New | Innovative Procurement Mechanisms Transform Core Values of Procurement
Impact | Helping Firms Develop New Business Models by Using Cloud Services
Key | Firms Cooperate with Public Associations by Using Innovative Procurement Mechanisms, Enabling the Two Parties to Serve a Crucial Role to Buyers and Sellers
Evidence | Effectively Linking Domestic Software Products to Government’s Procurement Market, Driving Firms to Engage in Innovative R&D and Creating Sustainable Business Opportunities
To prevent repetition of effort among government agencies during the procurement of assets and labor, thus leading to wasted time and manpower, the Public Construction Commission (of the Executive Yuan) proposed the use of inter-entity supply contracts. This appoints one of the government agencies to act on behalf of all other agencies to negotiate product prices with firms and to complete the tender procedure, providing all relevant government agencies with access to subsequent and direct procurements. The procurement-based inter-entity supply contracts have become one of the most important guidelines for software firms when doing business with government agencies.
To help the government build a complete software procurement system, in August 2014, the Industrial Development Bureau (of the Ministry of Economic Affairs) commissioned the Institute for Information Industry to establish the Software Procurement Office, to be responsible for improving the software procurement environment (through means such as inter-entity supply contracts), guiding the software industry, and serving as a mediator between buyers and sellers. Designing New Procurement Models to Maximize Business Opportunities for the Software Industry
In order to promote the domestic software industry and maximize business opportunities, the Software Procurement Office designed new procurement models for increasing product solicitations, planning bidding mechanisms, and designing new systems including quantity brackets and four-stage pricing. In addition, to enhance procurement flexibility and opportunities, the number of procurements (open to bidding) made was increased from once to four times per annum. Furthermore, automatic open bidding mechanisms were introduced, which significantly lowers bidding preparation costs and elevates open bidding efficiency. Moreover, procurement base prices are publicly announced to avoid bid-winning firms from losing money because of unreasonable bidding prices. The Software Procurement Office is currently considering including innovative procurement items in inter-entity supply contracts. For examples, it is considering developing cloud service test mechanisms for cloud services, which have emerged in recent years, to ensure service quality and help firms provide appropriate, high-quality cloud services. Additionally, the Software Procurement Office formulates related information security guidelines and management methods to assist firms strengthen cloud service environment security. These cloud service-related aspects will also be incorporated one by one into inter-entity supply contracts to improve government agencies’ procurement process and drive the government and relevant industries to use cloud products and services. Elevating the Global Competitiveness of WEF through Creativity
By utilizing new procurement mechanisms, domestic software products are effectively linked to the government procurement market, impelling firms to upgrade and provide cloud services. Firms are encouraged to engage in innovative R&D and create sustainable business opportunities, which indirectly improve the performance of Taiwan’s e-government. Diversified procurement options will continue to be provided to the government in the future and efforts will continue to be made to engender innovative developments. The goal is to offer a favorable, win-win procurement environment for both buyers and sellers.