ARTICLE IN PRESS

Int. J. Production Economics 90 (2004) 79–102

An e-procurement system for governmental purchasing

Nikolaos A. Panayiotou*, Sotiris P. Gayialis, Ilias P. Tatsiopoulos
Section of Industrial Management and Operational Research, Faculty of Mechanical Engineering,
National Technical University of Athens, 157 80 Zografos, Greece

Received 15 April 2002; accepted 10 April 2003

Abstract

During the last few years, a large number of new procurement business models has been developed, mostly
concerning companies operating in the private sector. Their main objective is the introduction of new technologies such
as e-business for the fulfilment of the procurement process of indirect goods. Lately, such models are also developed for
organisations operating in the public sector all over Europe. This paper presents a case study concerning the analysis of
the Greek governmental purchasing process carried out from the General Secretariat of Commerce, part of the Ministry
of Development and the functions’ definition of the new e-procurement system. The methodological approach as well as
the tools used are analysed and the achieved results are presented. The objective of the analysis is the identification of
potential problematic areas and the design of new processes in order to maximise the possibilities of a successful
implementation of a new e-procurement system. The outcome of the new process design enabled the definition of the
analytical functional specifications of the appropriate solution.
r 2003 Published by Elsevier Science B.V.

Keywords: Supply chain management; E-procurement; Public sector; Governmental purchasing; Case study

1. Introduction transaction cost, making better decisions and

E-procurement solutions, the Internet technol-
ogy platforms and services that make corporate
purchasing activities more efficient and cost
effective are moving from the early adopter stage
to rapid adoption by mainstream companies.
E-procurement—the purchase and payment of
goods and services—can assist the Government
to improve the way it does its business by reducing
*Corresponding author. Tel.: +30-210-7721195; fax: +30-
210-7723571.
E-mail addresses: panayiot@central.ntua.gr
(N.A. Panayiotou), sotga@central.ntua.gr (S.P. Gayialis),
itat@central.ntua.gr (I.P. Tatsiopoulos).
getting more value. The primary role of the private
sector in driving the transition to e-commerce is
well recognised. The Government can also influ-
ence uptake of e-commerce for its own transac-
tions with business and achieve flow through
effects to influence the environment in which
business-to-business (B2B) transactions take place.
Government agencies need to operate flexibly to
take advantage of the efficiency gains likely to
result from the evolution of new business models.
Public sector has recently started to use the new
purchasing business models for the procurement of
indirect goods. More and more Governments are
adopting new technologies for the public procure-
ment in order to achieve benefits that have already

0925-5273/03/$ - see front matter r 2003 Published by Elsevier Science B.V.

