Table of Contents

Chapter 1 Introduction............................................................................................... 2
1.1

Background.................................................................................................... 2

1.2

Definitions...................................................................................................... 4

1.3

E-Procurement in Nepal.................................................................................4

1.4

Statement of the problem.............................................................................. 4

1.5

Research questions........................................................................................ 5

1.6

Objective of the study....................................................................................5

1.7

Significance of the study................................................................................6

1.8

Scope and limitations of the study.................................................................6

Chapter 2 Organizational Structure............................................................................7

2.1

Introduction................................................................................................... 7

2.2

Organizations and Institutions under DOI......................................................7

2.2.1
3

YGIG......................................................................................................... 9

Works Cited....................................................................................................... 10

Chapter 1
Introduction
1.1
Background
Over the past decade, rapid progress in Information Communication Technology
(ICT) has encouraged many governments to incorporate new technology into their
national economic development strategies. Hence, the way a government does its
business has been greatly influenced by every the increasing use of Information
Communication Technology (ICT). E-government is an important application within
ICT and has become more significant in the agenda of policy and decision makers
the world over. It has been witnessed an increasing interest in reforming the public
sector by using information technology as a platform for communication with and
providing services to citizens, a rapidly growing phenomenon which is
internationally labeled e-government (Ho, 2002); (Heeks, 2006); (Worrall, 2011);
(Rabiaiah & Vandijck, 2011). The concept of e-Governance has become a buzzword
in public sector management business. E-governance creates a new medium that
changes the nature of the whole public sector and its relationship with its
constituencies and can make a significant contribution to the achievement of good
governance goals. Thus e-Governance can behas been taken as an ICT based
solution which improves governments internal administration as well as enhance its
service delivery mechanism.
E-government provides delivery of public services in a much more convenient and
cost-effective way, offering huge opportunities to improve public sector efficiency.
However, the process of change also gives rise to new challenges and difficulties,
especially in developing countries, where many initiatives have not been successful.
This is as a result of the massive deficiencies in basic infrastructure, human
capacity and financial resources, along with the attendant political and cultural
constraints. These factors are crucial and impede the adoption of E-government and
the building of an information based society and economy. E-government initiatives
must therefore account for the specific government systems, technological
infrastructure and environmental conditions of the country.
Being a developing country, a large chunk of Nepals annual budget is used as the
Development Budget. Approximately 60% of this annual budget accounts for the
Procurement purpose (PPMO, 2068). The construction industry in Nepal is significant
in economic terms, accounting for 45% of total development investment made since
1975. (ILO, 2005) This major portion of the government expenditure, for the
procurement of works, goods, and services, is made through the public procurement
process. Hence, it becomes important to emphasize greatly on these activities in
order to accomplish them in an efficient and transparent manner.. Keeping in mind
that a government is the single largest purchaser in the national economy and that
the public procurement systems in low- and middle-income countries are typically

far away from spending money in a transparent and efficient way, the application of
information technology offers opportunities for improvements that which the public
sector cannot afford to ignore. And, as pPublic procurement is being one of the key
activities performed by a government, introduction of IT in the management of
public procurement is considered to be a great leap of a government towards eGovernance.
By definition, procurement is the purchase of goods, services and works at the
optimum possible total cost in the correct quantity and quality by government,
business or individuals. It differs from the normal day to day individual
purchasing/shopping. Procurement is more formal and legal and usually
accompanied by a Contract. Among procurements done by various institutions,
public procurement is the most formal one. Public procurement is the process by
which governmental agencies purchase works / goods /services expensing the
public money following formal and specific guidelines like Acts / Regulations
approved by the government. In the context of Nepal, all the public procurement is
governed by The Public Procurement Act 2063, and The Public Procurement
Regulation 2064-Third Amendment 2068.
According to (PPA, 2063), Procurement means acquisition of any goods,
consultancy services or other services or carrying out or causing to be carried out
any construction works, by a public entity pursuant to this Act.
1.2

