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Government Procurement Reform IT 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 Business feedback

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Presentation Transcript
government procurement reform

Government ProcurementReform

IT 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 SERVICE

PUBLIC SERVICE

e.g. Ministries

e.g. NZDF, Police, DHBs

e.g. NZ Post, Meridian

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 reform11
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 contracts17
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 coe21
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

conclusion31
Conclusion
  • Open dialogue
  • Centre of Expertise
  • Improve efficiency
  • Market sustainability
  • Better value for tax-payers

31

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