Departments to cut costs by buying online

PUBLISHED : Tuesday, 29 December, 2009, 12:00am
UPDATED : Tuesday, 29 December, 2009, 12:00am

The government is reforming its procurement system by introducing an electronic platform. The aim is to use less paper, expand the supplier base and streamline procedures.

A one-year pilot scheme was introduced for three departments in September, which the government expects could help save up to HK$5 million in procurement costs and cut transaction times by one-third.

Last year, the government spent HK$12 billion on goods, of which the Logistics Department spent HK$4 billion. Included in the spending of other departments was HK$4.3 billion on 'low-value' purchases, meaning items costing less than HK$1.43 million. These covered a range of goods, from stationery and batteries to computer accessories and audio-visual equipment. It takes about two weeks from a tendering process to delivery of such items.

Stephen Mak Hung-sung, deputy chief government information officer, who oversees the project, said the platform would first target these low-value purchases, and expansion of its scope might be considered in future.

Mak's office, which is responsible for the government's information technology, is among the first to test the system, along with the Immigration and the Environmental Protection departments.

The departments open tenders through the online platform and solicit quotations from a list of about 5,000 suppliers.

As the information can be made available to other departments, the platform may also be used to identify better bulk-buying bargains.

Mak said the three departments made about 24,000 'low-value' transactions last year, covering more than 100 items and comprising about 8 per cent of the government's purchases.

'We expect that each transaction can save up to HK$210, mostly from paper and other transaction costs,' he said, adding that transactions would be streamlined, with a span for a transaction down to about 10 days.

Mak said suppliers would find it easier to do business with the government using the platform, but they could also continue to use paper until the whole procurement system migrated to the internet.