Minister Donohoe announces plans to increase use of centralised procurement arrangements
Minister for Public Expenditure, NDP Delivery and Reform Paschal Donohoe TD, recently (11th July 2023) brought a Memorandum for Government to Cabinet outlining plans to promote the increased use of centralised procurement arrangements across the civil and public service.
The Office of Government Procurement (OGP) and the sector procurement bodies in Education, Health, Defence, and Local Government have established 150 central buying arrangements across 16 main categories of expenditure. In addition to aggregating the buying power of the State and avoiding duplication of effort by public service bodies and suppliers, these solutions allow for the mainstreaming of green and social considerations into public procurement.
Over the lifetime of the procurement reform programme, procurement policy interventions have supported the implementation of green and social policy objectives, promoted SME access to Government contracts, and supported National Development Plan (NDP) delivery through construction procurement reform and the work of the Commercial Skills Academy.
The procurement of goods and services by the State, in line with Government policies, underpins the credibility of national environmental policy objectives and enhances Ireland’s image as a green economy. The Memo for Government outlined that that a Circular will be issued to all public bodies focusing on Government’s procurement policy regarding the use of central procurement arrangements. The Circular is provisionally scheduled for publication in early 2024.
It is intended that Departments and Agencies will report on their usage of central buying solutions, and where these central solutions are not used, the relevant contracts will be reviewed within the Department.
Minister Donohoe outlined the benefits of using centralised procurement arrangements, saying: “The use of centralised procurement arrangements by the public service is Government policy. These arrangements are based on the needs of public service bodies, and are designed in co-operation with those bodies, based on the capabilities of the marketplace. “Use of central procurement arrangements will ensure that Green Public Procurement becomes part of the mainstream public procurement process, while also aggregating the State’s expenditure, delivering value for money, and providing for process efficiencies. A collective effort across the public service is needed to achieve real procurement reform. OGP analysis indicates that the public sector spends around €18.5 billion on goods, services and works each year– in other words, nearly every one in five euro spent in the Irish economy is spent on public procurement. “My Department will consult with other Departments on the provisions of this Circular, and will ensure this requirement will be proportionate to the public service body’s size and scale.”
The proposed Circular will also aim to strengthen governance structures over the Public Procurement Reform Programme by strengthening sectoral representation on the Procurement Executive. The Procurement Executive enables co-operation and collaboration in delivering the Procurement Reform Programme, and comprises representatives from key sectors across the public service.
Minister of State with responsibility for Public Procurement, Ossian Smyth TD, welcomed the announcement, saying:
“In addition to delivering value-for-money and supporting transparency, the use of central procurement arrangements also supports Government’s horizontal green and social policy objectives.
“The procurement of goods and services by the State, in line with Government policies, underpins the credibility of national environmental policy objectives, and enhances Ireland’s image as a green economy.
“There is an onus on all of us to champion the Procurement Reform Agenda within our own sectors. Increasing the use of central arrangements across the public service will ensure that the full potential of the Procurement Reform Programme is realised.”
The Department of Public Expenditure, NDP Delivery and Reform will work to develop this Circular over the coming months.
The procurement reform programme was established ten years ago in 2013. In that time, there have been a number of key achievements, including:
- The establishment of the Office of Government Procurement (OGP).
- The establishment of change support structures notably the Interim Procurement Reform Board, the Procurement Executive, Category Councils and the Strategic Procurement Advisory Group.
- The establishment of 150 central solutions which have delivered value for money and process efficiencies which have reduced duplication of effort and supported SME participation in selling to Government. The introduction of the National Public Procurement Policy Framework, the overarching policy framework for public procurement.
- Increased procurement and commercial capacity and capability, including the establishment of the Commercial Skills Academy to support the National Development Plan.
- Improvements in spend data gathering and reporting resulting in improved transparency.
- Engagement and communications with all public service bodies including dedicated conferences, seminars, newsletters and website.
The OGP was established in 2013 and, together with four key sectors (Health, Local Government, Education and Defence), has responsibility for sourcing commonly used goods and services on behalf of the public service.
The OGP and its sector partners have established a comprehensive suite of central buying arrangements through which public sector bodies can buy goods and services. These arrangements aggregate the State’s expenditure, delivering value for money, providing for administrative savings and provide for the inclusion of green and social criteria.