Procurement Minister, Brian Hayes TD today announced the outcome of his supplier talks initiative which has shown savings to the State of €41m from top suppliers to government of goods and services.
Minister Hayes said: “Getting better value for money from our suppliers is crucial to the government’s work and mandate. Latest figures show we spend €9 billion procuring goods and services. One of the first things I did in coming into government was to initiate supplier talks with the leading government suppliers. I made it clear that, in future, the government will use its considerable purchasing power to get better prices, doing exactly what the private sector does when it meets its suppliers. I initiated a series of meetings between the NPS and top suppliers, with a view to negotiating a dividend to the State and clarify the extent of better pricing of goods and services being obtained by Government”.
The Minister continued: “As a direct result of this initiative, suppliers have so far committed to new dividends and discounts of €6m in 2012 and into 2013. The initiative also identified that State bodies are receiving additional better value from these companies through improved tender prices, procurement practices, Pro Bono work and discounts amounting to €35m since 2011”.
The Minister concluded: “ This exercise shed light on procurement practices throughout the public sector – the good and the bad practices. I found different prices being charges to different public bodies for the same goods or service. I found some suppliers continuing to provide goods despite being out of contract for some time. Some public bodies were aggressively looking for discounts, others were standing back. What is absolutely clear is that a whole of government approach to procurement is the right road to follow with fewer people in procurement but with more specialist knowledge of markets and negotiation experience. And that’s exactly what we have to do”.
“Before this we didn’t know who the main suppliers were. All of the companies are in no doubt that all future interactions with the public sector should be with the most competitive pricing possible and that the public sector should be treated as a single customer. The State is now able to identify with clarity the extent of better value being obtained from these companies compared with previous contract prices”.
Ends…
For further information or if you wish to interview Minister of State Hayes, please contact Colette Davis OPW Press Officer at 046 9426128 or 087 9475552 or
colette.davis@opw.ie
Note for Editors:
A critical part of the process was the undertaking by the Minister and his officials to maintain confidentiality on all discussions and outcomes from this process. The majority of firms entering into this process partook on this basis and would not have entered into discussions without this undertaking.
The NPS engaged in a supplier research exercise to identify suppliers suitable for inclusion in the Ministers exercise.
This research was a desktop exercise, which was carried out using a number of different sources. The primary source and the starting point for this exercise was a survey carried out by the National Procurement Service in 2010-2011.
Following this research the National Procurement Service shortlisted companies who had transacted substantial business with State bodies in the 3-5 years preceding the research. The suppliers chosen came from a wide range of business areas including legal, financial and management consulting services, ICT, waste management, facilities management, catering services, telecommunications and human resources management.
Suppliers also made a wide range of proposals regarding future savings and efficiencies.
Table: Breakdown by category – Pro bono services and discounts from suppliers
Category Value (€000s)_
Information and Communications Technology 13,432
Business/Management Consultancy 21,020
Legal 2,535
Catering/Facilities Management 4,354
Total 41,551