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By Jo Best, 21 January 2005 16:20

NEWS The EU has issued an action plan detailing how member governments can to switch to e-procurement before the implementation deadline next year.

The European Union agreed a legal framework for the introduction of electronic public procurement and is now advising governments how to change from paper to e-documents. The action plan says the spread of e-procurement can save governments "up to five per cent on expenditure and 50 to 80 per cent on transaction costs for buyers and suppliers."

However the document warns that the introduction of such schemes is not without its potential pitfalls.

"The inappropriate introduction of e-procurement carries high risks of market fragmentation. The legal, technical and organisational barriers that may result from procurement online are one of the greatest challenges for policy makers."

According to the agreed framework, all member states will have to implement e-procurement by 31 January 2006. The EU isn't expecting all member states to be on time though: "Slippages cannot be excluded," the action plan says, adding: "Member states should deploy all efforts to comply with the directive's deadline."

The EU will issue training demonstrations available to help aid those making the transition and will issue measurable performance targets.

In order to make the change smoother, the EU is recommending that member states tackle the issue of interoperability. Among its recommendations is the adoption of an e-signature system and the promotion of compliance verification schemes.

"In the long run, computerising public procurement practices will impact in the way in which national public purchasing practices are organised... The sooner such reforms are implemented the better for Europe's citizens and businesses," the report says.

The UK government is already implementing some moves towards electronic procurement, including a reverse e-auction system. An OGC spokeswoman told silicon.com that 20 e-auctions have taken place to date, with another 21 planned.

The online auctions have already saved the government £11m on contracts worth £75m, the spokeswoman said.