An ongoing project that started in 2008 aims to reform public procurement in Bangladesh. By 2011, four Bangladeshi agencies had implemented electronic procurement, representing about 10 per cent of all public procurement. If anyone can easily bid on a government contract from their office or even own home, and if everyone feels that the process will be fair, more companies are likely to bid. More bids for a given project increases competition, leading to lower prices tendered to the government. The research analyzes data from the Local Government Engineering Department (LGED), which implemented e-GP in 2011. LGED first introduced e-GP as a very small pilot in 2012. After great expansion, about 95 per cent of LGED procurement uses e-GP today. This paper attempts to conduct a cost-benefit analysis of this e-GP initiative. The paper found multiple benefits of e-GP. Firstly, since participation is online, any registered user with internet can apply. Also, as bidders can participate from home or office removing the necessity to visit the procuring entity’s office, the collusive elite-bidder groups cannot block non-collusive bidders anymore from participating in the bidding process, resulting into a greater competition and hence, lower prices for publicly procured goods, works and services. The benefit of e-GP hence stems from the removal of artificial market distortions. On the other hand, the cost will be operational and maintenance cost as well as training costs to the public officials who run it. Hence, this cost estimation will be based on project documents and discussions with relevant officials.
Author: Abdallah, Wahid
Type: Working Paper
Year: 2016
