80% decrease in tender lead times with the implementation of a Dynamic Purchasing System supported by Mercell
Directorate-General for Informatics (DIGIT) - European Commission
Industry: Public Sector
Module: Dynamic Purchasing System (DPS)
The Directorate-General for Informatics (DIGIT) is responsible for the digital infrastructure and IT services of the European Commission. These services support day-to-day efforts and help the European Commission and other European Institutions achieve their respective IT strategies while enhancing inter-institutional collaboration.
Within this mission’s scope, DIGIT is charged with providing the European Commission with hardware, software, IT services, and more recently, cloud services. Undoubtedly, the Dynamic Purchasing System procedure (DPS) which DIGIT elected to procure cloud services is as innovative and transformative as the object of the procurement itself.
For the implementation of its DPS, DIGIT chose Mercell until its own corporate procurement tool can provide support for such a procedure. Since its implementation, DIGIT has benefited from better access to the market and lead time efficiency improvements which saw an increase in procedural speed from a year to 2 to 3 months.
The European Commission’s strategy for the procurement of cloud services recognises the role of DIGIT as a centralised inter-institutional broker. DIGIT enables more substantial leverage from Institutions on the public Cloud market, facilitates cost monitoring and forecasting and provides guidance.
Getting to know the cloud services market
In 2014, DIGIT launched the CLOUD I tender, the first procedure towards the procurement of cloud services. CLOUD I enabled parallel studies of the cloud market, of the new IT dimension designed with cloud services, and of the optimal way to procure these services.
With CLOUD I, DIGIT learned that the market for cloud services, still very much in its infancy, was developing rapidly. Because of the nature of a procedure based on multiple framework contracts with reopening of competition, cloud service providers did not directly participate, only cloud resellers could join CLOUD I. This came at a financial cost and it did not reflect the reality of a market where new players appear, others leave, and a few grow to become competitive.
A new approach
The Commission wanted to make its procedure flexible enough in order to allow new players to join and enable providers to participate directly while giving time for European operators to grow in a market where many companies originally come from the US.
To achieve this, DIGIT proposed a completely new approach underpinned by a type of procedure which had never been used by the European Commission until then: a Dynamic Purchasing System (DPS).
With a DPS, new providers who were not ready at the start of the procedure can apply when they are mature enough and at any point throughout the DPS. This major benefit, together with the increased competition and the electronic format of the procedure, convinced DIGIT to launch the first DPS for the European Commission.
As a DPS is a fully electronic procedure, it must be supported by an electronic tool as per the regulation. DIGIT develops and provides the European Commission’s corporate procurement solution, which is an equivalent to the Mercell platform. However, since the European Commission had never published a DPS, its tool could not yet support all the necessary features to fulfil the legal requirements. This led DIGIT to investigate alternative solutions and ultimately, choose the Mercell tool.
"The Commission wanted to make its procedure flexible enough in order to allow new players to join and enable providers to participate directly while giving time for European operators to grow in a market where many companies originally come from the US."
Four major benefits
With the CLOUD II DPS, the European Commission experienced four benefits:
- Providers can join at any time in the procedure. Additionally, the fact that it is an electronic procedure makes it much easier for new participants to apply.
- Providers participate in the DPS directly instead of working with intermediaries. This results in significant financial gains.
- Quality driven. The technical requirements for cloud services are ultimately very complex. DIGIT’s Cloud Broker carefully crafted a catalogue of over 1,000 questions covering technical requirements. The Cloud Broker then selects from this catalogue based on the needs in the scope of a mini-competition. Such a process would be impossible to manage on paper. By reusing templates from one mini-competition to another, the final quality of offers is vastly improved. The Cloud Broker can be very specific about each technical requirement, thus continually raising the bar in terms of quality.
- Now that the catalogue of technical requirements is created, setting up a mini-competition with 1,000 questions can be done in a matter of days. It is rapid and customisable based on internal needs.
The gains in lead time were significant. In CLOUD I, the evaluation of tenders submitted on paper took many months because of their complexity. DIGIT achieved the equivalent in the CLOUD II DPS in a fraction of the time. From the opening of tenders to the final evaluation, the process can be as short as 2-3 weeks, even for very complex tenders. An average procurement project takes one year from identifying the needs to signing a contract. With the current DPS, DIGIT can make this happen in 2 months.
Easy evaluation for the evaluation committees
One of the areas which saw the most improvement is the collaboration during the evaluation. The feedback received from the evaluation committees notes how much easier it is for them to evaluate. Thanks to an intuitive interface, onboarding all committee members is effortless and happens very rapidly. Once everyone is on board, the tool adds transparency to the evaluation. The process can take place across multiple institutions without delay. It really helps the evaluation committee to establish their consensual decision.
On a broader scale, the impact of cloud services is massive, and they truly transform any organisation. With the innovations it triggers, the DPS has had similar transformative powers for the way DIGIT does procurement. DIGIT witnessed greater transparency, enhanced collaboration, and increased competition. These gains translate into efficiencies both for the internal processes and for the financial baseline. In addition, the DPS facilitated work from home and digital collaborations during the COVID-19 confinement.
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The following copyright credits are applicable to the photos of the Berlaymont building reproduced in this article:
- First image: Mauro Bottaro (Photographer) © 2018
- Second and third image: Etienne Ansotte (Photographer) © 2016