1. February 17th 2005 Slide N° 1 / 17 French MOD e-business presentation French MOD e-procurement ------------------------------------------- ‘Possibility for businesses to fully seize market opportunities’ Michel Cadic @dga.defense.gouv.fr

2. February 17th 2005 Slide N° 2 / 17 French MOD e-business presentation The aim : to be more efficient in procurement 30 % of RFI - RFQ are closed without contract 30 % of RFI - RFQ are closed without contract To reduce the costs of supplies by 25 % To reduce the costs of supplies by 25 % To give easier access to public procurement to : To give easier access to public procurement to : - SME’s -European companies A full dematerialised process from the requirement to the payment A full dematerialised process from the requirement to the payment DGA project enlarged to MOD : 15 to 17 G€ purchase /year DGA project enlarged to MOD : 15 to 17 G€ purchase /year

3. February 17th 2005 Slide N° 3 / 17 French MOD e-business presentation Internet Network Defence market place IXARM.COM portal ACHATS.DEFENSE.GOUV.FR portal Contract French MoD market place : e-purchasing approach

4. February 17th 2005 Slide N° 4 / 17 French MOD e-business presentation Internet Network Secured private Network (not link to Internet) ESPACE PARTENAIRES Suppliers Armed Forces Others state services : minister of finance… DGA Defence market place IXARM.COM portal ACHATS.DEFENSE.GOUV.FR portal Partners Network Area Contract French MoD market place : e-purchasing approach

5. February 17th 2005 Slide N° 5 / 17 French MOD e-business presentation Market place architecture Market room Suppliers data E-catalogue E-auctions E-invoice RFI notice E-offers by suppliers Consultation management >RFQ e-files technical documents www.ixarm.com Armed forces equipment Acquisition equipement Defence R &D achats.defense.gouv.fr - general equipment : - infrastructure - fuel - health furniture - food - clothing BOAMP JOUE OTAN OCCAR Notification e-awarding Information on public procurement

6. February 17th 2005 Slide N° 6 / 17 French MOD e-business presentation A fully operational market place since November 2002 220 main purchasing entities, Around 9000 registered users –buyers : 2000 –suppliers : 18 000 users, including 7000 registered Higher transparency of public procurement  100% RFQ above 90 K€ are published on the market place »4 k€ < ± 80% RFQ published < 90 k€  In number : »7000 calls for tenders published (with their technical and administrative files) »More than 55 000 downloads by suppliers Year 2004 statistics

7. February 17th 2005 Slide N° 7 / 17 French MOD e-business presentation Statistics : call for tenders publication

8. February 17th 2005 Slide N° 8 / 17 French MOD e-business presentation First aim : to fully seize market opportunities, public procurement is open to new suppliers Portals design for supplier’s incentive : Portals design for supplier’s incentive : –> To –> To Facilitate and secure the candidature step –All free access for suppliers, –All necessary information (laws, adm. formularies, how to get in touch with buying entities…), –Ordinary computer, just Internet link. Ixarm : far further than only advertising RFQ Ixarm : far further than only advertising RFQ –Both in French and English, –Description of main defence programs, –Spontaneous proposals authorized (research…) –Marketing place for supplier’s adverts on their know how

9. February 17th 2005 Slide N° 9 / 17 French MOD e-business presentation Front page “ixarm.com” portal

10. February 17th 2005 Slide N° 10 / 17 French MOD e-business presentation Statistics : downloads by suppliers

11. February 17th 2005 Slide N° 11 / 17 French MOD e-business presentation Change Management : Key factors Change management internal +external : 2/3 of the results Not to be concentrated on tools Think simple, easy to use Demystify dematerialised process on Internet Don’t match tool changes and buying process changes : –No big bang –Incremental process : step by step, –What are the earnings / expectations of the buyers and the suppliers : – A win-win process :  Efficient procurement needs two efficient partners

12. February 17th 2005 Slide N° 12 / 17 French MOD e-business presentation Change Management towards suppliers Actions done with success :  Meetings with professional organisations  National and local meetings at the beginning of 2004 : 1500 suppliers  Online “Handbook”, Online FAQ,Web “Hotline”  E-call for tenders training in order to test their ability to answer correctly  Personalised home page : specified interests and be awarded of new tenders ( 173 000 alert mails sent to registered suppliers in October 2004) Data base for suppliers :  1st step (done) : enable Cies to download all administrative documents  2nd step (June 2005) : Cies fill a data base in order to have not to send candidature files (75 % data common for the MOD) »In order to facilitate and secure the candidature step

13. February 17th 2005 Slide N° 13 / 17 French MOD e-business presentation Difficulties and perspectives for suppliers : the most important challenge Very good perception of the push of tenders on the market place, but reluctance to go further  To incite suppliers to register : 85% of the downloads are done by unregistered suppliers  Develop e-offers (only 213 since January 2004) v/s answers still through paper way  To generalise the opportunities to use electronic-exchanges (collaborative exchanges for programs …)  Different standards used by marketplace  Difficulty to have access to high speed network  Perception of risk level : shared between supplier and purchaser in private sector, all risk supported by suppliers in public sector. Difference between SME and big Cies  Security approach  Internal process to elaborate offers  Responsibility / Electronic Signature delegation

14. February 17th 2005 Slide N° 14 / 17 French MOD e-business presentation Focus on 2 difficulties Electronic certificates –Survey with French partners (National Imprimery, local authorities…) on 3000 suppliers :  7% have a certificate  > 30% don’t know where to buy it  < 30% don’t know what it’s for –It’s easier to sign a paper than by electronic way –High security certificate with face to face delivery / but it’s impossible to oblige a CEO to go himself in a post or bank office to take it  Difficult to define compromise : security / pragmatism Encryption / anti-virus : contradiction between two goals  Public purchaser shall not be attacked by virus put in the offer  Supplier shall be confident that public purchaser will not see the offer before official evaluation committee  Trust and security : find a compromise too

15. February 17th 2005 Slide N° 15 / 17 French MOD e-business presentation Conclusion for French MOD market place Public buyer’s side :  A real success for the e-call for tenders,  Already high positive Return on Investment :  Project costs 2000-2004 :4 people project team, 7 M€ (ASP mode)  Earnings : transparency, “soft money” / administrative costs : 2 M€ in 2003, 18 M€ in 2004, “hard money” / on supplies : not yet measurable Supplier’s side :  Success for downloads,  For other possibilities of the procurement cycle (e-tenders, reverse auctions..) : only if suppliers could find their own interest on it

16. February 17th 2005 Slide N° 16 / 17 French MOD e-business presentation Conclusion How to go further with at European level ?  Certificates : Bridge Certification Authority project to enlarge  Now it’s quiet impossible to receive trans-borders e- offers if the supplier hasn’t local (buyer) certificate  Reverse-auction code of conduct  To develop common supplier’s register  To incite development of high speed network  To prompt interoperability / standardisation (XML, private supply-chain compatible or not with public standards)  To help to conduct change management towards suppliers

17. February 17th 2005 Slide N° 17 / 17 French MOD e-business presentation Questions ? More information on : –www. ixarm.com (both in French and English) –www. achats.defense.gouv.fr (French) –mails : michel.cadic@dga.defense.gouv.fr emmanuelle.plessiet@dga.defense.gouv.fr