doi:10.1016/S0925-5273(03)00103-8
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80 N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102
been realised for the companies of the private
sector. The prerequisites for the integration of the
new technologies at Governmental purchasing are
the analysis and improvement of the existing
business processes, the systems and the organisa-
tion structures of the entity that execute the public
procurement.
In this paper, a case of a successful implementa-
tion of a methodology for the assessment of the
functional specifications for the e-procurement
system for governmental purchasing is described.
The definition of the appropriate functional
specification determines, to a large extent, the
success of the e-procurement system to be intro-
duced. The paper presents the analysis of the
Greek governmental purchasing process carried
out by an academic team, members of the Section
of Industrial Management and Operational Re-
search of the National Technical University of
Athens on behalf of the General Secretariat of
Commerce, part of the Greek Ministry of Devel-
opment. The analysis was followed by the identi-
fication of the problematic areas, the design of the
improved business processes and the determina-
tion of the functional specifications of the govern-
mental purchasing solution.
After providing a short review of the e-procure-
ment advancement both in the private and the
public sector, the paper presents the followed
methodological approach with the tools used, an
overview of the Greek Governmental Purchasing
System and the definition of the objectives of the
new system which can be summarised as follows:
more efficient process, higher quality of procured
goods, shorter lead times and reduced cost without
passing over the need for transparency. The
description of the analysis of the existing procure-
ment process follows, concerning three important
areas: the organisational structure, the procure-
ment sub-process and activities, and the informa-
tion infrastructure. The identified problematic
areas that could be improved and was based on
the analysis results are described as the outcomes
of a qualitative and a quantitative analysis. The
new procurement process is provided in the form
of three alternative scenarios based on different
levels of organisational changes and technological
solutions introduced. Finally, the functional spe-
cifications of the qualified scenario are defined
covering both the specific needs of governmental
purchasing at present and in the future (electronic
marketplaces, electronic catalogues and reverse
auctions).
2. Literature review
Procurement is an integral part of B2B processes
and an essential part of any organisation’s ability
to function effectively but has only recently
emerged as an important topic within the fast-
growing B2B e-commerce market. An e-procure-
ment B2B system is an open system that enables
the organisation to reach and transact with
suppliers and customers in virtual markets (Bakos,
1997). With the introduction of cheaper web-based
B2B e-commerce technologies, online procurement
has become today commercially feasible (Data-
monitor, 2000). The online procurement market is
of great significance since it offers opportunities to
a different range of companies from those which
have implemented EDI. E-procurement is a user-
friendly, Internet-based purchasing system that
offers electronic purchase order processing and
enhanced administrative functions to buyers
and suppliers, resulting in operational efficiencies
and potential cost savings. The e-procurement
service features the most modern business and
commercial practices from the private sector and
the most current technical capabilities offered by
the Internet that will provide cost-saving oppor-
tunities to both suppliers and the government
(Erridge et al., 2001).
As a result, the term ‘‘e-procurement’’ has
become a subject of discussions in both the private
and the public sector. Researchers have found that
Inter-Organisational Information Systems can
enable firms to make significant improvements in
the efficiency of their procurement processes. For
example, Mukhopadhyay et al. (1995) report on
the effects of Chrysler Corporation’s adoption of
EDI systems. Their results show that the firm
obtains approximately $100 in savings per vehicle,
attributable solely to electronic document prepara-
tion and better information exchange. Similarly,
Choudhury (1998) show that electronic markets
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N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102
can also improve purchasing efficiency in the
aircraft parts industry. Moreover, several authors
show that with the success of Information and
Communication Technologies (ICT)—particularly
the Internet—organisational transformations
are taking place in industries and companies
(Dubosson-Torbay et al., 2001; Martinez, 2000;
Tapscott et al., 1999; Timmers, 1998).
The adopters of e-procurement systems world-
wide, such as Cisco, Chevron and Eastman
Chemicals, demonstrated substantial improvement
in several ways (Andersen Consulting, 2000). The
potential benefits can be numerous, the most
important of which are summarised as follows:
* Improved control of vendor relationships.
* Accurate fulfilment of the processes.
* Improved effectiveness of the purchasing
process.
* Achievement of higher service levels.
* Reduced prices from the key suppliers.
* Reduced inventory carrying cost.
* Reduction of the order cycle.
It is also essential to bear in mind that the
procurement process covers a wide spectrum of
activity from ordering routine indirect goods,
where there is a good fit with automated
e-procurement marketplace solutions at one end,
through to more complex procurement of out-
sourced services, where e-procurement can support
the integration of entire supply chains and
collaboration with partners. A typical e-procure-
ment system affects the whole requisition process
(Dai and Kauffman, 2001).
In recent years, e-procurement has been viewed
as an opportunity for efficiency gains in the public
sector. Business-to-government (B2G) e-procure-
ment, in the framework of e-government, reduces
the cost of issuing invoices and other adminis-
trative work for low-value, high-volume goods
(this is mostly the case of Greek public procure-
ment carried out by the General Secretariat of
Commerce). However, the largest potential saving
originates from lower prices due to centralised
spending. The framework of e-government also
includes the connections of government and
administration with the civilians and the compa-
81
nies (G2C, G2B and B2A), where the main
objective is not the minimisation of cost but the
achievement of better service levels.
The appeal of e-procurement to both the public
and private sectors is the expectation of improved
efficiency. Nearly everyone recognises the Inter-
net’s vast potential to remake government. Since
the dawn of the Web, public officials have
promoted the notion that online transactions
between agencies and their constituents and
business partners will spark huge gains in govern-
ment efficiency and user-friendliness (Towns,
2001).
Taking the example of the UK into account, the
gains in the public sector was reinforced by the
Office of Government Commerce (OGC), which
has encouraged the increased use of e-commerce
across government departments. Its original target
for e-procurement was that 90% of all low-value
purchase orders were to be e-enabled by the end
of 2001, although the targets did not specify
that web-based technology should be used. The
target is therefore open to interpretation but
adopted solutions all over the world demonstrate
that real efficiencies will only be achieved if
web-based procurement systems are implemented
in a focused way.
The bottom line is that many inside and outside
government wish more public sector e-procure-
ment systems were in place to bring buyers and
sellers together as quickly and easily as B2B
e-commerce. When the electronic revolution first
began, some expected it to rapidly spread across
the entire governmental landscape. Such expecta-
tions were based, at least in part, on the sharp rate
of Internet use by individuals and businesses.
Others were a bit more cautious from the start,
well aware of a historical distrust between the
public and private sectors (MacManus, 1992;
Sinclair, 2000) and/or of the incremental nature
of public policy implementation, especially in a
very complex inter- and intra-governmental orga-
nisational system (Peters, 1999).
The success of an e-procurement system requires
efficient processes both at the level of the supplier–
purchaser relationship and the level of internal
workflow. The transition from the traditional pro-
curement to e-procurement requires the analysis
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82 N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102
and design of new processes in order to minimise
the meaningless information circulation (due to
bureaucratic documents exchange), the definition
of clear and discernible job descriptions and the
economical procurement of goods within defined
deadlines. A successful transition, especially when
talking about the government, is subject to a large
number of constraints that have to be taken into
account, mostly placed by laws, which try to
guarantee the transparent administration of public
wealth (Arrowsmith and Arwel, 1998).
A governmental purchasing system has similar
characteristics with that of a private sector’s
company due to the fact that the basic goal of
procurement is to find sources of the supplies when
it is necessary at a potential cheapest price and
between acceptable limits of quality.
Despite these similarities governmental purchas-
ing differs from private by many aspects (Bright,
1994; Gordon, 1996):
* The governmental purchasing system adminis-
trates the money that belong ‘‘to all’’ and the
supply of goods must serve the public wealth.
* There are prescribed procedures that result
from a number of laws, directives, directions,
judgements, and administrative or political
decisions.
* The variety and the number of the purchased
products are greater for the public sector. Also
the number of customers (governmental agen-
cies) and the suppliers of the governmental
purchasing system is excessively large.
* The transparency is the basic requirement of the
public sector’s purchasing procedures. The
suppliers’ objections are the common practice.
* The unified public procurement plan for all
governmental agencies and the information
exchange between them is not usual for the
private sector.
For the above reasons, it is important to have in
mind that public sector organisations must avoid
following private sector business models when it
comes to e-procurement. Instead they need to
build a model and business case that optimises
their specific service objectives and considers the
impact on processes across the organisation.
Besides, the procurement models for the public
sector differs between countries as the purchasing
process is realised under specific directions and, in
many cases, includes specific activities.
The design of the appropriate purchasing
processes helps the determination of the proper
functional specifications. Functions are capabil-
ities of the e-procurement system that permit
organisations to aggregate disparate sources of
information in one consolidated view as well as to
facilitate the review and acquisition of goods. In
addition, functions may enable organisations to
better understand specific procurement patterns.
This knowledge allows for effective negotiations
with suppliers. Organisations should address key
functional areas such as those presented in Fig. 1
(Gartnet Group RAS Services, 2000). The defini-
tion of the appropriate functional specification
determines, to a large extent, the success of the
e-procurement system to be introduced.
3. Case study
3.1. Methodological approach
The case study presented in this paper examines
the analysis of the governmental purchasing
process and the definition of the functional
specifications of the new e-procurement system,
undertaken by the Section of Industrial Manage-
ment and Operational Research of the National
Technical University of Athens on behalf of the
General Secretariat of Commerce in Greece. The
objective of the analysis is the identification of
potential problematic areas and the design of the
new process in order to define the appropriate
functional specifications and maximise the possi-
bilities of a successful implementation of a new
e-procurement system.
The methodology followed in the case of the
Greek governmental purchasing process included
the modelling of the existing process that con-
tained the analysis of the organisation structure of
the General Direction of Public Procurement, the
analytical process modelling in three hierarchical
levels, the document flow representation and the
identification of the current information system
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N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102 83

Functions

Product Payment Process

Catalogues Payment Processors Shipping & Handling

Product Database Taxation Customer Service

Data Translation Workflow

Shopping Basket Self-service

Optimisation Tools Technical Architecture Management Tools

Analysis Environment Security

Configuration GUI Backup & Recovery

Scaleability Performance Tuning

Development
Capability Reports

Internationalisation

Fig. 1. Taxonomy of functions in e-procurement applications.

infrastructure. The methodology was supported by
the use of specialised process modelling and
workflow tools. Both qualitative and quantitative
analyses were used in order to successfully identity
the existing problematic areas. A set of perfor-
mance indicators was defined including mean cycle
times, transaction volumes (quantities, values,
number of requests and tenders) and organisa-
tional units capacities. The results of the analysis
guided to the reengineering suggestions in three
levels of changes and to the design of the new
process with the use of process charts. The
functional specifications definition was based
on the new system design and the overall findings
of the analysis. The methodology followed is
presented in Fig. 2.
The three first stages of the methodology are in
opposition to what Hammer and Champy (1993)
describe as the way to achieve business process
reengineering (BPR), through radical or dramatic
changes and new way of thinking about business
processes without taking into account the existing
ones. However, BPR in the public sector is very
difficult to be achieved in the way Hammer and
Champy (1993) describe and the reengineering
attempts fail due to the following main reasons
(Kock and McQueen, 1996):
* The effect of the political environment in
attaining objective goals.
* The gradual shift of the focus of the organisa-
tion from core business process redesign to
problem solving and automation of existing
processes.
* The hiding of failure signs. This is happening
consciously at first, for self-preservation rea-
sons, but later becomes unconscious and is
reinforced by social-facilitation.
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84 N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102

PUBLIC RE-ENGINEERING
PROBLEMATIC ASSESSMENT OF
PROCUREMENT SUGGESTIONS
AREAS FUNCTIONAL
AS-IS MODELING & NEW
IDENTIFICATION SPECIFICATIONS
BUSINESS MODEL

ORGANISATION PROCESSES INFORMATION CONSERVA MIDDLE RADICAL 3-LEVEL

INFRA- & SYSTEMS INFRA- -TIVE LEVEL CHANGES FUNCTIONAL
STRUCTURE ACTIVITIES STRUCTURE CHANGES CHANGES SPECS

Interviews, Historical Data Best Practices, Constraints -Functional

Specifications
-Organization -Process Charts -Automated & -Processes & - Processes & -Organization
Tree
-AS-IS Process Charts
Chart Manual Activities Activities Activities Infrastructure
-Fishbone Diagrams

-Process -Functional
-Statistical Analysis

Diagrams -Organization -Organization -Processes &

Specifications
Descriptions Infrastructure Infrastructure Activities
-Maltese Cross Descriptions
-Deployment (Committees) -Information -Information
Diagrams
-Information Systems Systems
Charts
Systems Infrastructure Infrastructure
Infrastructure

Fig. 2. The methodology for the assessment of the functional specifications.

