RESTRICTED
WORLD TRADE GPA/W/50
8August 1997
ORGANIZATION(97-3364)
Original: English Committee onGovernment Procurement
INFORMATION TECHNOLOGY AND PUBLIC PROCUREMENT
Contribution from theEuropean Community
Thefollowing communication fromthePermanent Delegation oftheEuropean Commission,
dated 30July1997, hasbeenreceived withtherequest thatitbedistributed tothemembers ofthe
Committee.
_______________
1. Introduction
Thisdocument presents theECviews onsome aspects ofinformation technology linked to
public procurement inorder tocontribute totheCommittee 'sdebate onthisissue. Itbuilds onthe
papers previously tabled bytheCommunity andother delegations, aswellastheSecretariat andseeks
tostimulate debate oncertain issues which todatehavebeenlessfullyaddressed.
Inparticular,thepaperwillfocusontwoaspects.Itistruethattheuseofinformationtechnology
advances canhelptoimprove thepresent procurement system andthatthepresent rules donottake
sufficient account ofthose advances. However, thedebate doesnotnecessarily endatthatpoint. A
wider useofelectronic toolscould putintoquestion thetraditional approach ofgovernment purchasing,
andreflection onthisissue isalsoneeded. Finally, onecannot forget thatnon-discrimination isa
fundamental principle oftheGPA, anditsrespect should beensured.
2. Useofelectronic tools toimprove thecurrent government procurement system
Today 'sinformation technology advances could provide thetools tocreate significant
improvements inproviding relevant information about procurement opportunities topotential suppliers.
Advertising opportunities andthetransmission ofdocuments between bidders andpurchasers
aregenerally considered asthemainareas inwhich information technology canplayarole. However,
itisalsowidely recognized thatthevarious legal frameworks arenotyetadapted totheuseof
information technology. Asregards theGPA, thishasbeenalready highlighted bytheSecretariat 's
paper of22August 1996 andtheCanadian non-paper recently distributed. Itshould alsobenoted
thatthefullbenefit ofthistechnology could onlybeachieved ifagreement onharmonized standards
forcoded information canbereached. Thiswould facilitate theuseofsearch devices tobrowse through
theinformation contained inthedifferent databases. Furthermore, theECwould liketosuggest the
useofaharmonized multilingual procurement vocabulary system todescribe thepurchases, ashas
beendoneatEClevelwiththeCPV. Security ofdatatransmission alsoneeds tobeensured.
Twoofthecategories defined intheSecretariat 'spaper areofparticular interest. They relate
tothewider useofselective tendering andtheimplications ofinformation technology forthedeadlinesGPA/W/50
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laiddown intheAgreement. Asregards theuseofselective tendering, information technology could
putintoquestion thepresent scheme. Thisissue willbedealtwithinthefollowing section.
Ithasbeenstated thatdeadlines could beshortened totakeaccount oftheincreasing useof
information technology. Asitisrecognized byArticle XIoftheGPA, anyprescribed time-limit shall
beadequate toallow suppliers toprepare andsubmit tenders. Information technology advances certainly
helptoshorten thetimeforsubmission, publication anddissemination oftenders. However, thetime
needed toprepare tenders islikely toremain thesameinmostcases. Aslongassubmission bynormal
mailandelectronic toolscoexists, itcould bediscussed ifentities using electronic transmission should
beoffered theadvantage ofshorter deadlines.
3. Newschemes ofgovernment purchasing asaresult ofwideuseofelectronic tools
Information technology could alsorevolutionize thewhole wayofdoing business between
purchasing entities andsuppliers. Thispathopens thewaytofullelectronic tendering orelectronic
commerce systems. Itisnotonlyinthecontext ofrelations between purchasers andsuppliers that
changes aretobeexpected. Inaddition, newelectronic tools provide opportunities forpurchasing
bodies tocooperate viatheexchange ofinformation, ideasandexperiences. Thisoption would require
further consideration onsecurity aspects, interoperability ofsystems, aswellasonlegalquestions such
astheacceptance ofdigital signatures.
Theextent towhich classic rulesofpublic procurement areabletofacethese newchallenges
needs discussion. Some examples areprovided below which show thatthetraditional behaviour of
contracting entities inviting suppliers totender could beputintoquestion bynewtechnological
opportunities. These examples could serve asthebasis fordebate intheCommittee.
