Ministers Howlin & Hayes publish Central Procurement report

Public Expenditure & Reform Minister Brendan Howlin and Minister of State Brian Hayes today published the Report on the Review of the Central Procurement Function.

It is estimated that €9 billion is spent by public bodies annually on the public procurement of supplies and services. Minister Howlin said:

This is a very significant portion of overall spending and it is essential that the Public Service is achieving maximum value for money and operational efficiency in its approach to public procurement.

In May, the Department of Public Expenditure and Reform engaged Accenture to undertake 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.

Commenting on the review Minister Howlin said that it

…represented a radical new consolidated and integrated approach to public procurement.

The new approach 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 (i.e. centrally purchased);
  • examining the specifications set out for goods and services;
  • evaluating demand levels to assess how demand (volume) can be reduced; and
  • strengthening vendor and category management.

Minister Hayes spoke to on the report…

Of the estimated €9 billion spend, the Accenture review found that there is a procurement addressable spend of approximately €7 billion. The review 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, depending on the approach taken.

A detailed implementation plan and governance arrangements for the reform of the central procurement function, in line with the strategic recommendations of the recent report, will be developed over the coming months and will be submitted to Government by the end of Quarter 1, 2013.

Minister of State Brian Hayes acknowledged the work of the National Procurement Service since its establishment in 2009 saying that

The NPS has brought a real focus to the issue of better public procurement across the Public Service, not least the need for central framework agreements and the need to build capability for effective procurement within and across sectors.