Definitions

There are various definitions of e-Procurement system given by the experts and the
scholars. Firms in diverse industries use electronic procurement (e-procurement) in
an attempt to increase the efficiency of the purchasing/supply management
function and to reduce costs (Pearcy, 2008). (Presutti, 2003) defined e-procurement
as a technology solution that facilitates corporate buying using the internet. (Min
& Galle, 2003) defined e-procurement as business-to business purchasing practice
that utilizes electronic commerce to identify potential sources of supply, to purchase
goods and services, to transfer payment, and to interact with suppliers. Eprocurement is part of a broader concept called information technology (IT), which
the American Heritage Dictionary (American Heritage Dictionary, 2005) defines as
the development, installation, and implementation of computer systems and
applications.
1.3
E-Procurement in Nepal
The umbrella act for public procurement of Nepal 2007, (PPA, 2063) has stated on
its the Para 69 that;
Procurement Transaction May be Carried out through Electronic Communications
Means

With reference to this clause of the act, The Department of Roads (DOR), in 2007,
started the implementation of e-Procurement system for the first time in Nepal. The
Department of Irrigation (DOI) has also started the practice of e-procurement
system since 2011. In the mean time many other public organization as well as
private institutions such as DOLIDAR, DUDBC, DWSS, NEA, NTC e.t.c. has started the
e-Procurement system.
1.4
Statement of the problem
It is well known that the project executing departments suffer especially in
procurement processes. Physical threats to bidders, cartel formation, suppressed
competition, pressures on department officials, inordinate delays in tender
finalization, human interface, manipulations, tampering, inadequate transparency,
adverse press coverage on tender fracas are the most common incidences that
happens during the procurement processes in Nepal. (Shah, 2009)
To overcome most of these issues, the government of Nepal has stepped towards
the e-Procurement System. But since then, there has been very limited studies
made to monitor, evaluate and control the newly up taken e-Procurement Practice.
Even the offices (under DOI) have been practicing the e-procurement system, they
have not yet been able for the full implementation and the participation of bidders
for e-bidding is very less.
The sustainability study of the system regarding the resources and technical
knowhow is yet to be conducted.
The legal frame work for the entire conception of the e-Procurement process is still
under question.
1.5
Research questions
This research will seek the following research questions to be answered.

What is the current practice in e-procurement?

What is the suitability of this system in the study area? What is the degree of
effectiveness? How extensively is this process being adopted/ preferred?
What are the pros and cons of using this system?
How e-procurement process can get its improved significance in DOI?

1.6
Objective of the study
General Objective: To find out the status of up taken e-Procurement System and its
future inprospective in Department of Irrigation.
Specific Objectives:

The study of the prevailing practice in the in procurement via electronic

means.

To measure the suitability, effectiveness and the extent of use of eProcurement System.
Recommend the best possible practice and the area of improvement for eProcurement within DOI.

1.7
Significance of the study
In these days, every single area, including the business world and its activities have
been greatly influenced by the use of Information Technology, being more general,
by the term e. The concept of the e-Governance has become a buzzword. With
this pace of time, the government system needs to be revitalized in every possible
field to be efficient, time and cost effective and less erroneous through such
evolving technology.
On the other hand, this system in the long run, has positive impact on the
environment as it aids for the zero- paper concept.
In either ways the study of e-procurement system has a huge significance in the
local, national as well as the global level.

1.8

The study outcome can be used for the system improvement.