Thetraditional view ofpublic procurement isaprocedure inwhich thepurchasing entity
advertises aparticular contract andwaits forbidstobesubmitted, inother words, thepotential supplier
searches forapurchaser. However, information technology could alsofacilitate thereverse approach,
whereby thepurchasing entity searches actively forsuitable suppliers inorder toincrease competition.
Thisisparticularly linked toqualification systems. Inthetraditional approach, qualification systems
aredemand-driven, attherequest ofcontracting entities orpublic authorities. However, theuseof
information technology forqualification could facilitate thedevelopment ofdifferent approaches. On
theonehand, listsofselected suppliers could bemade accessible toother contracting entities, leading
totheestablishment ofeffective andefficient harmonized systems. Ontheother hand, oneshould
alsonotexclude thepossibility thatsuppliers themselves maywishtocreate asortofprivate qualification
system providing aquality labelandcompeting among themselves. Therefore, information technology
allows contracting entities toincrease competition among qualified suppliers oramong different systems
ofqualification. Inthatsense, akeyissue fordebate should bethemutual-recognition principle if
discrimination istobeavoided.
Notonlycould information technology helpcontracting entities toidentify suitable suppliers,
itcould alsofacilitate contracting entities 'direct purchases. Similarly tonormal markets, virtual
procurement markets could beimagined. Insuchaframework, entities would actually directly purchase
inanelectronic market where thesystem would identify, based onsupplier information available on
theWorld Wide Web, thebestoffer. Information technology could helptoidentify opportunities and
where tofindthebestvalue formoney. Thiskindofvirtual market could bequiteefficient forpurchases
ofoff-the-shelf products, where priceisthemajor criterion fortheaward ofthecontract andthecontract
value islow.GPA/W/50
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4. Ensuring non-discrimination
AkeyissuefortheCommittee 'sdebate ontheuseofinformation technology systems inpublic
procurement remains howtoensure thetransition toastreamlined, lesscumbersome andmore focused
procurement process insuchawaythatallplayers, whether purchasers orsuppliers, willbenefit from
theuseofnewelectronic tools ingovernment procurement. Inparticular, theuseofinformation
technology should promote theaimsofopen, non-discriminatory andefficient government procurement.
Asitisstated intheGPASecretariat 'spaper of10May1996(GPA/W/15), theincreased flow
ofinformation, ifnotproperly handled, could putforeign suppliers atadisadvantage, evenwhere
formally applied onanon-discriminatory basis.
Atpresent, non-discrimination should address atleastthequestions oftheeaseofaccess to
information sources (including establishing linksbetween databases andensuring interoperability) and
theeaseofuseofinformation tools (including search devices, common nomenclatures ...).
There isanother element which hastobetaken intoaccount intheuseofadvanced information
technology tools. Indeed, oneshould avoid thatitcreates orwidens thegapbetween entities and
suppliers inparticular SMEs, which caneffectively operate intheinformation age,andthose which
cannot, thuscreating acompetitive advantage infavour oftheformer group. Thisgapalsoappears
atinternational level given thatnotallcountries areatthesame level ofsocial andtechnological
development withrespect totheinformation society. Therefore, consideration would havetobegiven
astohowtotakeaccount ofthediffering levels towhich GPA members make useofinformation
technology, aswellasthepotential needs ofnewly acceding members inthefuture.
5. Conclusions
TheEuropean Community isconvinced thatapolitical discussion ontheroleinformation
technology should playinthereview process oftheAgreement isnecessary before theCommittee
considers specific changes toexisting articles oftheAgreement. Thisdebate willhavetofocus on
ensuring non-discrimination.
Thechoices made atthisstage willdetermine theextent towhich theaimofsimplifying the
Agreement inorder tomake itmore attractive tosignatory candidates willbeattained.
Thispaper mentions themajor technical andlegalquestions arising withtheuseofinformation
technology ingovernment procurement. TheEuropean Community requests thattheCommittee deal
withthese points initsdiscussions onthese issues. TheECwillatthatstage tableconcrete solutions
forthese questions.