E-procurement is a process of electronic based goods/service procurement (web or internet based). E-procurement is encouraged by the weaknesses of conventional system of procurement, which is done by direct meeting of related parties. E- procurement exists to make use of information technology advancement in the transparent, and fair goods and service procurement process. In reality, E- procurement has some difficulties and obstacles in the process.

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That is why it is important to know the application of e-procurement in every step and the effect of E- procurement application towards the performance and efficiency of procurement. The research is done in Ministry of Industry government institutions. This uses qualitative research with type a descriptive approach. Data sources used are primary data and secondary data. This research resulted in a conclusion that e-Procurement undertaken by Ministry of Industry has not reached the maximum; it is based on research results in the field.

The authors provide solutions related to the implementation of e-Procurement in the process of procurement of goods/services in Ministry of Industry consists of: Dissemination of goods/services procurement rocess electronically (e-procurement), the need for increased cooperation from all parties for the mechanism and process of supervision, monitoring and evaluation, the provision of facilities and infrastructure adequate technology particularly as supporting system of e- Procurement.

A. Basic Law of E-procurement in Indonesia Implementation of e-procurement to conform to the purposes and principles of procurement based on government regulations, namely (www. bappenas. go. id, 2009): 1. Law No. 11 of 2008, Transactions on Information and electronics. 2. Presidential Decree number 80 of year 2003 Guidelines for Procurement of Goods and Services. 3. Presidential Decree No. of 2006, on the fourth Amendment to Presidential Decree No. 8 of 2003. 4. Presidential Instruction No. 5 of 2008, about Focus Economics Program Year 2008-2009. 5. Presidential Instruction No. 5 of 2004, on the Acceleration of Corruption Eradication Rules used in the implementation e-procurement system at each public institution in Indonesia using basic Presidential Decree number 80 of year 2003 and its implementing regulations of each institution.

Therefore each of ministry in overnment must have their own Electronic

Page 2 Effect of E-Procurement in MOI Essay

Procurement Service [ LPSE -Layanan Pengadaan Secara Elektronik Procurement of goods / services electronically will increase transparency and accountability, improving market access and competition is healthy, improve the level of efficiency of the procurement process, monitoring and audit support and meet the needs of real-time access to information in order to create a clean and good government in the procurement of goods / government services.

BociJ, P. et al (2008,p48) stated that E-procurement is used to reduce administrative cost and urchase goods at lower price This section will explain the term of E-government and E-procurement. We need to understand these two terms since our focus deal with government and it’s procurement. 8. 1 E-government Many people understand the E-Government in the context of a narrow, a government agency has a web site (website) then it is said the agency has implemented the E- Government.

On the other hand there is the opinion that the government has implemented the E-Government when it has been thoroughly utilizing telematics applications, not Just having a website alone. At the beginning, e-government is more mphasized as an instrument in the process of administration. During its development, e-government can provide the transformation of the structure, processes, and functions of an organization. In general, one of the main components of e-government is a government information system that can provide online services via the Internet.

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