EU public sector e-Procurement initiative delivers first phase of standard e-Procurement platform

A common standard for public sector e-procurement has come a step closer this month, enabling the pan-European exchange of electronic invoices and other business documents between the public and private sector.

Basware, a provider of purchase-to-pay solutions and a technical advisor on e-procurement for Pan European Public Procurement On-line (PEPPOL), has worked in conjunction with the Ministry of Finance in Finland to develop the technical specification and proof of concept for the platform, which is designed to help European companies participate on equal terms in European Union (EU)-wide public sector competitive bidding.

PEPPOL has been in development since May 2008 and is driven by the European Commission and a consortium of 19 representatives from 13 countries. This EU-wide initiative aims to increase transparency and efficiency of public sector procurement, ultimately enabling any company, including small and midsize enterprises (SMEs), to respond to published public-tender notices electronically, send other electronic documents to public institutions and to govern the entire procurement process from their own national infrastructure to other national infrastructures.

The project is closely linked to the realization of the EU service directive and to improving inner-market efficiency within the union. The total budget for the project is 30.8 million euros and is due to be completed at the end of 2010.

“While governments are the largest buyers in the EU, they are lagging behind major industry in electronic data exchange with suppliers,” said Esa Tihilä, a senior vice president with Basware. “Our own Basware Connectivity services allow buyers and suppliers in the private sector to easily exchange electronic documents, so we are in a great position to advise on best practices for creating the European standard for borderless e-procurement.”

Tihilä said that companies that already have electronic solutions in place will be best equipped to benefit from this new EU platform. “We have been working closely with the Ministry of Finance in Finland and PEPPOL working groups to create the technical specifications that will enable interoperability through common transport, content and business process standards, and we anticipate great things as we move toward the pilot phase of the project,” Tihilä said.

At the moment, there is very little purchasing taking place across borders in the EU public sector, and, according to Olli-Pekka Rissanen, special adviser at the Ministry of Finance in Finland, the PEPPOL project is one key element in driving a change to this.

“In order to compete effectively, it is important that EU states improve public sector capability to share documents electronically,” Rissanen said. “PEPPOL is a collaborative project designed to enhance competitiveness and increase efficiency of EU public sector procurement processes. Based on a common platform, PEPPOL will eventually enable the private sector to utilize the network as well as make it much easier for SMEs to do business outside of their own countries, opening new markets to this sector.”

The new procurement infrastructure is expected to be in operation by the end of 2010. Based on open standards, the infrastructure will be independent of operators, which will help ensure open price competition. In addition to Finland, the consortium supporting the project includes Norway, Denmark, Germany, United Kingdom, Austria, Hungary and Italy.

Article Supply & Demand Chain