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A Strategic Initiatives Towards National Prosperity
Khairul Rizal
Indonesian Procurement Professional Association (IAPI)
Bangalore-India May 18 th ,2013

+/-2600 km
5,251 km
‣ 33 Provinces - 497 Regencies - 530 Local Govt.
‣ Total Department & other govt Institutions-150
‣ + 240 million people
‣ 17.504 islands (1500 with no offial name yet)
‣ 740 etnics
‣ 583 local languanges

Indonesia (State & Region)
Annual Budget & Public Procurement
Expenses (in Billion USD)
194 201
256
136
147
54 58
77 81
102
2009 2010
2011 2012 2013*est
2011 2012 2013*
State Budget
(APBN+APBD)
Procurement
Expenses

How BIG THE SPENDING?
If Oil Production cost average 10 usd/BBL , Indonesian Public
Procurement spending is equivalent to 30 million BOPD
or +/- 30 % total world oil producing cost..

Bid-com-1
Bid-com-2
Bid-com-3
Bid-com-4
Indonesia Procurement
Organization (before –now-partly)
Head of
regenciy+
other inst
880
Head of
Division-1
Head of
Division-2
Head of
Division-1
Head of
Division-2
Head of
Division-25
Gov + Regencies = 530X25X4X5 = 265,000
Dept, & others inst , = (70 X5)X4X3 = 4200
Total = 269,200 people
3-7 members/bidcom

Indonesian Public
Procurement Challenges
Low Value For Money
Corruption Practices
Complicated Process
ICW (indonesian Corruption Watch):
Indonesian Corruption : +/- 30 % of procurement
budget (*2013 : est 30 Billion USD)
Equivalent to : development of new +/- 60,000
Schools or 20,000 Hospitals.
hospitals

Our objective :
We want to reform our public
procurement ....so we can create more
value from those +/-30% lost due to inefficientcy
procurement practices.... for
benefitting 240 million of our people....

• Government of Indonesia in 2007 Established LKPP
RI (Lembaga Kebijakan Pengadaan Pemerintah) –
National Public Procurement Agency as the leader
& Champion of National Procurement Reform.
• IAPI (Indonesian Procurement Professional
Asscociation) is a non profit organization founded
by Procurement/SCM Profesionals established in
2008 is LKPP partner in the Reform.

The
Procurement
Reform on :
A.System
Development
B.Infrastructure
Improvement
C.Human Resources
Development

A.System
Development
1. Regulation Reform to improve and
to optimize Procurement process.
2. Tranforming from Transactional to
Strategic Procurement towards
market driven price.
3. Improvement on Procurement
Governance.

A-1 Regulation Reform
1. Process Improvement & Optimization
Procurement time
from Tender
Announcement to
Contract (days)
30
23
15
K-80/2003 P-54/2010 P-70/2012
2. Clearer Process and all Parties job
Responsibility and Sanction.

A-2 Transactional to Strategic Procurement
1. Group Purchase among Procurement units
(Ministery /Department/Institution/Local
Government) .
2. Develop National Framework Contract
(Initiated and Signed by LKPP for the country
usage) ie: Vehicles (Cars,Trucks,Bikes)
,Medical Instrument & Medicines (final stage)
– No MORE TENDER on this items.
3. Shifted from “Adhock Team - Tender
Commitee” to a Permanent “Procurement
Unit (ULP) Organization”

A-3 Governance Improvement
1. Develop and Implement Whistleblowing system.
2. Apply Corruption sanctions to both Government
officials and Suppliers/Contractors (Previously only to
Government officials).
3. Improve and Implement a stronger Procurement Ethics
and Procurement audit.
4. Work with external anty Corruption Institutions
(KPK,BPK,ICW .KPPU and others) to ensure
Procurement transparancy programs are implemented.
5. Implementation of pinalty in both side Govt officials
and Suppliers. (ie. Late payment)

Where Corruption Take place ?

B. Infrastructure
Improvement
B-1 Develop Inaproc – National portal for
Tender Announcement.
All
Provinces &
Govt Dept

B-2 e-Procurement
a. Infrastucture Readiness :
(People,HW,System Integration)
All Institutions (350)
Prov +regencies (530)
85%
82%
94%
97% 100% 100%
Target 100 %
Ready
55%
27%
34%
Vendors
1%
5%
2008 1 2009 2 2010 3 2011 4 2012 5 2013*est 6
Registered
Verified
1.153 11.399 43.304 118.523 98.339
972 9.033 34.252 81.410 64.456

http://report-lpse.lkpp.go.id/v2/beranda
b. Current Statistics
731 Institutions
User

http://report-lpse.lkpp.go.id/v2/beranda
Total E-proc

c. e-Proc vs Total National Procurement Budget
(APBN+APBD) summary.
Target 100 %
In 2013, waiting for
Presidential Decree
100.00%
14.76%
0.01% 0.56% 2.26% 5.53%
2008
1 2009 2 2010 Series1
3
2011
4
2012
5 2013*est 6
15.4% 16.5%
10.7% 11.7% 11.1%
1 2 3 4 5

AWARDS.....
LKPP received FutureGov Award 2012
Winner:
LKPP (National Public Procurement Agency), Indonesia
National e-Procurement Project
Finalists:
• Ministry of Education, Singapore
Student Hub (SH) and Analytical Hub(AH)
• Adelaide City Council, Australia
Adelaide City Council 3D ModelProject
• Water Resources Agency, Ministry of Economic Affairs, Taiwan
Geographic InformationCentre
• E-Government National Centre, Brunei
e-Government Innovation Centre (eG.InC)
Public Sector Organisation of the Year - Asean
Surakarta City Government, Indonesia

C. Human Resources
Development
C-1 :Procurement Professional Dev.
C-2 : Competency Based Training Dev.
C-3 : Professional Certification Dev.

