merrion street

The Minister of State with special responsibility for Public Procurement, Eoghan Murphy, T.D., today launched the Office of Government Procurement’s Public Service Spend and Tendering Analysis for 2014 Report.

The report continues the work of the OGP in increasing openness and transparency on public expenditure by analysing data from across the public service on how public funds are spent on goods and services.

Welcoming the report, Minister of State Murphy said: ‘This report analyses just under €4 billion – or two-thirds – of public procurement spend for 2014. The value of this work by the OGP is the transparency it brings to how money is spent. The data analysed indicates that 95% of the State’s expenditure is with firms within the State’.

Noting that the majority of the spend analysed is with SMEs, Minister of State Murphy added: “Public procurement is a major opportunity for SMEs. This report will provide businesses with a better understanding of where current and future opportunities lie. Equally important, in terms of SME access to government business, is the report’s highlighting that, in the majority of spend areas, the typical tender value is less €100,000.”

Notes to Editor

This Public Service Spend and Tendering Analysis for 2014 is the Office of Government Procurement’s (OGP) second annual report that analyses expenditure and tendering activity on goods across Public Service Bodies (PSBs) in Ireland. One of the OGP’s strategic objectives is to improve the transparency of spend across public service bodies to support more effective sourcing strategies, procurement execution and value for money.

The spend analysis in this report is based on expenditure data that has been gathered from PSBs and excludes expenditure that is not addressable by public procurement such as third party grants or payments made by one public service body to another. The procurement addressable spend, excluding major capital projects, under the remit of the OGP and its sourcing partners in the Health, Education, Local Government and Defence sectors is estimated at €6 billion annually. Two-thirds of this estimated procurement addressable spend is analysed in this report.

The analysis of tendering activity is based on data from eTenders, the Government’s national web-based electronic tendering platform administered by OGP, excluding semi-state organisations as these bodies are not under the procurement remit of the OGP and its sourcing partners.

Key findings of the Public Service Spend and Tendering Analysis 2014 Report:

Public Service Spend Analysis
· Total value of 2014 spend analysed was €3.931 billion.
· 95% of the 2014 analysed spend is within the State.
· Medical, Surgical and Pharmaceutical Supplies is the largest spend area with 18% share of analysed spend.
· The majority of the spend analysed is with SMEs with a slight increase in the 2014 profile of SME to large suppliers to 55:45% from the 54:46% 2013 updated profile.

Public Service Tendering Analysis
· The volume of 2014 published tender notices analysed was 4,121 (increase of 17% compared to 2013).
· The estimated contract value of the analysed tender notices was €3.561 billion (decline of 18% compared to 2013). The drop in value is attributable to some large one-off contracts published in 2013 that were not repeated in 2014,
· The average estimated value of 2014 published tender notices analysed is €864,000 as against €1.24 million in 2013 while the 2014 median (typical) value is €100,000 compared to €80,000 in 2013
· The Construction and Civil works category accounts for 52% (€1.84 billion) of the total estimated contract value of published tender notices with an average value of €1.52 million and a median (typical) value of €170, 000;
While the average contract value of 2014 tender notices analysed by spend category ranges from €10.1 million (Utilities) to €115,000 (Veterinary), the median values range from €170,000 (Construction and Civil works) to €50,000 (Marketing, Print and Stationery)
The median contract value of 2014 tender notices is less than or equal to €100k in 12 of the 16 spend categories.

About the Office of Government Procurement
· The OGP commenced sourcing operations in 2014 and, together with four key sectors (Defence, Education, Health and Local Government), has responsibility for sourcing all goods and services on behalf of the public service. These operations put in place contracts and framework agreements so that public bodies can buy goods and services. In addition, the OGP has responsibility for procurement policy and procedures, sourcing systems and data analytics.
· The Government has tasked the Public Procurement Reform Programme with delivering sustainable savings for the taxpayer, consistent implementation of policy, reduced risk for the State, and improved data provision.