1. E-Procurement Linkage System Operations 2013. 4. Public Procurement Service

2. PPS and KONEPS Linkage PPS and KONEPS Linkage Current Status of Linkages Linkage Mechanics Suggestions Related to Linkage

3. PPS and KONEPS Linkage

4. 3 1. PPS and KONEPS Linkage Mgmt. for Property Mgmt. for Goods Contract Service Construction Service Stockpile

5. 4 TotalProcurement (101 billion USD) 35% of Total Korea’s public procurement market As of 2012 PPS PPS (35 billon USD) 1. PPS and KONEPS Linkage

6. 5 PPS (35 billion USD) 20% open to international companies As of 2012 2012 Market opening (7 billion USD) 1. PPS and KONEPS Linkage

7. 6 As of 2012 6% of Total Market Opening Volume Foreign suppliers (403 million USD) Market opening (7 billion USD) 1. PPS and KONEPS Linkage

8. 7 2002: Launched 2003: System upgrade 2007: Expands standard linkage 2009: Introduces mobile bidding 2013: Next-generation KONEPS Major Milestones Overseas Cases 2008: Vietnam 2009: Costa Rica 2010: Mongolia 2012: Tunisia Tunisia Uzbekistan Mongolia Vietnam Indonesia Costa Rica Peru Launched Being Ready 1. PPS and KONEPS Linkage

9. 8 Process Standardization Single Window One-stop Service 1. PPS and KONEPS Linkage

10. 9 All processes are digitalized from supplier registration to payment One-stop service is provided by using the linkage with 144 external systems Online Transaction Certificate Authorities Other Bidding Systems PG System (KFTC) Related Associations Certificate Authorities Financial and Accounting Systems G4C System Authentication Certificate Integrated Notice Commission for Bid Participation Supplier Data Authentication Certificate Contract information Certificate for Tax Payment G4C SystemPublic OrgSurely Company Encryption Key Issuance System Surely Company Financial and Accounting Systems Banks Supplier Registration Integrated Notice Bid Bond Encryption Time Stamp Contract / Performance/ Payment Bond Electronic Fund Transfer Supplier Registration Invitation For Bid Bid Opening /Evaluation ContractingBidding Delivery/ Inspection/ Acceptance Payment 1. PPS and KONEPS Linkage

11. Current Status of Linkages

12. 11 2. Current Status of Linkages The KONEPS can guarantee the precision of e-procurement transactions and seamless processing through linkages Info linkageFeature linkage Procurement info linkage Basic info linkage Procurement task processing support Procurement info sharing Supplier credit info Past performance Bond/ guarantees Tax info Product certification info Purchase request info Bidding info Contract info Supplier registration info Public authentication Electronic settlement Electronic payment Quality Certification info Product info Catalog info

13. 12 2. Current Status of Linkages 2.1 Procurement Processing Support: e-Bidding(1/2) KONEPS Credit Rating Agencies Product Quality Certificate Authorities Associations by Industry Public Org Linkage DB Administrative measure, Unjust supplier Info Credit level, Certificate Info etc. License, Human resource Registration Bid Submission Eligibility Test XML-SOAP Credit Rating Credit Info License Info. Certificate Info Human resource Info Pre- performed result Adminis trative measure

14. 13 2. Current Status of Linkages 115 types of information gathered from 60 organizations in four groups are linked for the purpose o f providing bidding information 2.1 Procurement Processing Support: e-Bidding(2/2) Linkage TypeLinked EntitiesLinked InfoComment Credit Rating Agencies 10 6 types Credit info, debt info, etc. Product Quality Certificate Organization 10 9 New Excellent Technology, Patent, KS Mark, etc. Associations by Industry 11 10 Financial info, projects undertaken, key technical personnel, etc. Other Public Entities 29 90 Info on administrative measures, unpaid taxes, temporary or permanent closure, etc.

15. 14 2. Current Status of Linkages Make sure all conditions have been satisfied before signing the contract so that everything can be done with high confidence and precision 2.2 Procurement Processing Support: e-Contract, e-Payment (1/2) Commercial banks Guarantee Company NTS/ MOSPA KFTC Bank account info Tax payment certificate Stamp tax payment info Tax invoices Contract deposits Payment deposits Bond purchases Network loans Linkage DB Guarantees, bonds, stamp taxes, network loans Accounts, tax payments, guarantees Contract signing Payment KONEPS Financial & Accounting System National finance Local finance Educational finance Other finances

16. 15 2. Current Status of Linkages Linking 385 types of information in 38 organization in four groups for information linkage in contra cts and payments 2.2 Procurement Processing Support: e-Contract, e-Payment(2/2) Linkage TypeLinked EntitiesLinked InfoComment Commercial Bank 17 13 types Kookmin Bank, etc. Surety Company 19 18 Seoul Guarantee Insurance Co., etc. Public agency 25 National tax-related info Financial Accounting System 3 74 National finance-related info

17. 16 In the case of shared services that can be used for general purpose, more effective, reliable servic e execution is possible through professional services 2. Current Status of Linkages 2.3 Procurement Processing Support – Related Feature Linkage (1/2) Performs security authentication on log-in & sent/received documents Security Authentication Electronic Approval Electronic Payment Public authentication module Electronic approval module PG module Performs electronic approval when processing approval in stages Performs electronic payment when making payments KONEPS Authenti- cation info Authenti- cation info Approval info Approval info Payment info Payment info Public authentication Public Institutions KFTC