C-1 Procurement Professional Dev.
a. Develop Professional Competency standards.
(SKKNI)
b. Develop career path and progresion.
c. Management of ethics and development of
ethical code.
d. Evaluation of “standard” implementation.
e. Transforming from “Adhoc” team member status
to a permanent status in Procurement Unit (ULP)
to be a real procurement professiona.
f. Reduce people from 269,200 to 72,000 personnel

Bid-com-1
Bid-com-2
Bid-com-3
Bid-com-4
Good (3)
Services
COnsulting
COnstructio
C-1 Procurement Professional Dev.
Transforming from Adhoc team to PERMANENT STRUCTURE
Organization and reduce the numbers of professional.
Head of
regenciy
530
Head of
regenciy/
Dept
880
Head of
Division-1
Head of
Division-2
Head of
Division-1
Head of
Division-2
Head of
Division-25
Proc Unit
(ULP
Gov + Regencies = 530X25X4X5 = 265,000
Dept, & others insti, = 70 X5X4X3 = 4200
Total = 269,200 people
USER REP
Secretariat
70.000 to 80,000
professionals

Good (3)
Services
Consulting
Construction
C-1 Procurement Units Organisation
Head of
regenciy/
Dept
880 units
Proc Unit
(ULP
Secretary
USER REP

C-2 Competency Based Training Dev.
a. Develop training materials.
Basic training for “tender commitee”,-Tender
management based on Govt regulation.
Intermediate training for special competency
(How to determine Owner Etimate (OE), Contract
Management,Strategic Procurement, etc).
b. Certification of training institutions
c. Certification of trainers.
d. Programme planning,management and
evaluation.

C-3 Professional Certification Dev.
a. Conducted basic certification for all “tender
commitee” team member.
Year
No .of
Exam
Participants Pass %
2005 356 64.411 12.891 20%
2006 887 120.314 10.167 8%
2007 1241 138.670 20.967 15%
2008 1080 107.708 27.392 25%
2009 1130 111.323 37.525 34%
2010 1187 99.127 35.155 35%
2011 1697 122.088 33.375 27%
2012 1182 84.779 25.121 30%
8.760 848.420 202.593 24%

. Developing certification system for
intermediate and advance procurement
professional.
144,097
177,472
202,593
108,942
12,891
23,058
44,025
71,417
2005 2006 2007
2008
2009 2010 2011 2012
1 2 3 4 5 6 7 8

IAPI
(Indonesian Procurement Professional Asscociation)

ROLES OF IAPI
1. To Strengthen the pubic procurement reform program.
2. To Develop a synergy with Government and related
Institution in improving Indonesia public procurement
effectiveness and efficiency.
3. To support LKPP in develoving program to stop
corruption in procurement practices
4. To support Government in Procurement Regulation
improvement.
5. To Develop and to conduct professional competency
development program as a value added to members.
6. Conduct procurement Consulting and advisory services
to all parties concern.

IAPI GOLD CARD
1. Credit limit starting to USD 1000
2. Free Annual Fee
3. Discont in BNI merchants
4. Discont for all IAPI programs
(Training,Seminar,Conference
,purchase books ,magazine etc)
5. Having IAPI gold package

IAPI PLATINUM CARD
1. Credit limit starting at USD 2000
2. Free Annual Fee
3. Discont in BNI merchants
4. Free access 38 airport lounges
throughout Indonesia*
5. Discont for all IAPI programs
(Training,Seminar,Conference
,purchase books ,magazine etc)
6. Get IAPI Platinum or double platinum
package.

Riset on Vnedor
management
IAPI Membership Package
NO
PAKET
GOLD
PAKET
PLATINUM
DOUBLE
PLATINUM
UUP Y Y Y
Basic
GO-IAPI
I M
Mjlh/6X
III
Indonesia-English Journal
Indonesian
Procurement Reform
Toward Green
Procurement
Managing Chainge in
Procurement
Y Y Y
Y
Y
Y
Jurnal
3X
Credit
card
GOLD or PLATINUM
Based on Central Bank approval

OUR TARGET
BEFORE
AFTER REFORM
Procurement
Team &
Suppliers/
limited people
Procurement
Result
Procurement
Result
All
People of
Indonesia

Khairul Rizal
Khairul spent his 28 years experiences in Oil and Gas Industry He worked at : Asamera Oil,
Canadian Oil company, Risjad Salim Resources International, Indonesian Oil Company , Gulf
Indonesia Resources , Star Energy and currently Quest Geophysical Asia . When he worked as
Business Process Improvement Consultant in Gulf Indonesia Resources , He initiated ,
developed and implemented the first e-procurement in Indonesia.
His e-procurement initiative has become e-procurement model in Indonesian Production
Sharing Contract Oil companies and public procurement (government of Indonesia),
As one of the efficiency improvement result in Oil and Gas Industry In year (2005) Khairul
presented his paper “ Developing Supply Chain Hub towards national oil and Gas industry
efficiency improvement” in Indonesian Petroleum Association (IPA) annual convention –
attended by +/- 3500 professional from around the world , the paper was awarded as the best
business paper during the convention.
Khairul graduated from Geophysical Department Institute Technology Bandung (ITB) in October
1985 and earned his Master degree in Strategic Management . Currently He is Director of
PT. Quest Geophysical Asia – A multinational Oil and gas exploration company in Indonesia .
Khairul also one of Chairman of Indonesian Procurement Professional Association (IAPI) and
PPMPI which one of Itheir activity is delivering International Purchasing and Supply Chain
Management (IPSCM -ITC) training programs in Indonesia.

Thank you
www:iapi-indonesia.org