Friday, March 5, 2010

Suggestion for improvement in procedures for outsourcing of e-Governance Projects to Private Sector


E-Governance initiatives in the country are still in Infancy and there exist many challenges in implementing the same. Traditionally Software Solutions for E-Governance projects were developed by NIC, and the Government department procured the hardware from Private companies. However with the increase both in complexity and the volume of e-Governance projects, most projects are being contracted to private parties. This note examines the various issues in implementation of e-Governance projects, role of NIC and provides Suggestions for improvement in procurement procedures for e-Governance projects

Summary of issues in Implementation of e-Governance Projects

  1. Implementation of E-Governance projects is still at infancy in the country. Very few projects have been implemented and only a proportion of these have been successful. E-Governance projects are both difficult to implement and take a longer duration for results to show Further they need a different skill set than that is available today with Government Servants.

  2. Lack of Capacity in Government to design and execute e-Governance projects. This lack of capacity is at all levels both political and administrative.

    1. Political leaders are not aware of the potential for transformation of Government through technology. They remain comfortable with large infrastructure projects that are easy to implement and involve large expenditure.

    2. The above is also true of Government Servants at all levels.

    3. Senior Government Servants are busy with their routine workload and they pass on the task to their subordinates. These officials may either ask NIC to help or may take the help of vendors to develop projects.

    4. E-Governance projects unlike an Infrastructure project are mostly first of a kind. The tender document has to be developed de-novo. The design of the project including technology choices, business model choices need to be thought through and articulated in the tender document. Issues like IT infrastructure services management, data security need to be considered and Government Servants have very little skills on these subjects.

    5. In many cases like the CSC, SWAN, SDC, e-District project, DIT has been playing an important role by providing consultants for preparing RFP's, assisting in bid evaluation and providing for IIIrd party audits. However it needs to be seen if the State Government Officials of the implementing agency in the State Government have understood the RFP at all or they just completely go by what is told to them by the consultant or alternately by a preferred vendor.

Role of NIC

  1. NIC has played a pioneering role in implementation of e-Governance projects in the Country.

  2. NIC officers largely enjoy the trust of the line department officials in implementation of technology projects

  3. The Government system of checks and balances and the rigidity of the tendering process also makes line department officials rely on NIC officials for implementation of e-Governance projects.

  4. NIC officials are present on most tender scrutiny committees for purchase of technology.

  5. However NIC currently suffers from the following drawbacks

    1. NIC officials are responsible only to their superiors in NIC and not to their customers in the line departments. Thus line departments know that they can't enforce accountability on NIC officials. In any project for a variety of reasons, deadlines may slip, however due to the fact that NIC officials don't report to line department, the line department officials may judge that this is because of indifference of NIC officials.

    2. NIC remains understaffed, there has been substantial attrition to private sector and there has not been fresh recruitment lately. The average age of NIC is over 40 as compared to any private sector company which is mostly staffed by your professionals.

    3. There has not been much skill up gradation among the staff of NIC and only a small proportion is comfortable on open systems and n-tier architecture

    4. Due to staff shortage, for most projects being developed by NIC, NIC takes software developers on contract from open market and then NIC staffers manage these outsourced resources. Similar to any IT company, there is a huge turnover of these outsourced resources leading to failure in knowledge transfer and delay in projects.

Way Forward –

  1. The way forward is not Private Sector or NIC but Private Sector and NIC working together for e-Governance transformation in the country

  2. Steps for improvement in outsourcing of e-Governance projects

    1. Transparent tendering process. The transparent tendering guidelines established by Finance Ministry, Central Vigilance Commission must be strictly followed in e-Governance projects. Karnataka has established a Karnataka Transparency in Public Procurement Act and it should be examined if such acts can be promulgated in other states as well. Alternately DIT should prepare a model tendering guidelines for any e-Governance project above the value of Rs. 5 Crores comprising of

      1. Adequate advertisement of tenders including website of NIC.

      2. Adequate time for response. Given the complexity of e-Governance projects a minimum time of 60 days for response should be given for all e-Governance projects

      3. Adequate time for submission of pre-bid queries and a minimum of atleast 2 pre-bid conferences. Responses to pre-bid queries to be published atleast 21 days prior to last date for submission of responses to tender.

      4. Adequate justification of technology, design choices. This can be either through a formal consultative process with industry prior to release of tender or contained as an annexure to tender.

      5. Transparent pre-qualification criteria based on the requirements of the Project.

      6. Transparent guidelines for bidding by Consortium. Consortiums should not be an excuse for bidding by non qualified partners through entering into teaming arrangements with qualified partners

      7. Projects to be outsourced to Central or State Public Sector entities like BEL, ECIL only if they have prior track record in execution of such projects and atleast 50% of the project value will be executed by the employees of the Public Sector undertaking. Backdoor outsourcing of projects to private entities under the cover of State public sector undertakings to be stopped.

      8. Provision for IIIrd party audits

      9. Provision of Service Level Agreements for measuring deliverables of the Vendor

    2. Risk factors and risk mitigation measures in any e-Governance Projects should be articulated.

    3. Technical experts including resources from NIC that are part of any committee for design of e-Governance projects or evaluation of technical bids should provide individual written submissions that should be enclosed with the minutes of the meeting.

    4. Comprehensive section on IT service management, data security, IT infrastructure security in the RFP's. Probably model sections can be developed by DIT which can be adapted by the line departments for their RFP's

    5. Use of automated Software code repositories for storage of the deliverables of the Vendor. This will be helpful in case of disruption of services of vendors.

  3. Steps need to be initiated in improving the capacity within Government for implementation of e-Governance projects. There is an increased dependence on short term private sector resources either provided by consultancy firms or recruited directly from market. Such a practice has many drawbacks and should be reduced.
Steps need to be taken for improving the capacity of NIC for increasing their role in implementation of e-Governance projects. Structural reforms need to be carried out for increasing Salary and benefits. Also structured feedback from line departments should be an important criteria for promotions and granting of incentives for officers in NIC.

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