Online Purchase System Boosts Transparency

Eight years after this south China metropolis set up an online procurement system, official statistics suggest the city government has become more transparent and efficient.

Since the policy was introduced, the city has saved more than 3.8 billion yuan (US$598 million), according to the Shenzhen procurement center's work report to the Central Commission for Discipline Inspection of the Communist Party of China.

As one of seven pilot cities in the country's procurement innovation project, led by the Office of the Central Leading Group on Financial and Economic Affairs, the city has made all purchases using its online system, said Ye Jianming, director of the procurement center.

The system handles bid invitations, and bidding and evaluation processes operated separately by the center, project leaders, bidders and experts, he said.

"The system has saved a lot of paper and time, as bidders can directly download application forms and submit them - they no longer need to visit our office several times with bunches of documents," Ye said. "And since what they download are standard forms, it has also saved us a lot of energy and cost."

Lin Miao, a standing committee member of the city's Party discipline inspection committee, one of the center's supervising departments, said the system is an achievement.

"It contributes greatly to transparency and preventing corruption," he said.

Ye added: "We have a special line so that supervisors can directly collect data from the system and supervise operations in real time."

Zhao Qifeng, bidding evaluation administrator, said he recently evaluated the purchase of arthroscopic equipment for Peking University's Shenzhen Hospital.

"An evaluation normally includes four experts randomly generated from our expert database and the project leader; they carry it out inside one of our evaluation rooms, all monitored," he said. "Smaller evaluations take half a day, bigger ones several days."

Zhang Wentao, a hospital doctor in the city's Longgang district who was one of four experts judging the bidding process, said he marked the five bidders according to standards set in the system and his own clinical experience.

"To make the evaluation fairer, experts don't have the final say on who wins," said Ye Jianming. "They each choose three bidders as candidates, and the final say is given to project leaders. Otherwise it goes to a draw or another round of competitive bidding."

In 2009, the city's procurement center piloted a new way to purchase electrical and digital products in Bao'an district. The center opened bidding to chain stores and set a discount rate with the winner, so that project leaders can simply choose products directly from the winners' online stores. The chains chosen were Suning, Gome, Sundan and Rainbow.

"One advantage of chain store supply is it stops manufacturers from providing special models for the government to push up the price," Ye said. He added the center is rolling out the method to all districts.

As of July this year, the system had 2,122 registered project leaders, more than 19,000 suppliers and 5,500 evaluation experts. It has completed more than 3,000 procurements a year and has been visited 22.6 million times.

The total cost of procurements from 2003 to the end of last year was 38.77 billion yuan, according to figures provided by the center.

Shenzhen was the first to implement local legislation on government procurement in 1999. Ye said a revision of the existing rules by the city's finance committee and legislative affairs office went through a second review in October, and the new regulations are expected to take effect next year.