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Government Procurement Reform. MFD Sector Briefing. 1. Agenda. Background Machinery of government Procurement reform Business participation All of Government contracts Sector specific data Conclusion. 2. Background. 3. Why reform procurement?. 30 – 70% of operating costs

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Presentation Transcript
government procurement reform

Government ProcurementReform

MFD Sector Briefing

1

agenda
Agenda
  • Background
  • Machinery of government
  • Procurement reform
  • Business participation
  • All of Government contracts
  • Sector specific data
  • Conclusion

2

why reform procurement
Why reform procurement?
  • 30 – 70% of operating costs
  • Business feedback
  • Economic downturn
  • Unacceptable risk profile
  • Lost efficiency opportunities
  • Build strategic capacity

4

ministerial support scrutiny
Ministerial Support & Scrutiny
  • Hon Bill English (Chair)
  • Hon John Key
  • Hon Gerry Brownlee
  • Hon Simon Power
  • Hon Tony Ryall
  • Hon Stephen Joyce
  • Hon Rodney Hide

5

governance
Governance
  • Expenditure Control Committee
  • Chief Executive VfM Group
    • Government Procurement Reform (MED)
    • Administrative Services Review (The Treasury)
    • Cross cutting Value for Money initiatives

6

government structure
Government Structure

PUBLIC SECTOR

STATE SECTOR

STATE SERVICES

PUBLIC SERVICE

e.g. Departments

e.g. NZDF, Police, DHBs, Crown Entities

e.g. NZ Post, Meridian, Uni’s

e.g. Local Government

8

reporting and barrier removal
Reporting and barrier removal
  • Quarterly reports to Cabinet
  • Minister briefings
  • Intervention reports to ECC as needed
  • Ministers notified:
    • Good practice
    • Undermining behaviour
    • Ministerial intervention needed

9

procurement reform1
Procurement Reform
  • Cost Savings
  • Capability and Capacity Building
  • Enhanced Business Participation
  • Governance, Oversight and Accountability

11

key reform aspects
Key Reform aspects
  • 4 Year programme
  • Supports other VFM initiatives
  • Transform procurement thinking
  • Strategic procurement capability

12

enhanced business participation
Enhanced Business Participation
  • Cutting red tape
  • Improving transparency
  • Increasing opportunities
  • Sustainable markets

13

business feedback
Business feedback
  • Procurement capability
  • Conditions of contract
  • Standard documentation
  • Evaluation method
  • Futile bidding enquiries
  • IP risk
  • Engagement

14

target areas
Target Areas

Secure Supply

Strategic Critical

Risk

Streamline

Tactical Sourcing

Value

16

all of government contracts1
All-of-Government Contracts
  • National/international market dominated
  • Common needs
  • Lower supply risk
  • Reflect other jurisdictional experience
  • Not syndicated contracts

17

key drivers
Key Drivers
  • Need for change
  • Strong performance management
  • Reduce overhead
  • Total cost evaluation
  • Meet diverse customer needs
  • Maintain/enhance competition

18

transition
Transition
  • Managed transition
  • Soon as practical
  • Aim for 100% by 30 June 2012
  • Current contracts:
    • Extend till transition period
    • Re-tender

19

centres of expertise coe
Centres of Expertise (CoE)
  • Additional resources
  • Dedicated category managers
  • Strong market knowledge
  • Relationship management
  • Key performance measures
  • Supplier incentives

20

centres of expertise coe1
Centres of Expertise (CoE)
  • Desktops/Laptops - DIA
  • MFD’s - DIA
  • Vehicles - MED
  • Stationery - MED

21

key data

Key Data

Craig Doherty

22

data collection
Data Collection
  • State Sector data
  • 163 of 198 agencies responded so far
  • Analysis based on information submitted
  • Further validation to be undertaken
  • Firm up demand during budget setting

23

spend units by sector it hardware
Spend & Units by Sector – IT Hardware

Note: Number are rounded to $1M

24

pareto significant procurers mfds

12.0

80% of total spend

10.0

8.0

6.0

4.0

2.0

$M

Pareto – Significant Procurers MFDs

25

timelines
Timelines
  • Establish CoE team now
  • Market engagement
  • Firm up demand by Christmas
  • Out to Market quarter 3
  • Contract award by June
  • Mobilisation from July

27

challenges
Challenges
  • Minister expectations
  • Diverse client base
  • Change management
  • Undermining activities
  • Sabotaging behaviour

28

summary
Summary
  • Change management project
  • Strong agency support
  • Ministers will remove barriers to progress
  • Dedicated category management
  • Supplier incentives
  • Transition as soon as practical

29

conclusion1
Conclusion
  • Open dialogue
  • Centre of Expertise
  • Improve efficiency
  • Market sustainability
  • Better value for tax-payers

31

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