1. It’s Time for Procurement
Chris Newman
Director ArcBlue Consulting

2. Our public sector experience
QLD State Government
Contract Management Assessment and training program
Social Procurement Development
VIC State Government
Training Programs
Review and Certification Programs
VIC Local Government
LEAP Spend Analysis and Procurement Development
Contract Management Guidelines and Development
Training
Social Procurement Programs
NZ Government
Agency assessment
Spend Analysis
NSW State Government
Accreditation process with 7 Departments
Procurement Project delivery
Capability Model Development
State Government
Local Government
SA Local Government
Roadmap Program
Regional Opportunity Analysis Programs
Procurement Capability Assessment / Development
Federal Government
Contract Management Training
Queensland Local Government
Local Buy Training
Spend Analysis Pilot
Gold Coast Contract Management Training and Capability Development
WA Local Government
Procurement and Contract Management training
Procurement Handbook Development
SA State Government
Savings Programs
New Royal Adelaide Hospital Procurment
NSW Local Government
Procurement Development Program across 30+ councils
Procurement Leadership Program
Regional Development Programs
Social Procurement Guidelines

3. Implications of rate-capping
Contents
Implications of rate-capping
Why procurement - what is the data telling us?
How can strategic procurement be part of the solution?

4. Implications of rate-capping
A burning platform for the next stage of professionalisation or
A handbrake on sector capacity and development
Opportunities for innovation
What does it mean for regional and sector collaboration

5. Operating in a commercial world
Delivering and Demonstrating savings, value and productivity improvements
Data-based decision-making
Taking a structured approach
Building the right skills and capacity
Balancing commercial and community

6. Procurement Trends and Insights
MAV LEAP Program
Procurement Trends and Insights

7. LEAP Background
A continuous improvement program designed to assist councils, regions and the sector to:
Achieve sustainable savings and value for money
Support local and regional economic development Identify and pursue shared services opportunities
Improve probity management and compliance
Improve organisational and sector capability
23 councils currently participating in LEAP
Data insights are based on first 15 councils

8. LEAP Program Statistics
$1,300 million
spent across 15 metropolitan councils in FY15
45 – 65%
of total council spend
>24,600
Active suppliers in single year
~467,000
Individual transactions (invoices) processed

9. 17% - 37% 40% - 60% ~$52,000 quarter 4 Spend
of spend in the local (Council) area.
40% - 60%
of Councils spend is with top 20 suppliers
~$52,000
average spend per supplier, predominantly below tender threshold
quarter 4
opex and capex spend spikes in key categories suggesting rushed end of budget cycle spend.

10. Efficiency 350,000 75% 28% $2,875 $25 million Up to $73
Per transaction cost of traditional PO process
350,000 75%
of transactions <$1,000 value
28%
of all suppliers were used only once during the financial year, ~7,000 single use suppliers
$2,875
average value per transaction
$25 million
spent processing transactions with value of <$1,000

11. Low-value Procurement White Paper

12. Low-value Procurement White Paper

13. Capability and Maturity

14. Procurement in Local Government
State
Regional
Local

15. Case Study: Barossa Regional Procurement Development Program Objectives & Process
Make sustainable savings & create efficiencies
Stimulate economic development
Improve probity and reduce risk
Build staff and organisational capability in procurement
Strengthen regional collaboration
Joint Council Kick-off
Data Collection
Individual Council Workshops
Detailed Joint Spend Analysis
Opportunity Analysis Workshop
Regional Roadmap Develop-ment and Validation
Final Roadmap Workshop
Progress Reviews and Support

16. Barossa Regional Procurement Program
Regional Collaborative Procurement Program – Start May 2014
Regional Governance MOU in place – October 2014
Regional Resource engaged – February 2015
Collaborative Projects
Standardisation of process and documents
Development of regional procurement website
Agreed priority regional contracts delivered since February:
Regional Building Maintenance/ Trade Services Panel
Audit Services
Road Re-Seal Program
Stationery
Line Marking
Savings to date $800,000 – Target $2.5m/ year (5%)
Increased regional spend and internal efficiencies

18. Barossa Region – Next Steps
Expanding model to shared services investigations
Correlating spend data against service, output and demographic data
Using opportunity analysis to structure and prioritise opportunities
South gippy 56 East gippy 80 Wellington 78 Bass 70 Latrobe 115 Baw 61
460

19. Strategic Procurement
Procurement represents our most tangible area to deliver and demonstrate savings:
External and internal efficiencies
Continuing to move from administrative to strategic
Structured programs
Targets and measurement
Commercial focus
Building capability – council, region, sector
Demonstrating ‘value’ while maintaining our commitment to community