Reform of public procurement is one of the major projects of key strategic importance in the Government’s Public Service Reform Plan. Procurement of supplies and services accounts for around €9 billion of current spending by the State per annum. This represents a very significant portion of overall spending and it is, therefore, essential that the Public Service achieves maximum value for money and operational efficiency in its approach to public procurement.
In this regard, an external review of the central procurement function was commissioned by the Department of Public Expenditure and Reform. The report of the review, which was published in late last year, found that significant savings can be achieved through the implementation of a transformational change to the central procurement model. The report estimates that implementation of its recommendations, over a three-year period, could yield potential annual savings in the range of €249 million to €637 million on an addressable spend of €7 billion, depending on the approach taken.
In order to realise these benefits the National Procurement Service has put in place a number of national arrangements designed to secure better value for money from leveraging the public service’s buying power in relation to a range of goods and services that are commonly purchased across the public service. These national arrangements have benefits that include:
- cash savings;
- administrative savings from reduced duplication of tendering;
- greater purchasing expertise;
- improved consistency; and,
- enhanced service levels.
In relation to plans for further reform of public procurement, the review also found that significant savings can be achieved through the implementation of a transformational change to the central procurement model. In December 2012, arising out of recommendations in the review of the central procurement function the Minister announced the appointment of a Chief Procurement Officer to lead a key element of the Government’s Public Service Reform agenda. The new approach to public procurement will involve:
- integrating procurement policy, strategy and sourcing 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 and volume can be reduced; and
- strengthening supplier and category management.
Since the appointment of the Chief Procurement Officer on 28 January 2013, he has initiated and completed a series of engagements (workshops and one-to-one meetings) with key stakeholders within the public sector and their representatives in relation to the development of the proposed governance structures, implementation plan, transition arrangements and savings targets for the procurement function. The following sectors were engaged in workshops / meetings: Health, Education, Local Government, Defence, Justice, and other Central Government Departments.
In order to encourage greater SME participation the National Procurement Service, over the past three years, has conducted a targeted programme of education for suppliers who wish to learn more about doing business with the Irish Public Service. This programme consists of seminars, workshops and large scale 'meet the buyer' events hosted nationwide. To date the National Procurement Service has facilitated workshops and presented at seminars to over 3,000 SMEs nationwide. Parallel with these events the National Procurement Service also works closely with business representative bodies such as ISME and IBEC to provide briefings for their members.
To summarise: we in government want better value for money for our substantial procurement spend and we want Irish SMEs, where necessary, to form alliances and networks to ensure they can tender on a competitive basis for this work.