Cap Gemini Ernst & Young have entered into a contract with the government regarding the provision of E-procurement services, State Services Minister Trevor Mallard announced today.

Trevor Mallard says the e-procurement project is designed to shift government agencies to buying consumables on-line, which provides a more streamlined and cost effective method of interacting with businesses.

Seven consortia responded last year to the Government’s call for proposals to provide the service. Cap Gemini Ernst & Young are the successful service provider, using software from Oracle. The system will be hosted by Datacom, who are also hosting the new Government internet portal.

A $250,000 pilot is to be run between April and September 2002. The pilot phase involves testing the functionality of the system, and working with each government agency to demonstrate the abilities of the system and how it could be implemented in their agency.

Potential users include government departments, Crown entities (including district health boards, tertiary education institutions and Crown research institutes) and local authorities.

If the pilot is successful and agencies commit to use the e-procurement service, it will be made available from October 2002 for operational use.

The operational phase of the e-procurement project has a contract cost of $7.5 million over 5 years. The State Services Commission’s E-government Unit estimate that the annual spend likely through the e-procurement system is $250 million and benefits of at least $20 million over 5 years are forecast.

Trevor Mallard says 14,000 public servants could have access to the e-procurement system and 350,000 purchase orders per annum could potentially be processed through the system.

“This will encourage New Zealand companies to go on-line in order to serve government agencies, which will be a big step forward for New Zealand e-commerce,” Trevor Mallard said.