As part of its commitment to provide access to services online, the government yesterday announced the launch of a web-based Electronic Tendering System.

The new system will enable contractors to bid for government contracts online, without the need to submit pages of paperwork.

This pilot system represents one of the first of its kind in the world, using a smartcard internet-based secure electronic system. Smartcards are like credit cards, but have built-in chips with security measures.

Bids are submitted using the smart card and placed in an electronic box that cannot be opened until the due date.

"This project gives the UK government the opportunity to be at the very forefront of the development of electronic tendering," said Peter Gershon, an Office of Government Commerce executive.

Gershon estimates that the scheme could produce savings, from administration costs alone, of around £13m for the taxpayer over the next four years.