Usually, public sector organisations are faced
with challenges differing from challenges for
private firms. They have to meet multiple, often
conflicting goals, and they are subject to con-
straints of financial, legal, contractual, personnel
and institutional nature (Cilek et al., 2001).
Normally these constraints are much more binding
than they are in private sector. For example, there
might be no possibility to reduce the staff
according to a new situation due to legislative
constraints (Kock and McQueen, 1996; Luck and
Peabody, 2000).
The radical process-focused change in public
sector organisations can only be achieved with
deep changes in their bureaucratic practices. This,
in turn, normally cannot be achieved without
either changes in the law or privatisation (Jensen,
1991; Mechling, 1994).
The methodology followed in the Greek govern-
mental purchasing system is not far from what
Harrington (1991) describes as business process
improvement (BPI), emphasising on quality and
productivity improvement, bureaucracy elimina-
tion, process simplification and processing time
reduction.
3.2. Greek governmental purchasing system’s
overview
The responsible organisation for the execution
of the Greek governmental purchasing (otherwise
called public procurement) is the General Direc-
tion of Public Procurement of the General
Secretariat of Commerce, part of the Ministry of
Development which is organised in five divisions.
Each of the 12 departments of the three Procure-
ment Divisions is responsible for the procurement
of specific goods. The Division of Procurement
Policy and the Technical Division are responsible
to support the tendering procedure which is
carried out by the other three divisions. Fourteen
committees support all the individual steps of the
purchasing process for transparency purposes.
The Greek governmental purchasing system can
be characterised as a mixed system (both centra-
lised and decentralised) as far as the execution of
the tenders and the contracts are concerned. The
Public Procurement Plan (PPP) is created on a
yearly basis and includes all the requisitions for
procurement of the Greek governmental agencies
(ministries, hospitals, military and generally all
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N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102
public organisations), in the form of agencies’
requisitions for procurement. The collection of
requisitions is followed by a tendering procedure,
performed either centrally (by the General Direc-
tion of Public Procurement) or by the govern-
mental agencies that requested the goods, in
the case they have the appropriate authorisation.
The tendering procedure usually results to a
contract with a supplier that is controlled by
the organisation that carried out the tenders.
Five hundred and 90 governmental agencies are
authorised to place requisitions in the govern-
mental purchasing system and about 200 of
them are included at the Public Procurement Plan
every year. Sixty percent of the total amount of
the PPP is related to procurement authorised to
be carried out by the governmental agencies
themselves.
All the tenders that are managed by the General
Secretariat of Commerce and that are included in
the PPP concern a wide range of goods (from food,
medication, clothes, to vehicles and trains). The
goods that are included in the PPP every year are
about two thousands (average value) and the total
number of the goods procured by the government
agencies is about nine thousands. The General
Direction of Public Procurement manages the
procurement of low- or medium-value goods,
and a specialised committee manages the procure-
ment of high-value goods. The PPP does not
include procurement of services or works and
military weapons or equipment. Services can be
included only in the cases that these are integral
part of the procurement of goods. High capital
works are managed by the Ministry of Public
Works.
Every supplier, which satisfies the qualifications
defined by the laws, can participate in the open
tendering procedure. The suppliers that usually
participate in the restricted tendering process are
qualified small-to-medium enterprises (SMEs).
Specific activities of governmental purchasing
process, the organisation chart of the General
Direction of Public Procurement, the formulation
of the various committees, the minimum lead times
and several terms and rules are specified by the
legal framework and changes in these areas are
restricted by legislative constraints.
85
3.3. Objectives definition of the new system
The definition of the required functional speci-
fications should be in line with a well-defined set of
objectives. The General Secretariat of Commerce
should generate these objectives, after taking into
account the critical success factors (CSFs) and the
key performance indicators (KPIs) of governmen-
tal e-procurement systems. Case studies concern-
ing the introduction of similar systems in other
counties (in Europe, the USA and Australia)
helped in the definition of the following CSFs:
* Efficient processes without excessive idle times.
* Existence of monitoring and evaluation systems
that permit the continuous improvement of the
processes.
* Adequate training of the employees in order to
enable them take advantage of the new system.
The above CSFs were coupled by a set of KPIs
that should be monitored, the most important of
which are the following:
* Tender lead times.
* Percentage of governmental purchasing with
accepted quality (in accordance with the pre-
defined technical specifications).
* Productivity of resources (both human re-
sources and information systems).
* Budget accuracy (deviation of the actual
governmental purchasing compared with the
related budget).
* Cost (including all the relevant cost categories,
together with the cost of the purchased goods or
services).
The combination of the recognised CSFs and
KPIs, supported by the clear vision of the General
Secretariat of Commerce, enabled the definition of
the objectives of the governmental purchasing
system:
* The procurement of quality goods and inte-
grated services.
* The realisation of short activity lead times of
the governmental purchasing process.
* The transparent administration of public
wealth.
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86 N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102
* The minimisation of cost, taking into account
the existing legal framework in Greece, such as
restrictions in reducing the workforce, or
changing the organisation chart.
The framework followed for the objectives
definition of the new procurement system is
depicted in Fig. 3.
3.4. Analysis of the existing procurement process
The analysis of the existing public procurement
process was the first stage of the methodology
followed. The analysis focused on three important
areas:
* Existing organisational structure: The current
organisation chart was reviewed, with the help
of relevant material provided by the General
Secretarial of Commerce and the completion of
interviews with all the General Officers. The
organisational chart was supported by the
description of the main activities undertaken
by each organisational unit, their staff levels
and the committees held on a regular basis.
* Processes and activities: Based on information
collected after the completion of interviews held
with employees of all management levels, past
Critical • Efficient Processes
Success • Existence of monitoring & evaluation
Factors systems
• Training
Critical Success
Vision
Factors
Key
Performance
Indicators
Fig. 3. CSFs, KPIs and objectives of governmental purchasing system.
reports generated by the General Secretariat of
Commerce (historical data) and previous ana-
lysis on the Greek Public procurement system
(Gayialis and Haikali, 1997), nine main sub-
processes, one repetitive sub-process of suppli-
ers’ objections and a 160 activities (including
the controls) were identified. The nine main
sub-processes are depicted in Fig. 4, which
represents the first level analysis of the Greek
governmental purchasing process. The third
sub-process: ‘‘available suppliers pre-selection’’
concerns only the restricted tenders. Each sub-
process was further analysed and was graphi-
cally illustrated with the use of process charts,
which in our case were sub-process charts
(second level of process analysis). Fig. 5
illustrates the process chart for the sub-process:
‘‘evaluation of technical proposals’’. Table 1,
in the appendix, contains all the activities of
the second level sub-process charts and the
corresponding responsible department for each
one of them.
* Moreover, a detailed sub-process description
was created for each one of the sub-processes
including their objectives, their application
areas, inputs, outputs, the involved depart-
ments, the supporting information systems used
Objectives
• Procurement goods & services quality
• Short lead times
• Transparent administration of public
wealth
• Minimisation of cost
Key Required
Performance Objectives Functional
Specifications
Indicators
• Tender lead times
• % of procurement with accepted quality
• Productivity of resources
• Budget accuracy
• Cost
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N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102 87

