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Government e-procurement trial concludes

9 December 2003 Media Statement

Government e-procurement trial concludes

State Services Minister Trevor Mallard announced today the completion of GoProcure, the trial of an online procurement system that allowed government agencies to access suppliers' goods and services through one electronic transaction 'hub'.

Trevor Mallard said that while the vendors, CGNZ Limited, successfully completed the trial on time and on budget, and that the system performed well, the project will be concluded and GoProcure will not proceed to the next phase.

"The trial found that only a small number of government agencies and suppliers will benefit in the short term from using GoProcure. It is likely that by the time more agencies are ready to use GoProcure, there will be other alternatives to provide these services, and government leadership in this area will no longer be required," Trevor Mallard said.

“The project showed some agencies need to focus on more basic procurement improvement initiatives, and on working with other agencies to buy more effectively. The new Syndicated Procurement Unit of the State Services Commission will now work to promote the benefits of inter-agency collaboration.

“Large government agencies will continue with e-commerce using direct electronic links with their suppliers, or using other procurement hubs."

GoProcure was tested with two government agencies:
- the New Zealand Police used GoProcure to process purchase orders and invoices on-line with three major suppliers; and,
- the University of Auckland used GoProcure to access and update on-line catalogues from suppliers.

“This project was deliberately broken into a number of distinct phases and decision points. This is good practice with complex or large information technology projects,” Trevor Mallard said.

“It gives the government the opportunity to limit its risk exposure whilst trying out innovative solutions in an environment that does not involve a long-term commitment.

“Experience gained from this project will allow the E-government Unit of SSC to
initiate a process that will investigate the possibility of publishing e-GIF standards to assist electronic communication between agencies and suppliers in the future.

“Work continues on the overall e-government programme. The Government is committed to e-government and the benefits putting government services on-line offers New Zealanders."

Questions and Answers

What is GoProcure?

GoProcure is an on-line procurement hub, which holds electronic supplier catalogues of goods and services. Buying agencies access these catalogues, and transactions such as purchase orders and invoices are passed electronically between buying agencies and suppliers.

A procurement hub can offer advantages over arrangements where buyers and suppliers establish direct electronic links (i.e. not through a hub). A hub can allow suppliers to establish and maintain only one catalogue, and establish only one interface to sell electronically to many buyers.

With the small number of government agencies and suppliers currently ready to use a hub, direct point-to-point links between agencies and suppliers are more cost effective than GoProcure.

What has happened in the project to date?

GoProcure was originally scoped with three different options for up to 90 government agencies to use a electronic procurement system. The purpose of the project’s pilot phase was to determine the feasibility of implementing these different options.

In June 2003 it was announced that the “Full Suite” option, involving delivering internal procurement automation to agencies over the Internet, would be too difficult to implement at the current time.

GoProcure was therefore scaled back to focus on the core procurement hub, which has been trialled with the Police and the University of Auckland.

What has the GoProcure trial cost?

The GoProcure trial has cost $2 million.


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