E-procurement as an instrument in improving public procurement processes: a Bangladesh perspective
Creators: name: AHMED, Farhina
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 440708
subject: Public administration

description: Due to the apparent inefficiencies and wasteful nature of the traditional procurement process, governments worldwide have started embracing ICT-based e-Procurement, which is presumed to be relatively easier, faster, cheaper and more transparent compared to the traditional, paper-based system. e-Procurement, as an e-Governance tool, may enhance the public procurement process while offering opportunities and challenges to the government.

Bangladesh, a developing country with 170 million people and a transitional economy, spends around USD 30 billion for public procurement, representing 45.2% of its annual budget and 8% of its gross domestic product (GDP). Public procurement represented 85% of the Annual Development Program in the fiscal year 2020. Therefore, any improvements to the public procurement system are expected to have a substantial financial effect.

The country established an e-Government Procurement (e-GP) pilot project in 2007. Its traditional procurement process has long been criticised for its limitations, including inefficiency and corruption. Existing literature suggest that e-Procurement adoption is a complex task. Many developed countries face challenges to implement full-fledged public e-procurement. Challenges include, lack of appropriate policy, legal framework, organisational readiness, motivation of the public employees, ICT infrastructure and skills, readiness of the stakeholders, competing priorities, lack of ownership and skills of managers and so on e-GP is not very common in developing countries. Change management, approaches to the e-procurement, organisational politics, stakeholders' role are some other critical areas that influence e-Procurement outcome.   Specially in South Asia, e-Procurement is at its infancy. Bangladesh is one of the pioneer countries in South Asia to embracing e-Procurement in the public sector. Since there is no such research in this area, specifically about the case of Bangladesh, the research has great significance. It has implications for both policy makers and knowledge domain of academia.  Using a qualitative case study approach, this research aims to understand whether e-Procurement has improved the governance of Bangladesh's public procurement process, and to explore the associated challenges including critical factors in implementing e-GP and possible ways to overcome those challenges.

The study reveals that e-Procurement in Bangladesh has received top-level political commitment to embrace e-GP systems across government. The newly introduced e-GP system has brought a wave of positive change to the public procurement process. Specifically, it has significantly improved the system in terms of openness, accessibility, timeliness and reduction of tender processing costs. Since the e-Government maturity stage of the country has not yet reached the transaction stage, the e-GP system faces limitations and e-payments are uncommon. As a consequence, improvements to public e-Procurement remain slow, incomplete and yet to be significant. In addition, a deep-rooted culture of corruption and collusion that is further supported and strengthened by political actors weaken the benefits driven by e-GP. A symbiotic form of procurement persists whereby e-GP driven positive changes and vested collusive groups both prevail in parallel. Consequently, there is a sense of mistrust towards public entities among general contractors and suppliers, which restricts their participation in e-GP. 

This research reiterates that commitment and ownership by sector-level public organisations, internalisation of the reform, and e-readiness, which includes responsive roles of suppliers and contractors, are the critical factors for successful adoption of e-Procurement in Bangladesh. It further reveals that political culture, public sector business processes and management principles need to be redesigned and practiced appropriately to create an e-ready environment within government. The research has implications for governments of developing countries, including Bangladesh, contractors, suppliers, donor agencies and citizens.