18. 17 By using link modules provided by each institution, service linkage is made in real time whenever needed 2. Current Status of Linkages 2.3 Procurement Processing Support - Related Feature Linkage (2/2) PurposeLinked Entities Public Authentication Public authentication organization CA/RA/TSA systems Electronic Approval MOSPA “On-Nara” System Electronic Payment KFTC e-Payment System Linked InfoComment Public authentication certificate management; electronic signatureprocessing E-approval institution management; e-approved document processing Payment account management; payment transfer processing 6 including Korea Info Certificate Authority National instituti on standards Limited linkage

19. 18 Basic procurement information is collected from public entities and the comprehensive information gathered can be shared widely among users of the KONEPS 2. Current Status of Linkages 2-4. Sharing of Procurement Information (1/2) KONEPS Bidding Notice Self- contract Contract Request Public EntitiesLinked system National Finance System Self-bidding System Public Entity System Public Entities Private Suppliers Associations by Industry Supplier status+ Supplier performance Request Status+ Contract Status Bidding Notice+ Bid opening Procurement Request E-bidding E-contract Inspection/ supervision Payment

20. 19 The shared information provided by the KONEPS is in XML and data formats; this is then reproces sed into other usable formats for linked systems 2. Current Status of Linkages 2-4. Sharing of Procurement Information (2/2) Product Info Catalog Info Certification Info …… Shopping Mall System Catalog System Screening system to test contract fulfillment abilities KONEPS Product Certification Authorities Linked system Public Entities 3 Finance Systems Associations by Industry NEP/NET Recycled Produce Good Software Patent Utility Model KS Mark

21. Linkage Mechanics

22. 21 Standard Linkage System Registration InfoBid, Contract Info Credit Info guarantee Bid, Contract Info Pre-performed result Contract Info Certified Info Tax calculation sheet, Billing statement, Order sheet Housing bond, development bond, network Loan Contract, Invitation tender Catalog Info. Quality Certified Info Catalog Info 3. Linkage Mechanics Government/ Public Org Surety Company Supplier Product Quality Certificate Authorities Bank Other Bidding System Credit Certificate Authorities Related Associations Certificate Authorities Document Send/Receive Type Using the standard linkage solution of KONEPS, procurement information is sent and received in real time or in batches in document format Inquiry Service Type Only the information requested by an entity is provided in XML format in real time Relay Type Document relay is mediated through KONEPS between procurement info company and supplier 209 28 19 124 26 10 15

23. 22 Web Service Architecture Publish Find Bind Service Provider Publish Find Bind Service Provider Service Broker Service Requester Web Service Architecture of PPS Linked Institution System Service Broker Service Requester Web Service Info Related to e-Procurement G2B Registry ebRIM/ebRS UDDI Institutional System ASP-using Institutions Info-using Institutions Repository KONEPS has the structure of sending and receiving linked information throu gh web service 3. Linkage Mechanics

24. 23 Messaging system 호출 Document transfer Webservice system REMOTE SYSTEM APP execute module Security processing Packaging processing Header Schema validation check 감시 call Interface system Logging module DBtoXML XMLtoDB Communication processing Monitoring module Schema validation check module Header processing module Security processing module Packaging module Error log module Logging module (file) Error handling Remote individual system XML Doc store XML Doc creation KONEPS CONNECTION SYSTEM Sending XML storage Receivin XML storage XML Service log Supplier Info Integrated contract Info Webservice log Services Service binding Service link Error log module (file) Error handling Logging module Logging file directory APP execute module Schema validation check module User check module Security processing module Header processing module Packaging module Communication processing ’ Packaging Header processing Security User check Schema validation check Document receiving processing KONEPS provides the API solution for standardize linkage based on web service 3. Linkage Mechanics

25. Suggestions Related to Linkage Suggestions Related to Linkage

26. 25 Partnership terms must be explicitly specified through set of rules or MOU In particular, credit info and supplier performance must be updated with latest data For PPS, maintain partnership through national contract law and MOU M aintaining intimate partnership system with linked institutions U se of single standard under common protocol S trict insistence on security guarantee appropriate for different sets of information To maintain a huge amount of info in a consistent manner, it is critical to follow standards This is more important for info used by many institutions For PPS, linkage is maintained through compliance of standards like XML and SOAP Depending on type of linked info, security guarantee must be made in varying degrees In particular, containing personal info or sensitive corporate info calls for special attention For PPS, public authentication-based encryption and electronic signature be used 4. Suggestions Related to Linkage 4-1. Matters to Note

27. 26 4. Suggestions Related to Linkage 4-2. Way Forward By linking bidding notices of many countries, one can raise opportunity of participating high-quality suppliers Can improve reliability of bidding info through the use of trustful eligibility info To encourage international procurement, standardization of international procurement process and information items is called for After standardizing the basic process and info items, the same can be applied to individual processes and info items Overlapping procurement tasks, use of a common system may be possible Using a common system can guarantee high reliability and improved efficiency E xpansion of international procurement information S tandardization of international procurement process and info items U se of common e-procurement system for international transactions

28. 27 If there is a system which owns valuable information for procurement Just Link Provide Service and Acquire Information If there is no system and information go by the wayside manually 4. Suggestions Related to Linkage