The Government’s Public Service Reform Plan sets out a comprehensive and ambitious programme of reform for the Public Service, including a range of commitments to deliver greater value for money in public procurement, which is one of the Major Projects of key strategic importance.
Earlier this year, as part of our drive for greater value for money and increased efficiency, my Department commissioned a capacity and capability review of the central procurement function to identify the actions required to realise substantial savings in public procurement in the short and medium term.
Approximately €9 billion is spent by public bodies annually on the public procurement of supplies and services, and the review estimated that €7 billion of this is "addressable spend". As the Deputy is aware, the review also estimated that implementation of its recommendations, over a three-year period, could yield potential annual savings in the range of €249 million to €637 million, depending on the approach taken.
One of the key outcomes of the review, which was published in September, was a decision by the Government to establish a National Procurement Office under the aegis of my Department, and that this Office should be headed by a Chief Procurement Officer. I am pleased to advise the Deputy that, following an open recruitment competition, Mr. Paul Quinn has been appointed as Chief Procurement Officer to lead the establishment of the National Procurement Office and the new approach to public procurement. Mr. Quinn will commence his work at end January 2013.
Our new approach to public procurement will also involve:
- integrating procurement policy, strategy and operations in one office;
- strengthening spend analytics and data management;
- much greater aggregation of purchasing across public bodies to achieve better value for money;
- examining the specifications set out for goods and services;
- evaluating demand levels to assess how demand can be reduced; and
- strengthening vendor and category management.
I want to emphasise the fact that the National Procurement Office will play a lead role in procurement policy, strategy and operations right across the Public Service. Public procurement is a very significant portion of overall spending and it is essential that the Public Service as a whole is achieving maximum value for money and operational efficiency in this regard.
The Office is being established on an administrative basis on 1 January, 2013 and a detailed Implementation Plan, which will include savings targets informed by the external review, will be submitted to Government by the end of Quarter 1, 2013.
