Urip Hudiono, The Jakarta Post, Jakarta
The government will set up a new procurement body to help expedite and streamline budgetary spending, as well as iron out the obstacles to the full implementation of e-procurement in government institutions.
Formulating guidelines for the transparent procurement of goods and services will be the agency's main responsibility, rather than conducting the procurements itself, said Agus Rahardjo, the head of the National Development Planning Agency (Bappenas)'s Procurement Policy Center.
""The agency is needed to improve the procurement system, including the introduction of e-procurement, and the conducting of procurements in response to emergency and disaster situations,"" Agus said Friday during a public discussion on government procurement.
""As it will be staffed by experts, it is expected to help improve the efficiency -- the value for money -- of procurements financed out of both the national and local budgets.""
Other tasks of the agency will include providing support for procurement budgeting, handling complaints, settling disputes and dealing with legal matters related to procurement.
State Minister for National Development Planning Paskah Suzetta had earlier said that the agency -- the foundation for which is provided by a 2003 presidential decree on government procurement -- would be established by this September.
Agus said that a significant amount of the Rp 220 trillion (US$24 billion) in government money allocated for procurement could be saved if the tender process was made more efficient.
Total government expenditure under the draft 2008 budget is penciled in at some Rp 836.4 trillion, up from Rp 752.4 trillion in this year's revised budget.
Some 5 percent of next year's procurements will be carried out online, Agus said, with e-procurement pilot projects being rolled out in five provinces.
""If we can reduce procurement costs by some 15 percent, then this would save a lot of money,"" he said.
Bappenas data shows that with an improved procurement system, such as the use of open tenders, the costs of a number of projects carried out by the Java provincial administration and the Public Works Ministry could have been reduced to Rp 2.3 trillion from the initial estimate of Rp 3.9 trillion, Agus said.
With open tenders, the procurement costs of some projects could be reduced by between 15 and 80 percent, he said.
""There are still problems that act as constraints on efficient procurement, however,"" Agus said.
""Even in Bappenas, procurement is overly costly. The construction of the Religious Affairs Ministry building and the Sulianti Saroso general hospital, meanwhile, were among projects that were surprisingly awarded to higher-cost bidders.""
The Finance Ministry's director general for budgeting, Ahmad Rohjadi, said that he hoped the establishment of the agency would help streamline spending as a result of the formulation of more accurate cost standards for the procurement of goods and services.
""The results of more transparent and efficient tenders can be used to improve cost standards based upon market prices,"" he said.
