THE GOVERNMENT could make savings of €50 million to €70 million annually through a new approach to the purchase of supplies by public service bodies, Minister of State for Public Service Reform, Brian Hayes, has said.
A Cabinet decision was made two weeks ago to mandate Government departments, local authorities, the Garda, the Defence Forces and non-commercial State agencies to avail of national contracts put in place by the National Procurement Service (NPS).
Since its establishment in 2009, the NPS has placed contracts for a range of commonly acquired goods and services including electricity, natural gas, print advertising and stationery.
Mr Hayes, who has specific responsibility for procurement of goods and services, said it was “a big milestone” in public sector reform for the Government to mandate the public sector to use centralised framework contracts.
“Up to now, there was no requirement on departments and agencies to use contracts procured centrally. That’s all going to change now and the savings for the taxpayer could be significant,” he said.
“Assuming full estimated take-up, the total potential expenditure of the above arrangements in 2012 is estimated to be in the region of €350 million. There is no reason why savings of between €50 million and €70 million cannot be realised.” The current annual spending level is between €400 million and €420 million.
Although it will take time to implement, getting the mandate in place is seen as a crucial first step.
Mr Hayes acknowledged there was “a concern that some small firms may be squeezed out of the public procurement market by centralised frameworks”.
But he added: “I am actively working with the small and medium enterprise sector to ensure that SMEs are better prepared to bid for public service contracts and barriers to their tendering are being identified and addressed.” He said: “If it is the case that these public service bodies are obtaining significantly better value elsewhere, then I want to know about it. But if it is a case that they merely wish to retain control over purchasing, this is simply unacceptable and needs to change.”
