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Government Procurement Reform Seize the opportunities.

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Presentation on theme: "Government Procurement Reform Seize the opportunities."— Presentation transcript:

1 Government Procurement Reform Seize the opportunities

2 Agenda Introduction Reform Themes Cost Savings Workstream Year One Success Factors Key activities to date Governance All of Government Contracts Office Consumables, Passenger Vehicles, Desktops & Laptops/Notebooks and Single & Multi-function Print Devices e-Market Place / e-Tools Questions

3 Four themes Cost savings Build capability and capacity of procurers Enhanced NZ business participation Improved governance, oversight & accountability

4 Cost Savings Workstream: Year One All of Government Contracts (x4) Savings Methodology Spend Analysis All of Government Supply Agreement and MOU e-Marketplace / e-Tools

5 Cost Savings Workstream: Success Factors Calculable cost savings that are measurable Contract strategy and approach that: delivers government business needs meets the government procurement policy exercises a deterministic influence in the supply market

6 Acceptable quality standards, fit for purpose Risks mitigated and managed appropriately Supplier relationships appropriately managed Effective measures of success (cost saving, quality service, sustainability) Transparency Cost Savings Workstream: Success Factors (continued)

7 Cost Savings Workstream: Key activities to date Establishment of Centres of Expertise Data gathering and validation Governance mechanisms established Stakeholder engagement Market analysis Tender documentation Establishment of AoG Supply Agreement and MoU Probity Assurance

8 Cost Savings Workstream: Governance Ministerial Oversight Chief Executives GPDG Reform Programme Executive Cost Savings Technical Advisory Group Client Advisory Groups

9 Office Consumables Procurement Strategy

10 Discussion Points Overview: New Zealand office consumables market Current Government procurement of office consumables What is the scope of the contract(s)? Where are the opportunities? What will this mean for you?

11 Overview: New Zealand office consumables market New Zealand stationery market is approx. $1.2b p.a. The market consists of: Manufacturer/suppliers - e.g. Croxley Import suppliers - e.g. HP, Croxley Wholesalers - e.g. Spicers Office Paper Value Added Resellers - e.g. OfficeMax, Corporate Express Retailers – e.g. Warehouse Stationery, Paper Plus, Supermarkets

12 Current Government procurement of office consumables Government spend is approx. $50m p.a. via a variety of mechanisms: Contracted integrated solutions with OfficeMax and Corporate Express Purchasing via the GSB aggregated solution Non-contracted arrangements Ad hoc/retail purchasing

13 What is the scope of the AoG contract(s)? Government Catalogue consisting of: Printer ink and toner cartridges Photocopier paper General stationery items Canteen products Computer accessories Health and hygiene IT media storage Out of Scope: Furniture Business machines Print solutions

14 What is the scope of the contract/s? (continued) Services to be provided: Sourcing of required product Mapping of supplier catalogue items to Government e-marketplace catalogue Catalogue content management Invoicing services Comprehensive reporting

15 What is the scope of the contract/s? (continued) Call centre support Product rationalisation Logistics, warehousing and distribution Packaging retrieval and recycling Amelioration of environmental impacts

16 Where are the opportunities? Lower prices through aggregation, increased competition, increased automation Rationalised Government catalogue Standardised processes and products across Government Targeted reporting: comparing spend & practices of like agencies Reduced demand Reduced administrative burden for agencies

17 What will this mean for you? Lower cost, less effort, accurate reporting: Reduced tendering effort E-Marketplace one-stop-shop Reduced administrative & contract management effort Increased automation: greater efficiencies and accuracy Accurate reporting on spend and practices Reduced cost

18 Timings RFP issue date, clarification period begins 16 March Supplier briefing: Auckland19 March Clarification period ends5 April RFP closing dateNoon 12 April Evaluation & negotiation13 April to 31 May Award/execution of Supply Agreement by 30 June

19 Passenger Vehicles Procurement Strategy

20 Overview: New Zealand motor vehicle market What is the scope of the contract(s)? What does the government purchase? Where are the opportunities? What will this mean for you? Discussion Points

21 Overview: New Zealand motor vehicle market 70,048 new vehicle sales in 2009, down 28% 2010 tipped for the start of recovery Approx 300 individual makes/models retailing under $50,000 Focus: improve safety and environmental performance Motive power options: petrol, diesel, hybrid, LPG Most new passenger vehicles fitted with ESC (80%) and SCA (74%) Technology driving price increases

22 What is the scope of the contract(s)? Passenger and Light Commercial Vehicles Accessories Through life costs Distributor buy back

23 What does the government purchase? 6.2% of passenger vehicle market (3,372) 6.8% of light commercial vehicle market (1,059) 100+ different individual makes and models 70% purchase, 30% lease Most purchase new, but some agencies purchase used Lots of different drivers influencing selection process

