Best practice Surabaya, Indonesia 3.89 MB
Best Practice Summary
Best Practice Title:
The implementation of EProcurement in Surabaya City
Aspect of Governance:
Thematic Area 2:
1) Agus Imam Sonhaji, ST, MMT
(Head of Evaluation and Reporting
Sub-Division in Development
Division of Surabaya City
Jalan Jimerto 25-27 4th Fl.
Tel: 62-31-5312144 ext. 554
HP: 0811 311374
E-mail: [email protected]
2) Ir. Antiek Sugiharti, M.Si
(Head of Urban Sub-Division in
Government Division of Surabaya
Jalan Jimerto 25-27 5th Fl.
HP: 0811 334442
E-mail: [email protected]hoo.com
Address: Century Tower Lt. 10 R.
1006, Jl. H.R. Rasuna Said Kav. X-
2, No. 4, Jakarta 12950
Email: [email protected]
Surabaya is the capital of East Java Province and the second largest city and
port in Indonesia, as well as one of the oldest cities in the country. It has a
population of more than 2.5 million people and is experiencing fast growth as a
city of culture, education, tourism, maritime, industry and trade.
However, Surabaya was suffering from old-fashioned government and
procurement systems whereas the reform era required transparency and
openness in the government system to realize the principles of good
governance. There was strong demand for better public services to be provided
by the regional government and the city government therefore decided to take
a new approach to the procurement of goods and services in Surabaya to
increase the effectiveness and efficiency of its budget management.
The lack of transparency was partly due to the fact that most providers of
goods and services for the city government’s agencies were companies that had
close connections to top officials within the local government. That meant that
there was a lack of transparency in the awarding of contracts and that projects
were often more expensive than had been budgeted for and not finished on
There was, therefore, a need for a system that made the procurement process
more transparent and therefore fairer. An electronic system seemed to a good
In the beginning of 2003, based on the Presidential Decision No. 18/2000 on
Guidelines on Procurement of Goods/Services of Government Agencies,
Surabaya City Government facilitated a process of electronic prequalification.
For that purpose, the www.lelangserentak.com portal was opened.
In the beginning of 2004, based on Presidential Decision No. 80/2003,
Surabaya City Government refined the goods/service procurement system in
the form of e-Procurement (e-Proc), which was known as Se-PS (Surabaya eProcurement System). The system refinement was applied in www.surabayaeproc.or.id portal.
The main objective of the introduction of an e-procurement system was to
increase public satisfaction with the procurement of goods and services by
awarding contracts in a transparent and fair manner.
To have a comprehensive system of electronic procurements in place
throughout Surabaya local government agencies;
To save on the costs of public procurement of goods and services;
To ensure faster and more efficient delivery of goods and services.
The tender service using the e-procurement system (Se-Ps) is used by
28 agencies (23 dinas and 5 badan), 4 offices and 9 divisions within the
Regional Secretariat and the Council Secretariat of Surabaya City
Savings: Through competition in the bidding process, the city
government has managed to save up to 25% of the original budget for
public works and services. There are also savings through the fact that
the process is now paperless.
Accelerated service: The delivery of goods and services has become
faster and more efficient. Through performance-based budgeting,
efficiency can be reached by increasing the performance target, i.e.
more can be produced/delivered for the same amount of money. The
time it takes for any project to be finished, i.e. goods and services
delivered, has also decreased.
A welcome side effect of the new process is that procurement
committees and budget officials can avoid allegations of corruption since
the whole process takes place in an open and transparent manner.
The site averages 50,000 daily hits and was visited by at least 85,000
people in the first year of operation.
The project won numerous awards:
Jawa Pos Institute of Pro-Otonomi for the category of Region in Leading
Profile on Public Accountability on April 28, 2004.
E-Government Award from Warta Ekonomi Magazine in 2004.
Obtaining ISO 9001: 2000 certificate for Quality Management System on
March 4, 2004.
Jawa Pos Institute of Pro-Otonomi for the category of Region in Leading
Profile on Public Accountability on May 4, 2005.
a. Establishment of the Secretariat of E-Procurement Services of
Surabaya City Government to provide supporting facilities and
infrastructure to procurement committees and goods/services
b. Preparing a decision from the Regional Head on technical guidelines
and procedures on e-procurement implementation.
c. Conducting internal training for goods/services procurement
d. Communicating the new system to goods and services providers.
a. Establishing the Center for E-Procurement On-Line Data Services in
Surabaya City Hall to have a meeting facility for goods/services
providers. Access to the e-procurement site is provided there, as well
as short training courses on the procedure of how to participate in eprocurement in Surabaya.
b. Setting up and operating the integrated on-line helpdesk for
goods/services providers that need guidance for their participation in
c. Co-operating with groups of goods and services providers from small
companies to build the E-Procurement Data Service Center. The
system has been designed specifically to make access to
procurement easier for small companies and to allow easy access 24hours a day.
d. Coordination with stakeholders, particularly the association of
goods/services providers as well as national and regional
construction services provider associations.