Inputs Sub-processes Outputs

Budget 1. Preparation 2. RFP’s 3. Available Goods and

of the Public Suppliers
Procurement Preparation & Services
Governmental Publication Pre-
Plan Requested
Agencies Selection
Open Tenders
On Hand Restricted Tenders RFPs
Inventories
and Credits Supply
4. Proposals 5. Suppliers’ Contracts
Governmental Certificates 6. Technical
Collection &
Evaluation Evaluation
Agencies’ Unsealing Lists of
Requisitions Registered
Suppliers
Technical
Specifications Contracts’
7. Economic 8. Contract 9. Procurement Performance
Evaluation & Execution
Registered Process Review and Control
Suppliers Contract Receipt & Archives
Award Payment

Information Systems - Financials, Budget, Supplies

Fig. 4. The Greek governmental purchasing model.

for the completion of the sub-process and a
detailed description of the tasks for each
activity of the sub-process (third level of process
analysis).
* The document flow analysis helped the tracing
of the information exchanged and documents
used, the recognition of bottlenecks and
the identification of alternative workflows. A
more detailed document workflow analysis was
realised with the use of deployment charts
(document flow representations between de-
partments).
* Information infrastructure: The analysis of the
existing information infrastructure (based on
the answers received through structured ques-
tionnaires) focused on existing applications that
support the planning and the execution of the
public procurement activities. The tools used
for the presentation of the results were Auto-
mated and Manual Activities Diagrams and
Maltese Cross Diagrams (showing the concen-
tration of information in particular depart-
ments and activities). The identification and
evaluation of the existing information systems
used for the fulfilment of the governmental
purchasing process was very important because
it would determine the need for specific inter-
faces of the new e-procurement system with
existing applications as well as specific func-
tional specifications that should be embodied in
the system after the discontinuation of selected
out-of-date old systems.
3.5. Problematic areas identification
The new process design was based on the
analysis results and the identification of proble-
matic areas that could be improved by the
introduction of an electronic system. The basic
steps of the analysis of the problematic areas were
the following:
* Qualitative analysis based on the tools used in
the process analysis.
* Quantitative analysis of PPP’s and tenders’
historical data. Selected performance indi-
cators were calculated such as the number
of documents used (per organisational unit,

