Business and Finance

Office of Government Procurement delivers results

Brendan Howlin, TD, Michael McKernan takes stock of the Republic’s reform process, stimulated by the financial crisis.

In recent years, almost every government activity in the Republic has come under scrutiny in order to establish firstly, if savings can be found and secondly, if the activity can be carried out more efficiently and effectively. All of this has been driven by the overriding public policy imperative of reducing the public expenditure deficit which had become completely unsustainable following the property meltdown and economic collapse in 2008.

It is not surprising therefore that public procurement, which accounts for direct purchasing of goods and services worth in excess of £9 billion per year in the Republic, has come in for particular scrutiny. The Department of Public Expenditure and Reform was initially charged to find savings of the order of €500 million over a three-year period across all public procurement as well as find out better ways of structuring this activity.

A survey of public procurement activity in Ireland revealed a multiplicity of contracting authorities and a multiplicity of approaches to procurement. Although there was a certain amount of central purchasing under the auspices of the National Procurement Service, this was restricted to goods and services traditionally procured by the Office of Public Works (OPW) and the Department of Defence on behalf of government departments.

In addition, many public sector procurers were carrying out their own separate (expensive) procurement competitions despite the fact that other public bodies were already running open framework contracts for similar goods and services.

The result of all the examination is the creation of the new Office of Government Procurement (OGP) which will centralise all government purchasing of common goods and services, and operate under the aegis of the Department of Public Expenditure and Reform. At the time of its establishment, the Government claimed the new OGP would deliver “sustainable savings for the taxpayer and make a significant contribution to deficit reduction.” It was further hoped that the OGP would bring together much of the scattered expertise, experience and knowledge about procurement into the one central organisation.

The Office of Government Procurement was established in 2013 with Paul Quinn appointed as Chief Procurement Officer. From that point the process of transitioning existing central purchasing entities under the OGP began in earnest. On 1 January 2014, the pre-existing National Procurement Service and the central National Public Procurement Policy Unit transferred over to OGP and a new executive management team was put in place.

Since then OGP has revamped contracting authority and supplier databases. It has continued centralising, setting up new framework contract arrangements and eliminating duplication. And the new organisation is also being pro-active. It offers new and more focused training for buyers and sets out to engage new sources of supply, particularly encouraging the increased use of electronic tendering.

However, centralised OGP authority is not a dictatorship. Contracting authorities are at liberty to procure outside of OGP frameworks where they can show it makes sense. This does require a value for money analysis which includes the full cost of running a procurement competition.

One recent achievement claimed for the new agency is the establishment of a new framework contract for the procurement of electronic portable computers and tablets across the public sector, which has reduced average costs by 30 per cent.

So far, the centralising of public procurement of common goods and services under OGP seems to be delivering. It is claimed that the targeted savings are being achieved. No doubt it has not all been plain sailing but there may be lessons in the Irish experience which could be worth learning in Northern Ireland.

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