issued a Presidential Decree No. 34/M/2008 appointing former Secretary General Department of Public Service Mr. Rustam Sjarief to chairing Government Institution for Procurement of Goods and Services. This institution is expectedly to review and analyze government’s policies on goods and services procurement in order to ensure that government’s procurement procedures runs both transparently and accountably as well as to reduce state losses.
Government is seemingly very concern on the improvement of procurement since procurement is very sensitive from corruption, collusion and nepotism as well as any other unwanted practice. It is still fresh on our memory when a number of official from the Election Committee sent to jail due to stated guilty in misconduct procurement process for election logistic. It should be admitted that in all process of tender or auction for procuring goods and services in government, state owned enterprises and private company are sensitive of misconduct which triggering violation of law particularly corruption. Therefore, it is essential to develop a system which will minimize any violation which might emerge during procurement process.
One of the procurement systems which are considered to be national procurement system is e-procurement on e-commerce transaction basis. E-procurement system is believed can minimize above unwanted practices since the process is very transparent, fair and very practice. E-procurement is in line with the spirit of good governance implementation particularly its fairness and transparency either in public and private sector. Transparency is one of the major pillars for implementation of good governance. Transparency can reduce uncertainty and can help inhibit corruption among public officials. E-procurement system is undoubtedly very simple, straightforward and less time consuming. Government can use e-procurement procedure in both department and non-department institution as well as state owned enterprises rather than convention procurement system which very sensitive to corruption, nepotism and other unwanted practices.
In line with the spirit of developing e-procurement on e-commerce transaction basis, last March 25th, Indonesia’s law maker have officially ratified law Number 11 year 2008 regarding Information and Electronic Transaction (UU ITE) after around five years in consolidation. This law expectedly will provide legal protection of matters related to information technology, communication, and/or the electronic transaction including e-procurement, specifically regarding authentication and legal actions processed in the internet network system (e.g.: a business contract signed using an electronic signature and sent using an e-mail service). It is due to come in effect on the April 1st, and presently, Cyber Crime bill is also being consolidated by the police department as a follow-up to the UU ITE ratification. To support the existing legal basis on information and electronic transaction, government is now finalizing the draft of Presidential Decree regarding electronic procurement.
E-procurement itself can be defined as a business-to-business or business-to-consumer purchase and sale of supplies and services through the internet as well as other information and networking systems, such as Electronic Data Interchange and Enterprise e source planning. Typically, e-procurement web sites allow qualified and registered users to look for buyers or sellers of goods and services. Depending on the approach, buyers or sellers may specify costs or invite bids. Transactions can be initiated and completed. Ongoing purchases may qualify customers for volume discounts or special offers. E-procurement software may make it possible to automate some buying and selling. Companies participating expect to be able to control parts inventories more effectively, reduce purchasing agent overhead, and improve manufacturing cycles. E-procurement is expected to be integrated with the trend toward computerized supply chain management.
Now, there are several things that government needs to do to implement effective e-procurement. First, Legal umbrella. As abovementioned that the law on information and electronic transaction has been issued by law maker and ratified by government. However, for implementation of e-procurement, government should specifically issue an implementation regulation since the law on information and electronic transaction is still providing general provision of any electronic transaction on e-commerce basis. The implementation regulation is urgently required for legal certainty of e-procurement transaction.
Second, Information and communication technology tools and applications should be well provided. The high growth of development of information and communication technology (ICT) plays an important role in supporting e-procurement system. However, human resources behind the ICT tools are equally essential to be prepared. This actually one of the biggest challenge for government since preparing a good human resources is not such an easy task for our government. It seems useless to provide sophisticated ICT devices without preparing good human resources.
Third, government must have a clear strategy to overcome the barriers to change. Part of the strategy is to engage in a rigorous assessment of the current situation, the reality on the ground and the inventory of projects, articulate costs, impacts and benefits of programme as well as continuously monitor and evaluate the project upgrading. Borrowing a lesson from the private sector, e-Procurement must be customer-driven and service oriented. This means that a vision of e-Procurement implies providing greater access to information as well as better, more equal services and procedures for public and business.