DEPARTMENT OF
APPROPRIATE PROCUREMENT
PUBLICATIONS
DEPARTMENT
& RECEIPTS
Examination and Delivery of
Recommendation for
Unsealing the Economic
Proposals
-Recommendation
-Request for Unsealing
-Public Procurement Committee
Date Definition Decision for Economic
Proposals Unsealing
-Memo (Unsealing date)
6. Technical Offers Evaluation
Date Definition for Announcement of the
Economic Proposals Technical Proposals
Unsealing Evaluation Results
Yes
Objection
Decision Change
No Approved?
Objection Process
Economic Proposal Return
Due to Unacceptable
Technical Proposal
∆7α.
7 .
Fig. 5. Sample process chart: ‘‘evaluation of technical proposals’’.
88
PUBLIC TECHNICAL SUPPLIERS
PROCUREMENT COMMITTEE
COMMITTEE
-Minutes of Technical Proposal Evaluation
-Evaluation Table
Technical
-Technical Proposal
Proposals ∆5.
5.
Evaluation
Consultatory Response
for Unsealing the
Economic Proposals
N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102
consultatory response
Suppliers Notification of the
- Decision announcement
Technical Proposal Evaluation
& Announcement of the
ARTICLE IN PRESS
Economic Proposals Unsealing
Objection
-Decision announcement
Against the
Decision?
No
Yes
-Objection Objection Against the
Results of the Technical
Proposal Evaluation
-Sealed Economic Proposal
Receipt of Return
Economic Proposal
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sub-process, tender, value), the lead times of
selected activities, the volumes of transactions,
the number of tenders performed (per depart-
ment and time period), the existing quantitative
relationships between governmental agencies
and the volumes and values of requested goods,
the volumes and the capacities of organisational
units and committees.
* Visualisation of problems’ causes and effects
with the use of fishbone diagrams.
The most important findings of the qualitative
analysis can be summarised as follows:
* Heavy work load at specific organisational
units.
* Delays due to mistakes at the procurement
requisitions of the governmental agencies.
* Iteration of the set of activities of ‘‘delivery of
recommendation’’ and ‘‘consultatory response’’
of the Public Procurement Committee.
* Delays on the technical evaluations of pro-
posals.
* Process segmentation into various departments
and committees.
* High ratio of checking and controls that causes
delays.
* Variations, exceptions and special cases of the
tendering sub-processes.
* Issue of multiple copies of the documents.
* Extremely large number of documents and
transactions.
* Multiple filling (iteration and dissemination of
the information).
* Difficulty in searching information from manu-
ally maintained and massive archives.
* Deficiency of document standardisation.
* Same data entry to different applications
(mainly for the PPP).
* Manual and iterated data entry to applications.
* Information technology supporting a very small
percentage of activities. Most of the activities
are carried out manually.
The most important findings of the quantitative
analysis can be summarised as follows:
* The tender lead times are long. A large
percentage of the delay is due to idle time
89
between the activities of the process. In
particular,
* The lead time in the case of the open
procedure procurement is 6–7 months (aver-
age value).
* The lead time in the case of the restricted
procedure procurement is 11–12 months
(average value).
* The maximum values of the procurement
process (both of the open and the restricted
procedure) extend to 2 years’ time.
* The sub-processes acting as bottlenecks in the
process are the following:
* The technical evaluation which accounts for
40% of the total tender time in the case of
open procedure procurement.
* The pre-selection of suppliers who are
invited for submitting proposals accounts
for 54% of the total tender time in the case of
restricted procedure procurement.
* The iterated set of activities of ‘‘delivery
of recommendation’’ and ‘‘consultatory
response’’ of the Public Procurement
Committee is executed for at least 4 times
in every restricted procedure tender
and accounts for 27% of the total tender
time.
* The activities with the longest lead times are
the following:
* The examination of suppliers’ requests for
participation to restricted tenders, which
accounts for 24% of the total restricted
tender time.
* The technical proposals evaluation from the
technical committees, which accounts for
13% of the total time for open tenders and
8% for restricted tenders.
* A large number of activities has been
identified (160 activities at the second level
of analysis and 480 at the third level) due
to the bureaucratic procedures. A high per-
centage of the activities involve non-value-
adding work.
* Ninety-eight different types of documents
were traced in the whole procurement
process. This number could be substan-
tially smaller in the case of documents’
standardisation.
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90 N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102
* The document transactions appeared to be very
high. The most striking findings in this area
were the following:
* One hundred documents (average value) are
used internally and externally in each tender
process.
* Forty-six thousands documents (average
value) are used for the tenders in 1 year’s
time.
3.6. New process design and expected benefits
The purpose of the new process design was to
improve the identified problematic areas. Based on
the findings presented above, new process charts
and descriptions were developed for the Greek
governmental purchasing model.
A summary of key points that were introduced
by the new process is as follows:
* Single location filing.
* Electronic document flow and control. This
includes a common database for all the
organisational units and all the sub-process of
the purchasing process, integrated document
management system, automatic information
transfer, authorisation and permissions with
different access levels.
* Document standardisation and simplification.
* Rationalisation of the number of documents
used.
* Elimination of non-value-added activities in the
cases where there is no legal constraints.
* Information technology support for most of the
activities, but not for all of them.
Three alternate scenarios were developed. The
basic difference between these scenarios was
the level of the organisational changes and the
adoption of new business models of electronic
procurement. The conservative scenario included
changes that referred mainly to process simplifica-
tion and improvement, new information system
that covered both the front-end e-procurement
and the back-office workflow system and minor
organisational changes such as establishment of an
additional secretariat for the support of the
planning process and temporary employee trans-
fers to organisation units with heavy workload.
The radical scenario included a leaner and more
flexible organisational structure with discernible
roles and objectives for each position, redesigned
purchasing process and an information system
that would be capable to use new business models
such as procurement through market places, use of
catalogues and procurement through reverse
auctions. The implementation of the changes
suggested at this level should be supported by
corresponding changes at the legal framework that
determines the operation of the public procure-
ment in Greece. The middle-level scenario included
fewer organisational changes that could be
adopted in a relatively short-time horizon.
The design of the improved process followed the
conservative scenario (as presented in Fig. 3) after
the strategic decision of the Committees of
General Secretariat of Commerce. The selection
of the conservative scenario was justified with the
following arguments:
* Changes in the organisational structure of the
General Secretariat of Commerce would be
time-consuming and would delay the imple-
mentation of the e-procurement system. The
selection of the conservative scenario was
translated to minor changes in the organisation
of the departments and committees.
* The legal framework could not be radically
changed in a short period of time and any
change should be in line with the European
Community legal framework.
* There were legal constraints in easily imple-
menting new business models for governmental
purchasing such as electronic catalogues and
reverse auctions (Arrowsmith, 2001).
* The workforce of the General Secretariat of
Commerce could not be reduced according to
the existing legal framework. As a result, the
cost effectiveness due to the minimisation of
‘‘labour’’ cost could not be realised in this case.
* By the end of 2005, Member States of European
Union should carry out a significant part of
public procurement electronically. Council
and Parliament should adopt as quickly as
possible the legislative package on procurement
(European Communities, 2002).
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* The new business models for governmental
purchasing could be optional functionality of
the e-procurement system.
However, the existing technologies introduced
by large software and hardware vendors enable the
adoption of new business models that can be
applied in the governmental purchasing process.
Trying to take advantage of such new effective
business models, the European Community pre-
pares new laws enabling more flexible processes in
the governmental purchasing. The change in the
European legal framework has started but has not
concluded yet. This implies that the decision for
the functional specifications of the e-procurement
system should take into account both the techno-
logical advancement and the future changes in the
European legal framework as well. Considering
that the implementation time for an e-procurement
system for governmental purchasing will last for
more than 2 years’ time, it can be understood that
the functional specifications should describe a
flexible system that can operate effectively under
new circumstances in the future.
The calculation of the return on investment
(ROI) of an IT project is one of the most difficult
issues highlighted both by academics and practi-
tioners. For the comparison of different process
design scenarios, a quantitative evaluation of the
strategy and the performance of the organisation’s
business processes is usually required (MacArthur
et al., 1994). Regarding quantitative measures,
monetary terms are to be preferred to other scores,
since only a monetary result of an evaluation
allows the application of investment analysis
methods. Given the type of IT-systems used
today and the particularities of the public sector,
only a small percentage of the benefits can be
quantified in monetary terms for a cost–benefits
analysis (Cilek et al., 2001; Remenyi et al., 2000).
Public sector organisations have to provide
services for which no kind of market exists.
As a consequence non-monetary benefits cannot
be capitalised by estimating their impact on
the organisation’s operation, for example, by
calculating the raise of the contribution margin
caused by providing better service to the
customer.
91
The introduction of the new public e-procure-
ment system in Greece for the selected scenario is
expected to bring shorter lead times and cost
efficiencies. These are the most important reasons
for the adoption of such systems (McKay, 2001).
According to empirical surveys carried out in the
United Stage of America, the two most important
measures for the success of procurement processes
are cost and time (Gebauer et al., 1998). At the
survey of National Institute of Governmental
Purchasing of USA in 2001, 85% of the respon-
dents mentioned that ‘‘time savings’’ are realised,
while 75% cited ‘‘reduction in costs’’ as the most
important outcome (National Institute of Govern-
mental Purchasing, 2001).
The identified benefits for the General Secretariat
of Commerce and the governmental agencies can
be distinguished between tangible (quantifiable)
and intangible (but difficultly quantifiable). The
calculated quantifiable benefits are the following:
* Reduction of supply costs: The estimation of the
study concerning the existing costs of supply (of
purchased goods) is a 1% cost reduction.
Taking into account that the average yearly
cost of supply is h 3.3 billions, the reduction of
supply costs was calculated to be h 33 millions.
This will be realised through the participation
of larger number of suppliers and the introduc-
tion of reverse auction business models.
* Reduction of cost per tender: It was calculated
that the improvement of the internal workflow
processes will permit a 20% improvement of the
human resources utilisation which will conclude
in 20% reduction in the cost per tender. It
should be stated that this is an opportunity
improvement, as the total number of employees
will stay stable.
* Lead-time savings: The lead-time savings will be
substantial both in the cases of open tenders
and the restricted tenders. In detail:
* In the case of the open tenders the lead time
is estimated to be reduced from 6.8 months
(average value) to 4.1 months. The estimated
reduction will result from:
– 0.4 months time saving due to reduction
of the average number of objections per
tender (from 5 to 3).
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92 N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102
– 0.8 months time saving due to 30%
reduction of the time needed for the
evaluation of the technical proposals
(which accounts for 40% of the total
lead time of an open tender).
– 0.5 months time saving due to 50%
reduction of the time needed for the
examination of the suppliers’ certificates
(which accounts for 15% of the total lead
time of an open tender).
– 0.3 months due to other time savings
resulting from the improved internal
workflow.
* In the case of the restricted tenders the lead
time is estimated to be reduced from 11.8
months (average value) to 7.7 months. The
estimated reduction will result from:
– 0.4 months time saving due to reduction
of the average number of objections per
tender (from 5 to 3).
– 0.8 months time saving due to 30%
reduction of the time needed for the
evaluation of the technical proposals
(which accounts for 22% of the total
lead time of an restricted tender).
– 2.6 months time saving due to 40%
reduction of the time needed for the
suppliers’ pre-selection sub-process
(which accounts for 54% of the total
lead time of an restricted tender). This
improvement will be mainly realised with
the use of the integrated electronic
system of registered suppliers.
– 0.3 months due to other time savings
resulting from the improved internal
workflow.
The most important intangible benefits can be
identified in the following areas:
* Process improvement benefits: simpler ordering,
reduced paperwork, decreased redundancy and
less bureaucracy, standardisation of processes
and documentation, online reporting, clearer
and more transparent processes, ensured com-
pliance with procurement laws and regulations,
minimisation of errors, easier access to infor-
mation (e.g., background information on new
suppliers, related tenders, purchases of the same
nature).
* Organisational benefits which include:
* More autonomy to sections and departments
as a result of potential decentralisation of
procurement.
* More free time for purchasing specialists to
investigate and negotiate strategically impor-
tant issues.
* Convenient access to wider range of suppli-
ers, improved competition.
* Improved communication and partnerships
with suppliers.
Although difficult to be quantified, a number of
expected benefits will also be realised by the
suppliers that will participate in the e-procurement
system. Some of the expected advantages for the
suppliers can be summarised as follows:
* Cost and resource savings: reduced costs of
sales, reduced administration costs, and re-
duced warehousing needs.
* Process improvement: minimised errors in
supplying and billing, faster payment proce-
dures, fewer bureaucratic procedures.
* Transparency in the procurement process.
* Encouragement of SMEs to use new technologies.
* Encouragement of SMEs operating outside
large cities and in less favoured locations to
become suppliers.
* Potential encouragement for businesses owned
by women, minorities and disabled persons to
participate in the public procurement process.
The estimated cost of the investment for the
procurement and the implementation of the system
based on the functional specifications of the
selected scenario is h 45 millions.
3.7. Functional specifications definition
The design of the new governmental purchasing
process supported the definition of the functional
specifications of the solution. Although the con-
servative reengineering scenario was qualified for
implementation, it was decided that the future
public e-procurement system should embody solu-
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tions such as electronic marketplaces, electronic
catalogues, exchange and reverse auctions, which
are scheduled to be introduced by European
governments in the next years. The most impor-
tant features of the specified system are sum-
marised as follows:
* Fully electronic activities of the governmental
purchasing process, executed by the General
Secretariat of Commerce using Intranets and
web-enabled applications where applicable.
* Manual execution of activities where soft issues
are involved (such as negotiations with the
suppliers, qualitative evaluation and decision
taking). In these activities, the e-procurement
system will only play a supportive role.
* Interaction and communication with the exter-
nal entities (governmental agencies, suppliers)
through the Internet. The appropriate author-
isation definitions will determine the access of
the external entities into the system.
* The tendering process could be carried out in a
decentralised manner by the governmental
agencies that hold the largest percentage of
the authorised procured quantities, using sec-
tional tendering sub-systems, integrated to the
central tendering system.
* Interfaces with other existing governmental
information systems.
Fig. 6 summarises the solutions included in the
governmental e-procurement system.
The different solutions of the system cover
specific needs of governmental purchasing at
present or in the future. Their role is described
below:
* The tender solution will support the electronic
submission of proposals in a similar way with
the manual submission process followed at
present.
* The workflow solution will cover the needs of
communication within the General Secretariat
of Commerce or with external entities. It will
include a related document management system
and will co-operate with a Management In-
formation System (MIS). Moreover, an
e-procurement system could not work effi-
93
Tenders
Exchange Workflow
&Auctions
Governmental
E-Procurement
System
Electronic Electronic
Catalogues Marketplaces
Fig. 6. E-procurement system overview.
ciently if there is a manual and paper-based
back-office workflow system.
* The electronic marketplaces will be used in the
case of blanket agreements established with
selected suppliers. The marketplaces extend the
idea of online stores and try to build commu-
nities, often in vertical markets. An electronic
marketplace allows the participating buyers and
sellers to exchange information about prices
and product offerings. In this case buyers and
suppliers can operate in an integrated electronic
market, providing services other than e-pro-
curement.
* The electronic catalogues will be used for the
procurement of low-value goods in the future.
The electronic catalogues can be used for low-
value repetitive procurement of goods. The
catalogues allow buyers to access information
from suppliers about products and services,
prices and their availability, and a supplier or a
third party catalogue service provider hosts
them.
* The exchange and reverse auctions will be the
new business models that will be followed in the
governmental purchasing after the preparation
of the appropriate legal framework. These
models will enable the commerce portals to
match buyers and sellers or conduct auctions
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94 N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102

