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The purpose of this page is to introduce the Procurement for Public Sector scenarios and provide a high-level overview of the available functionalities.


Public procurement organizations face a unique challenge: find ways to cut costs and speed delivery of goods and services in the face of lengthy labor, time, and paper intensive processes and regulations. Already constrained by a highly structured and regulated environment, many of these organizations - yours may be one - confront a range of procurement challenges. Are your procurement processes characterized by manual, disjointed steps and an overall lack of standardization and consistency? In such an environment, it is hard to identify savings opportunities, especially when you are working with redundant and inaccurate information stored in disparate applications. Perhaps there is no integration between your contract management processes and your financials and logistics software. This makes it difficult to manage multiple procedures such as budget checking, competitive bidding and tendering, and supplier certification. Such challenges leave you at high risk of noncompliance with internal guidelines and public regulations. They also hamper your ability to streamline processes or identify areas for improvement. The SAP Procurement for Public Sector package can help you address these challenges as well as support your e-procurement and self-service procurement requirements. Tailored to meet the needs of public sector organizations, it lets you maximize your purchasing power and control your procurement life cycle from end to end - whether your procurement needs are simple or complex.

SAP Procurement for Public Sector is about extending the capabilities of standard SAP applications by addressing public-sector-unique requirements outside the scope of core SAP. The main PPS Business Scenarii are the following:

  • Procurement for Public Sector: Public Tendering
  • Procurement for Public Sector: Contract Management and Administration
  • Procurement for Public Sector: Operational Procurement
  • Procurement for Public Sector: Procurement Services


Hierarchies including flexible item numbering

  • Enables comprehensibility and ease of data maintenance
  • It facilitates structuring and visualization (comparison) of line items in hierarchies
  • Separation of “functional items” from “statistical items”

Optional Line Items

  • Options allow pre-negotiated optional lines for procurement document.
  • Pre-negotiated prices/conditions for a future period, simplify procurement process.

Pricing Arrangement

  • Flexibility to define a broad spectrum of risk sharing models for use on procurement documents
  • Public sector pricing generally includes several components other than quantity and price, for example- cost, fee, incentive, award, etc
  • Pricing arrangements refers to these complex pricing schemas with several components

Smart Numbering

  • Framework for naming Procurement documents according to naming schema mandated by rules followed by the organization.
  • It allows the flexibility to generate procurement document number (i.e. smart number) based on customizable naming schema in addition to the SAP internal procurement document number.

Park and Hold

  • With this feature, customers get the flexibility to Park SRM Procurement documents, once the procurement data is entered, in case the document contains incomplete or incorrect financial data.

Public Sourcing and Tendering

  • Earnest money deposit process
  • Tender fee
  • Tender committee meeting for short list
  • Two-envelope support (Technical + Price bid)

Synopsis (bidding announcement)

  • Government organizations require to make public announcements at different stages of their procurement cycle
  • Synopsis enables customers to integrate/communicate (via XML) with external entities like marketplaces
  • Furthermore, using Document Builder, it is possible to generate customized synopsis formats.

Records Management Integration

  • Records Management replaces paper records with digital records based on electronically stored documents.
  • PPS provides capability for maintaining such records at various steps in the procurement process.

Document Building Capabilities

  • Enables generation and maintenance of simple to complex documents quickly and easily, using customer defined formats, templates, and clause content. This can be very useful in contract management.
  • It is a highly configurable solution that can fit into diverse document building requirements for an organization.

Technical aspects

Procurement for Public Sector is supported in Extended Classic Scenario deployment. The following technical scenarios are NOT supported for SAP PPS: Classic scenario (prerequisite for the Service Procurement business scenario), Standalone scenario and SAP SRM in one client in SAP ERP.

Activating PPS in Customizing

In SAP SRM, the following business functions should be activated:

  • SAP SRM Procurement for Public Sector Basis (/SAPPSSRM/SRM_CROSS_INDUSTRIES)
  • SAP SRM Procurement for Public Sector Functions (/SAPPSSRM/SRM_PPS)

Main changes in procurement process at a glance

  • Stand alone and classic scenario not supported
  • Shopping cart renamed to Purchase Requisition
  • Shopping cart generate (pre)commitment in funds management
  • Contract can create Funds Reservation (Earmarked Funds) in Funds Management as a Guarantee
  • Goods Receipt and Invoice created in ERP
  • Mixed PO: PO with lines that works like contract lines, a PO can be created from these lines
  • PO created from contracts or mixed-PO is named call-off PO. Only is a new name, is a "normal" SRM PO
  • Goods receipt possible in SRM only in "easy" cases

Related Content

Related Documents

SAP Help: Procurement for Public Sector

Related SAP Notes/KBAs

KBA: 2468315 Procurment for Public Sector not supported in SUS