3. E-Procurement system application
a. The e-procurement system application was developed from the
tender procedure in the Presidential Decision No. 80 Year 2003 on
the Implementation Guidelines of Government Goods/Service
b. The system application was divided into three main menus, one for
for goods/services providers, one for procurement committees and
one for system administrator. Each menu has certain access code to
maintain data and process secrecy.
4. Supporting infrastructure
Supporting infrastructures that needed to be prepared were:
a. The provision of a special server for the e-procurement
administrator. Various security facilities were placed in this main
hardware, including access control to the main server.
b. Local Area Network across units of government agencies to support
the performance of procurement committees.
c. Preparation of back-up data that is always identical with the mother
server in Surabaya City Government and is placed in IIE (Indonesian
Internet Exchange) so that the security and speed of access are
5. Implementation management
a. To improve the quality of services of procurement committees and
goods/service providers as the main customers and the general
public who want to use information on the implementation of tender
of work packages within Surabaya City Government, the Secretariat
of e-Procurement Services as web administrator as well as
coordinator of tender implementation supporting activity took the
ISO 9001:2000 certification for Quality Management System.
b. In order to protect the implementation of e-procurement from
problems with intellectual property rights, Surabaya City Government
registered the right for the creation of the e-procurement application
with the Ministry of Justice.
6. Functioning of tender process through the e-procurement system
The tender process stages in the e-procurement facilities in www.surabayaeproc.or.id portal include:
a. The tender process is coordinated by the Regional Secretariat that
has established a Secretariat of E-Procurement Services.
b. Working Units independently determine the work package that will be
tendered and conducted through e-procurement by using the portal.
All document belong to that particular procurement will be put up on
c. Goods/services providers can register with the official e-procurement
portal by providing the e-mail address and the tax identification
number of their company. The portal will automatically respond and
send a password by e-mail.
d. The password allows users to participate in the further process of the
tender (filling in qualification data and the work package the provider
is interested in) and constitutes one data security function in the
e. The goods/services providers may now download the procurement
The providers will choose between different work packages on offer
and decide on the one where their qualifications meet the criteria and
bid a price proposal that will automatically be encrypted by the portal
g. The bidding documents can only be opened by the tender committee
of each working unit. An evaluation is then conducted to determine
h. All tender participants as well as the public can see the results of the
evaluation on the proposed bids in the portal.
Openness and transparency has allowed all parties (small, medium and
large companies) to participate in the tender of goods/service
The more providers join the bidding, the more alternatives are available
for the procurement committees/users.
With an open tender, the providers will try to improve the quality of the
goods/services offered with competitive prices. The benefit obtained by
the city government is procurement of goods/services of good quality for
relatively low prices, leading to budget efficiency.
Once the e-procurement system had been set up, the running costs are
relatively low (technical support and help-line), so that they can be covered
within the existing local budget. The savings achieved trough the use of the
system are such that it easily pays for itself.
Plans to develop the service further to improve the performance and public
confidence in the process include:
Increasing public confidence in the information security system by ISO
BS: 7799 certification on Information Security Management System
Adding facilities of tender information and transaction for goods/service
providers and the public through the media of cellular phone (GSM) or
Cooperating with the national government (Bappenas) in developing
electronic Goods/Service Procurement Services that can be integrated
across government institutions.
This programme can easily be replicated by all government agencies at
both national and local levels as its operational procedures refer to the
Presidential Decision no. 80/2003.
The system has already become one of e-procurement service providers
for regional government that assesses that organizing e-procurement
independently is neither efficient nor effective.
Since the end of the project phase in 2005, it has been agreed that the
e-procurement system will later be installed for free in other places in
cooperation with Surabaya City Government or other appointed parties.
Regional governments will only have to provide hardware and personnel
to be trained to manage the system.
Picture 1: Workshop on e-procurement system, September 2004
Picture 2: Acceptance of e-government award from Warta Ekonomi Magazine