over the Internet. On a reverse auction model tions have been generated for the rest of the
sellers bid down instead of up against others systems included in Fig. 6.
until a winner is declared. The lowest level of the functional specifications
was further supported with detailed descriptions.
The functional specifications were structured in The analytical descriptions, together with the
three hierarchical levels (systems, modules, and technical specifications, will be included in the
functions). Fig. 7 demonstrates the specifications request for proposals (RFP), which will be sent to
related to the tender and the workflow system as suppliers and implementers of e-procurement
well as the services that will be needed for the systems and will be published by the end of March
development of the application. Similar specifica- in 2003.

Greek Governmental
E-Procurement System

Public
Contract Review Information
Procurement Tendering Architecture Services
Execution Process Management
Plan (PPP)

Performance & Functions &

Requisition Request for Contract Catalogues
PPP Review Reliability Documentation
Management Proposals (RFP) Administration
Initial & Revised PPP Portability Functions Creation
Notification for
Requisitions RFP Preparation Contract Data Entry
Comparison Data Warehouse
Procurement Availability On-line Help
Requisitions RFP Publication Contract Monitoring Actual PPP
Reference Response Time Printed
Documentation
Technical Specs. Receipt Supplier Selection Contract Library
for Restr. Tenders Tenders’ Review
Execution Standardisation & Integration
Requisitions Checking Templates User Interface
Support
Invitation to Tender Delivery Tenders fulfilled by GSC
Agreements
PPP Creation Tenders fulfilled by Portability Interface
Suppliers Certificates Invoicing Government Agencies
Tracking & Support
Availability
Draft PPP Suppliers Selection Payment Contracts Workflow
Implementation
Review Response Time
Approved PPP Request for Proposal Transactions Services
GSC Contracts
Initial PPP Proposals Status Inquiry Data Mgt Project Management
Governmental
Evaluation Authorities Contracts
Revised PPP Workflow Functions Deliverables
Proposals Submission Suppliers’ Integration
Analysis & Additional Time/ Cost
Evaluation
Proposals Unsealing Reports
Data Transform.
Supplier Certificates Historical Data Interfaces
Evaluation
Ad-hoc Reports Services
Evaluation
Technical Evaluation Data Processing Document Help Desk -
Circulation Customer Care
Economic Evaluation
Web Services
Security & Training &
Contract Award Cryptography Documentation
Knowledge Mgt
Objections Mgt Software Project Management

Upgrade
Content Management Deliverables
Objection Receipt
Market Knowledge Additional Time/ Cost
Objection Monitoring
Inquiry/ Forwarding Consulting
Services

Travel

Fig. 7. Functional specifications tree.

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4. Conclusions
The structured approach of the study of the
Greek governmental purchasing system (Tatsio-
poulos et al., 2001), presented in this paper,
enabled the identification of problematic areas
and supported the design of the new governmental
purchasing system, facilitating the definition of the
necessary functional specifications for the selection
of the appropriate solution. The methodology
presented in this paper identified and analysed
three alternative scenarios, which were ranked
according to the degree of the innovation they
entail. The existing legislative restrictions as well as
the European directives concerning the evolution
of the governmental purchasing process in the near
future were all taken into account in order to
qualify the most appropriate scenario for the case
of the Greek General Secretariat of Commerce.
The analysis of the prerequisite business processes
was coupled with the design of new processes
supported by new business models of e-procure-
ment. The selected ‘‘conservative’’ scenario was
enriched by functionalities offered by the two or
more ‘‘innovative’’ scenarios.
The study revealed the difficulties in reengineer-
ing the public sector and identified the most
Context
Government drivers
Supplier
Management
Business Objectives
Requisition
Management
Management Procurement
Procurement
Supply Chain
Developments
Workflow
Best Practices
Fig. 8. E-procurement expected benefits.
95
important barriers in the adoption of private
sector’s e-procurement business models. The thor-
ough analysis of the existing legislative framework
was identified to be one of the most important
CSFs in the design of the new procurement
processes. The adoption of advanced technological
solutions in the public sector can be achieved in an
‘‘incremental change’’ manner, as public sector
procurement must work within regulations and
policies established to accomplish desirable social
as well as economic goals. This explains the
approach followed which placed a large amount
of effort in the careful analysis of the existing
governmental purchasing process for the design of
the new business processes and the adoption of
selected e-business models.
The designed functional specifications express
the strategic view of the Greek General Secretariat
of Commerce for the governmental purchasing of
the future, taking into account the supply chain
developments and the existing practices in the
public sector all over the world. The expected
benefits of cost reduction, improved efficiency,
effectiveness and absolute transparency will result
from the simplified processes, the electronic sup-
port of the activities, the continuous performance
measurement and the definition of clear roles and
Benefits
Improvement
Simplified Processes Cost Reduction
Efficiency/
Electronic Support
Productivity
Performance
Effectiveness
Measurement
Clear Roles &
Transparency
Responsibilities
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Table 1
Sub-processes and activities of the second level process charts