It may be used as the reference tool to the implementing agency for
effective implementation.
It may be useful in the policy level for the appropriate decision making.
Scope and limitations of the study

Although the literatures will be collected reviewed regarding the practice of

e-Procurement System in other different organizations in Nepal, they will not
be under the analysis part, so the conclusion will not be enough for
generalizing the e-Procurement practice in whole Nepal. Hence the scope
and limitation of this research is worked out as below.
The study will be focused to the e-Procurement practice prevailing in the
selected Division offices under Department of Irrigation. The regular transfer
system of employee as well as the sudden placement of the employee may
limit the study to incorporate the information and the response from the
very few key informants only.
The key respondent for this study, the bidders, may not be representative as
the bidders, bidding only for the Irrigation Projects executed by the Division
offices will be considered.
In addition, as this department has been practicing the e-Procurement
System only for about last three years, the actual trend analysis will not be
available.

Hence, the overall scope of the study will be limited to the limited sample of

respondent and the key- informants of the specific area and the information/
database of only 2 years.

Chapter 2
Organizational Structure
2.1 Introduction
Department of Irrigation (DoI) is a government organization, with a mandate to
plan, develop, maintain, operate, manage and monitor different modes of
environmentally sustainable and socially acceptable irrigation and drainage systems
- from small to larger scale surface systems and from individual to community
groundwater schemes. Its ultimate aim is to provide year round irrigation facilities
and increase the irrigable area of the country to higher limits. This giving a primary
input in increasing the productivity of the land and providing a major input to the
GDP and eventually improve the standard of living of the beneficiary farmers. Apart
from this the DoI also has to carry out river training activities to protect the
floodways, floodplains and agricultural lands in the form of river bank protection
such that the loss of properties caused by flooding is reduced. (About Us:
Depatrment of Irrigation, 2009)
2.2 Organizations and Institutions under DOI
DoI is one of the departments under the MoI of Government of Nepal (GoN). There
are four divisions under the umbrella of DG in DoI. Apart from these divisions,
administrative branch, financial branch and legal branch are also directly
administered by DG. There are five Regional Irrigation Directorates in each region
under the supervision of DG. Twenty six irrigation development division offices and
twenty irrigation development sub-division offices in all regions work under the
supervision of respective irrigation directorates. Besides, there are eight irrigation
management divisions and 3 mechanical divisions in the structural organization of
DoI.

2.2.1 YGIG

Works Cited
American Heritage Dictionary. (2005). American Heritage Dictionary of the English
Language, 6th ed. New York, NY.: Houghton Mifflin.

Heeks, R. (2006). Implementing and Managing e-Government: An international Text.

London: Sage Publications.
Ho, A. (2002). Reinventing local Governments and the E-government Initiative.
Public Administration Review, vol 62, No4 .
ILO. (2005). Decent Civil Works in Nepal: From research to action Planning.
Kathmandu: International Labour Organization.
Manandhar, S. (Sep 4,2011). An Introduction to Electronic Government Procurement
(e-GP) In the context of Nepal.
Min, H., & Galle, W. (2003). E-purchasing: profiles of adopters and non-adopters.
Industrial Marketing Management, Vol. 32 No. 3 , 27-33.
Pearcy. (2008, 1 13). Using e-procurement applications to achieve integration: what
role does firm size play? Supply Chain Management: An International Journal , 2634.
Pearcy. (2008, 1 13). Using e-procurement applications to achieve integration: what
role does firm size play? Supply Chain Management: An International Journal , 2634.
PPA. (2063). The Public Procurement Act 2063. Nepal Gazette.
PPMO. (2068). Annual Report. Kathmandu: Nepal Government, Office of Prime
minister and Council of Minister,Public Procurement Monitoring Office.
Presutti, W. (2003). Supply management and e-procurement: creating value added
in the supply chain. Industrial Marketing Management, Vol. 32 No.3 , pp. 219-38.
Rabiaiah, & Vandijck. (2011).
Shah, S. N. (2009, August 6). E-Procurement Implementation Coming to Nepalese
Context. The Himalayan Times , 8.
Vandijck, R. a. (2011).
Worrall. (2011). Introduction to leading Issues in e-Government Research eGovernment- Where is it taking usand our Governments? in L. Worral (ed.).
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