24 Where are the opportunities? Aggregation of makes and models Focus on the through life costs Forward planning Supplier performance management

25 What will this mean for you? More buying power - less effort: Together, were a more attractive customer Strong distributor relationship & supplier management Reduced tendering effort E-Marketplace one-stop-shop

26 What will this mean for you? (continued) Choice: A selection of vehicles Pick and choose service options Pick and choose accessories Mechanism to address genuine out-of-scope requirements

27 Timings RFP issue date, clarification period begins 16 March Supplier briefing: Auckland24 March Clarification period ends12 April RFP closing date20 April Evaluation & negotiation21 April to 27 May Award/execution of Supply Agreement by 30 June

28 Laptops/Notebooks & Desktop P.Cs Print: Multi & Single - Function Devices

29 Overview: New Zealand IT Equipment market What is the scope of the contract(s)? Where are the opportunities? What will this mean for you? Discussion Points

30 Overview: New Zealand desktop & laptop market NZ dominated by a handful of Desktop and laptop providers: HP, Lenovo, Dell, Acer, Toshiba (laptop space only) and Apple Routes to market via resellers and integrators: Gen-I, Datacom, The Laptop Company Small presence of New Zealand based assemblers: Cyclone, Silicon, Advantage

31 Scope: Desktops & Laptops A Multi-Supplier Panel Agreement Four Core Lots Desktops Laptops/Notebooks Tablet Notebooks Associated Services (mandatory for all those that bid on Lot 1,2 and/or 3) – not available as a separate lot.

32 What does the Government purchase? Approximately $45 Million P/A In Desktops (next four years) budgeted across all Sectors. Approximately $15 Million P/A (next four years) in Laptops budgeted across all sectors.

33 Where are the opportunities? An opportunity to leverage against a standardised commodity. Currently some great deals in the marketplace. A chance to better and make them visible to AoG. A chance to share best practise and collaborate. Common performance management. A chance to share supplier experience

34 Overview: New Zealand Single & Multi-Function Print Device Market Dominated by four core manufacturers HP, Konica Minolta, Ricoh and Fuji Xerox bubbling up suppliers such as Oki, Kyocera and Sharp. Most deals direct with these companies A movement to more mature print management Smaller NZ players in the single function print support business

35 Scope: Single & Multi-Function Print Devices A Multi-Supplier Panel Agreement Four Core Lots Single Function Devices Multi-Function Devices Optional Services that the respondent must be able to provide: Optional Services that the respondent may be able to provide. Associated Services (mandatory for all those that bid on Lot 1 and 2) – not available as a separate lot.

36 Approximately $30 Million P/A on MFDs Estimates on single function devices still currently being evaluated. What does the Government purchase?

37 Where are the opportunities? A chance to leverage AoG print volume. Establish greater transparency and common costs. A chance to compare and contrast deals. A chance to share best practise and collaborate. Common performance management. A chance to share supplier experience.

38 What will this mean for you? A single set of Terms & Conditions Less laborious tender procedures. Access to a transparent market. Access to a more consistent approach to transacting (the E-Marketplace). More focussed and singular contract management

39 Timings RFP issue date, clarification period begins 8 March Supplier briefings: Wellington10 & 11 March Clarification period ends3.00 pm 25 March RFP closing dateNoon 31 March Evaluation & negotiation1 April to 31 May Award/execution of Supply Agreement by 30 June

40 e-Marketplace: Online Catalogue & Purchasing

41 Discussion Points Objectives What is the current situation? What we are implementing? What are the opportunities? What will this mean for you?

42 Objectives Provide an enabling platform Improve productivity Create efficient P2P processes for AoG Contracts Enable focus on value added activities Realise potential savings Reduced costs Reduced rogue buying Leverage collaborative buying opportunities

43 What is the current situation? Varying approaches – difficult for suppliers Mandraulic systems General lack of coherent spend analysis and transparency: By individual agencies All of government spend Divide and conquer tactics by supply market Supplier entrenchment

44 What we are implementing? Online electronic marketplace for AoG contracts Standardised buying portal Single trading post for buyers and sellers Platform independent solution Capacity to transition existing arrangements

45 What we are implementing? (continued)

46 Advantages Standard product ranges Standard processes Purchasing control / visibility Reporting: agency, overall spend analysis, benchmarking

47 Where are the opportunities? Flexible integration solutions Analysis of buying patterns Benchmarking comparisons Collaborative buying Level the playing field Broader benefits realisation

48 What will this mean for you? Reduced procurement effort E-Marketplace one-stop-shop Solution flexibility Re-energise existing relationships Improved access to purchasing information Opportunity to focus on core activities

49 Questions

50 Conclusion Success will mean: Delivery of calculable, measurable cost savings – while: Meeting government business needs Making it easier for suppliers to do business with government Meeting government procurement policy Exercising a deterministic influence in the supply market

51 Contacts: John Ivil Tel: OR


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