Nr. Sub-processes and activities Department involved

1. Preparation of the Public Procurement Plan

1.1. Issue of governmental announcement for preparation Statutory Regulations Department
of the Public Procurement Plan
1.2. Issue of procurement requisitions Governmental Agency
1.3. Requisitions examination and approval/disapproval Public Procurement Planning & Data Department
1.4. Notification of reparative activities to governmental Public Procurement Planning & Data Department
agencies
1.5. Correction of procurement requisition Governmental Agency
1.6. Data entry to the database ‘‘Public Procurement Plan Public Procurement Planning & Data Department
(PPP) Management’’
1.7. Checking of the inventories on hand and credits of the Audit Committee
participant governmental agencies
1.8. Preparation of the agenda for the meeting of the Public Procurement Planning & Data Department
Procurement Policy and Planning Committee
1.9. Consultatory response for the standard or special Procurement Policy and Planning Committee
topics of the Public Procurement Plan
1.10. Edition of the initial PPP (Draft PPP) or the revised Public Procurement Planning & Data Department
PPP (during the year)
1.11. Approval and signing of the Public Procurement Plan Assistant Minister of Development and Minister of
(approved PPP) Economics
1.12. Issue of governmental announcement for the Statutory Regulations Department
implementation of the Public Procurement Plan (initial
and revised PPP)
1.13. Publication of the Public Procurement Plan (press, Public Procurement Planning & Data Department
Internet, TED)
1.14. Creation of the lists of procurement for each Public Procurement Planning & Data Department
Department of the General Direction of Public
Procurement
1.15 Creation of the lists of procurement for each Public Procurement Planning & Data Department
governmental agency

2. RFP’s preparation and publication

2.1. Technical specifications issue for each procurement Governmental Agency
requisition of governmental agencies
2.2. Storage of the sample of the requested product Department of Publications and Receipts
2.3. Technical specifications receipt and initial examination Appropriate Procurement Department
2.4. Recommendation to the Technical Division about Appropriate Procurement Department
technical specifications
2.5. Technical specifications examination Technical Division
2.6. Notification of reparative activities to governmental Technical Division
agencies
2.7. Correction of requisitions’ technical specifications Governmental Agency
2.8. Categorization of requisitions based on technical Appropriate Procurement Department
specifications
2.9. Request for proposal (RFP) issue Appropriate Procurement Department
2.10. Request for proposal (RFP) overview preparation for Department of Publications and Receipts
publication
2.11. Update of the TED Data Base and Web Site Public Procurement Planning & Data Department
2.12. Request for proposal (RFP) publication (press, E.U. Department of Publications and Receipts
paper, chambers)
2.13. Information received by the suppliers (related to RFP) Suppliers
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N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102 97

Table 1 (continued)

Nr. Sub-processes and activities Department involved

3. Available suppliers pre-selection

3.1. Invitation to tender (ITT) publication for restricted Appropriate Procurement Department
tenders
3.2. Forwarding invitation to tender for restricted tenders Appropriate Procurement Department
to suppliers
3.3. Request for participation to restricted tender Supplier
3.4. Examination of suppliers’ requests and certificates Appropriate Procurement Department
3.5. Suppliers’ notification of supplementary information Appropriate Procurement Department
or certificates
3.6. Provision of additional information or issue of Supplier
supplementary certificates
3.7. Issue list of examined suppliers’ certificates Appropriate Procurement Department
3.8. Delivery of recommendation for suppliers pre-selection Appropriate Procurement Department
in restricted tenders
3.9. Consultatory response for suppliers pre-selection Public Procurement Committee
3.10. Decision for suppliers pre-selection in restricted Appropriate Procurement Department
tenders
3.11. Announcement of the pre-selected suppliers Appropriate Procurement Department
3.12. Suppliers’ notification of the decision for suppliers pre- Appropriate Procurement Department
selection
3.13. Objection against the decision for suppliers pre- Supplier
selection
3.14. Decision change due to suppliers objection Appropriate Procurement Department
3.15. Issue of request for proposal in restricted tenders Appropriate Procurement Department
3.16. Receipt of the request for proposal (RFP) Supplier

4. Proposals collection and unsealing

4.1. Receipt of the full text and information of the RFP Suppliers
4.2. Objection against the terms of the RFP Suppliers
4.3. Decision for revision of the terms of the RFP Appropriate Procurement Department
4.4. Suppliers’ notification of the revised RFP Appropriate Procurement Department
4.5. Preparation of the sample of the requested product Supplier
4.6. Sample collection and issue of receipt for sample Department of Publications and Receipts
deposal
4.7. Preparation and submission of proposals (technical Suppliers
and economic proposals and certificates)
4.8. Receipt of sealed proposals Department of Publications and Receipts (Bureau of
Proposals)
4.9. Proposals’ unsealing (technical proposals and Committee for Receiving and Unsealing Proposals
certificates)
4.10. Issue the table of proposals’ unsealing and registration Committee for Receiving and Unsealing Proposals
4.11. Receipt and elaboration of the table of proposals’ Appropriate Procurement Department
unsealing and registration
4.12. Technical & economic proposals receipt and Appropriate Procurement Department
safekeeping
4.13. Objection against the proposals unsealing procedure Supplier
4.14. Objection’s receipt and elaboration Appropriate Procurement Department

5. Suppliers’ certificates evaluation

5.1. Evaluation of the suppliers’ certificates and objections Appropriate Procurement Department
against the proposals unsealing procedure and delivery
of recommendation
5.2. Consultatory response for the suppliers’ certificates Public Procurement Committee
completeness and objections against proposals
unsealing procedure
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Table 1 (continued)

Nr. Sub-processes and activities Department involved

5.3. Decision for suppliers’ certificates completeness and Appropriate Procurement Department
objections
5.4. Announcement of the certifications evaluation results Appropriate Procurement Department
5.5. Suppliers’ notification of the certificates evaluation and Appropriate Procurement Department
objections against proposals unsealing procedure or
for new certificates
5.6. Objection against the results of the certificates Supplier
evaluation
5.7. Decision change due to supplier’s objection Appropriate Procurement Department
5.8. Forward technical proposals for evaluation to Appropriate Procurement Department
appropriate technical committee

6. Technical evaluation
6.1. Technical proposals evaluation Technical Committee
6.2. Examination and delivery of recommendation for Appropriate Procurement Department
unsealing the economic proposals
6.3. Consultatory response for unsealing the economic Public Procurement Committee
proposals
6.4. Decision for economic proposals unsealing Appropriate Procurement Department
6.5. Date definition for economic proposals unsealing Department of Publications and Receipts
6.6. Announcement of the technical proposals evaluation Appropriate Procurement Department
results
6.7. Suppliers’ notification of the technical proposal Appropriate Procurement Department
evaluation & announcement of the economic proposals
unsealing
6.8. Objection against the results of the technical proposal Supplier
evaluation
6.9. Decision change due to supplier’s objection Appropriate Procurement Department
6.10. Economic proposal return due to unacceptable Appropriate Procurement Department
Technical proposal
6.11. Receipt of returned economic proposal Supplier

7. Economic evaluation and contract award

7.1. Request for validity extension of suppliers’ certificates Appropriate Procurement Department
7.2. Issue of extended or renewed certificates Supplier
7.3. Request for validity extension of proposals Appropriate Procurement Department
7.4. Issue of extended or renewed proposal Supplier
7.5. Notification to the ‘‘Committee for Receiving and Appropriate Procurement Department
Unsealing Proposals’’ for the beginning of economic
proposals unsealing
7.6. Forwarding of sealed economic proposals to Appropriate Procurement Department
‘‘Committee for Receiving and Unsealing Proposals’’
7.7. Economic proposals unsealing Committee for Receiving and Unsealing Proposals
7.8. Composition of the table of unsealing and registration Committee for Receiving and Unsealing Proposals
of economic proposals
7.9. Economic proposals evaluation Appropriate Procurement Department
7.10. Composition of the table of economic proposals’ Appropriate Procurement Department
comparative data
7.11. Substantiation of procurement cost Department of Prices and Costs Substantiation
7.12. Economically or most advantageous supplier selection Appropriate Procurement Department
7.13. Delivery of recommendation for contract awarding or Appropriate Procurement Department
not
7.14. Consultatory response for contract awarding Public Procurement Committee
7.15. Decision for contract award Appropriate Procurement Department
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N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102 99

Table 1 (continued)

Nr. Sub-processes and activities Department involved

7.16. Suppliers’ notification for economic proposals Appropriate Procurement Department

evaluation and contract award
7.17. Objection against the results of economic proposals Supplier
evaluation
7.18. Decision change due to supplier’s objection Appropriate Procurement Department
7.19. Suppliers’ notification of objection examination results Appropriate Procurement Department
7.20. Forward the decision for contract award to Auditing Appropriate Procurement Department
Council (if requisite)
7.21. Approval or not for the decision for contract award Auditing Council
7.22. Contact signing Appropriate Procurement Department
7.23. Submission of certificates for contract Supplier
7.24. Return of the letter of guarantee for tendering Appropriate Procurement Department
7.25. Request for designation of the Procurement Receipt Appropriate Procurement Department
Committee

8. Contract execution, receipt and payment

8.1. Designation of the Procurement Receipt Committee Department of Publications and Receipts
8.2. Constitution of the Procurement Receipt Committee Appropriate Procurement Department
8.3. Quantitative and qualitative control of procured goods Procurement Receipt Committee
8.4. Composition of protocol of receipt or rejection Procurement Receipt Committee
8.5. Issue of the certifications of goods received Governmental Agency
8.6. Examination of protocol of receipt and certifications of Appropriate Procurement Department
goods received
8.7. Delivery of recommendation for suitability of procured Appropriate Procurement Department
goods
8.8. Consultatory response for suitability of procured Technical Division
goods
8.9. Decision for rejection of the procured goods Appropriate Procurement Department
8.10. Supplier’s notification for the decision of rejection of Appropriate Procurement Department
procured goods
8.11. Objection against the decision of rejection of procured Supplier
goods
8.12. Constitution of Second Degree Procurement Receipt Appropriate Procurement Department
Committee
8.13. Reexamination of the rejected procurement Second Degree Procurement Receipt Committee
8.14. Consultatory response for the rejection or not of the Second Degree Procurement Receipt Committee
procured goods
8.15. Decision for definitive rejection of procurement Appropriate Procurement Department
8.16. Supplier’s notification of the decision of definitive Appropriate Procurement Department
rejection of procurement
8.17. Decision of definitive receipt of procurement Appropriate Procurement Department
8.18. Return of the letter of guarantee for contract fulfilment Appropriate Procurement Department
8.19. Supplier’s notification of the decision of definitive Appropriate Procurement Department
receipt of procurement
8.20. Issue of invoices Supplier
8.21. Payment of the supplier Governmental Agency

9. Procurement process review

9.1. Forward tenders’ review data fulfilled by governmental Governmental Agency
agencies
9.2. Data entry to the software application ‘‘PPP review’’ Public Procurement Planning & Data Department
9.3. Data processing from the database ‘‘Public Public Procurement Planning & Data Department
Procurement Plan Management’’
9.4. Public procurement review reporting Public Procurement Planning & Data Department
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100 N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102
Table 1 (continued)
Nr. Sub-processes and activities
9.5. Reports sent to appropriate Procurement Department
of General Secretariat of Commerce or Public Agency
9.6. Forward tenders’ review data fulfilled by General
Secretariat of Commerce
9.7. Data entry to the software application ‘‘tenders status’’
9.8. Tenders review reporting
9.9. Reports for tenders sent to appropriate Procurement
Department of General Secretariat of Commerce or
Public Agency
10. Suppliers’ objections
10.1. Supplier’s objection sent to appropriate Procurement
Department
10.2. Objection examination in case this refers to technical
specifications
10.3. Recommendation to technical committee about
supplier’s objection
10.4. Consultatory response about supplier’s objection
10.5. Examination of available information and delivery of
recommendation for supplier’s objection
10.6. Consultatory response for supplier’s objection
10.7. Decision for supplier’s objection
10.8. Supplier’s notification for the objection
responsibilities. The defined functional specifica-
tions intend to successfully express the specific
needs both in services and change management
that will support the new governmental pur-
chasing process. Fig. 8 summarises the way
forward towards the achievement of the expected
benefits.
The coordinator of the governmental purchas-
ing system will be the General Secretariat of
Commerce, while the users (internal customers)
will be the qualified governmental agencies.
The suppliers (even SMEs sited outside the
capital) will be encouraged to participate in
tenders with simplified procedures and shorter
lead times. The civilians (and taxpayers) will
be the final beneficiaries who will receive im-
proved and more ‘‘value for money’’ public
services. Furthermore, taking into account that
public procurement is a key area of the
Internal European Market, both in terms of its
economic importance and as an instrument of
direct economic influence for Member States’
administrations, the new public e-procurement
Department involved
Public Procurement Planning & Data Department
Appropriate Procurement Department
Public Procurement Planning & Data Department
Public Procurement Planning & Data Department
Public Procurement Planning & Data Department
Supplier
Appropriate Procurement Department
Appropriate Procurement Department
Technical Committee
Appropriate Procurement Department
Public Procurement Committee
Appropriate Procurement Department
Appropriate Procurement Department
system will help in the European Union-wide
competition.
The result of the study presented in this paper
was the basis for the preparation of the RFP for
the procurement and implementation of the
governmental e-purchasing solution. This RFP
will be published by the end of the first semester in
2003 by the Greek Ministry of Development. The
received proposals will be evaluated for the pre-
qualification of selected suppliers/implementers
with acceptable technical proposals and the
qualification of the final supplier/implementer.
The successful implementation of such a demand-
ing program will result in a workflow long-term
efficiency, governmental purchasing effectiveness
and cost decrease, leading to reduced cost burden
for the public.
The methodological approach followed in the
case of Greece can be useful for the introduction of
similar governmental purchasing electronic sys-
tems in other European countries, especially the
Balkan or the former European countries that
have not adopted such procurement systems yet.
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N.A. Panayiotou et al. / Int. J. Production Economics 90 (2004) 79–102
Appendix A
Sub-processes and activities of the second level
process charts are given in Table 1.
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